Earlier quoted context omitted.
From the article: > 5 percent profit margin on Amazon’s own retail sales Last I checked, 5 percent margin is still making a profit, and definitely doesn't fit the definition of dumping nor predatory pricing. Part of the theory hinges on this: > However, Sussman asserts in his paper, “Amazon utilizes existing loopholes in Generally Accepted Accounting Principles (GAAP) disclosure regulations to exclude a significant p…
> The leases don’t show up as expenses in Amazon’s free cash flow calculations, even though the equipment is listed as an asset. Article aside, how does this work?
Let's say you mortgage something, take on $250k in debt. You now have $250k in assets. Net is zero. You don't take away the debt payments from your income, since you received something from taking on the debt, and it becomes a net positive over time.
It works similarly with operating leases. But the actual accounting is a tad more complicated, so here's a link: