Financial Performance Analysis of Amazon

Financial Performance Analysis of Amazon Executive Summary Amazon.com, Inc (Amazon) registered strong growth of 36% in 2008 mainly due to increased unit sales and expanded sales base in several categories. Meanwhile during the 3rd quarter of 2009, Amazon managed to report a steady growth despite the recession period. This report reviews and analyse Amazon financial performance as well as comparison with its competitors. All analysis and ratios are derived from data collected from respective companies annual reports and www.reuters.com. Brief Description of the Company Amazon is one of the leading online retailers in the world based in Seattle, Washington, United States of America. The company started its operation in 1995 and has regional involvement in the Asia Pacific, North America and Western Europe. Initially the core business of the company is selling online books however has diversified to products such as apparel, electronic and home improvement products. The company is involved in the internet retailing industry with 7.5% market share in 2008. The e-commerce industry has gone through major phases of growth and decline however, Amazon persevered and surprised everyone. Amazon achieved its first annual profit in 2003 and has continuously performed better each year. Amazons main competitors are the book retailer, Barnes and Nobles (BN) and third party retailing non-book related good, Ebay.com (Ebay). BN and Ebay are engaged in the similar industry as Amazon, which is online business and catalogue retailing of single and diversified product lines In terms of market capitalisation, Amazon has the highest at $59.57 billion and followed by Ebay and BN at $30.59 billion and $1.21 billion respectively. This indicates that Amazon has greater stability and low risk compared to the competitors. Financial Analysis Profitability The companys performance has improved wherein it has performed above the projections made throughout the four years period. Net sales have increased by 29.2% from $14,835 million in 2007 to $19,166 million in 2008 with net income of $476 million and $645 million respectively. The Cost of Sales (COS) has increased throughout the years partly contributed from the free shipping cost and has affected the net income figure. There was a drop in the net income in 2006 due to increase spending on technology and content and in income tax expenses. However, the said figure has increased thereafter. In terms of sales, Amazon has performed double from the competitors throughout the four-year period. Sales increased tremendously primarily due to low prices, vast selection of products and free shipping offers. However, in terms of Gross Profit Margin (GPM), Ebay operated at 74% has outperformed Amazon at 23% in 2008. The reason behind this is due to Amazons high expenditure on Cost of Sales (COS), which is about 70% of its sales value. The high COS was mainly contributed from the free shipping cost incurred. In comparison to Ebay, the company applies different business model from Amazon and have managed to minimise its expenditure on COS at about 20% of its sales value and therefore reflected to a high GPM. GPM proves that eBay is generating a very large percent of net income from each dollar of sales and this contributes greatly to the growing of eBays overall financial strength. Meanwhile, BN showed a better margin because of its smaller size and the retailer aspect. Amazon and BN have a stable Operating Profit Margin (OPM) of 4% compared to Ebay, which fluctuates within the same period. Its constant operating expenses of 20% from its sales value support the stable growth for Amazons OPM. Ebays fluctuation figures are resulted from high expenses incurred from selling, general and administrative. Based on the industry standard, Amazon and its competitors have performed ahead from the standard, which are 14.1% and 0.53% for GPM and OPM respectively. The low OPM standard can be ascribed to the effect of the recent financial crisis. As of the 3rd quarter of 2009, Amazons sales were $14,989 million with net income of $518 million. For the current year, it is projected a further increase of 21% and 19.5% in sales and COS respectively from 2008 primarily to the low prices, vast selection and free shipping offers. With the said sales projection, the net profit is projected at $743 million in 2009. The basis for the projection takes into consideration on the global economic downturn and changes in customer purchasing preferences. Based on the current quarter performance, the same trend was observed wherein Amazon is still having the highest net sales while Ebay still dominating the net income figure. BN was badly hit from the result of economic crisis. In comparison with the competitors, Amazons Return on Equity (ROE) was high in 2005 at 135% but drastically dropped throughout the years to 40% and 20% in 2007 and 2008 respectively. The main reason for the decrease was due to the yearly increase in the businesss equity. As at 2008, Amazons ROE is equivalent to the competitors and is expected to be in line with the competitors in the future. In comparison on the ROE and Return on Assets (ROA), Amazon has the highest growth among its competitors as it has a smaller capital base than Ebay and a higher profit level than BN. The high ROE is indicates that Amazon is continuing to grow. Meanwhile the ROA showed that Amazon is efficient in generating income from its assets compared to its competitors. The industry standard for the ROE and ROA are 3.8% and 1.6% respectively. The lower industry standard might be driven by the economic condition, which has a great impact to the performance and profitability of most companies. There was an increase of 1% for each year from 2006 to 2008 for the Return on Investment (ROI), whereas the Return on Capital Employed (ROCE) was at the highest in 2008 at 29%. These have indicated that Amazon is efficientat using its assets to generate earnings compared to the competitors. Liquidity and leverage analysis The companys current ratios are more or less similar to BN during the four-year period. The companys current ratio was between the ranges of 1.3 to 1.5 for the past four years. This indicates that Amazon is able to lay its hands on $1.30-$1.50 for every $1.00 they owe. In comparison between current and acid test ratio, acid test ratio is lower at average of 1.0 within the years. It will enable the company to cover its short-term liabilities adequately with its liquid assets. This is within some of the industry standards of 1:1, showing that the company will be able to cover its short-term liabilities adequately with its liquid assets. In comparison with the industry, Ebay performed better than Amazon for both the current ratio and acid test ratio. Amazon fell below the standard in the initial years but almost meeting the standard in 2008 at 1.5:1. Although not performing better than the industry average, Amazon has good and stable ratios, which indicates that the company is able to cover its current liabilities. Amazons gearing ratio was high in 2005 at 86% and subsequently reduces within the years to 13% in 2008. Due to the operational efficiency, increased sales and improved liquidity, Amazon was able to reduce its debt and currently the business is funded with internal generated funds. Meanwhile, Ebay has no borrowings and BN has an average of 30% for the gearing ratio. The high borrowing in 2005 has a huge impact on the debt-to-equity ratio, which was 6:0:1. However as the borrowings is paid, the debt equity ratio when down to 0.2:1 in 2008. This indicates that Amazon has 20 cent debt for every $1 equity the company have. As for BN, its debt/equity ratio was at average of 0.5:1 during the four years. Therefore, in comparison, Amazon is less risky than BN. As Ebay has no borrowing, the interest cover for the said company is high compared to Amazon and Ebay. In comparison with the debt-to-equity ratio set by the industry, Amazon has a very low ratio of 0.2 compared to 40.98. As mentioned earlier, the industry ratio is on the high side due to the economic condition. Investment analysis Amazons common shares outstanding plus shares underlying stock-based awards outstanding totalled 446 million on December 31, 2008, compared with 435 million a year ago. As of to date, the said shares amounted to 451 million. Based on Amazons Earning per Share (EPS) trend, it indicated that the markets willingness to pay for the companys earnings has increased. This indicates that the market foresees Amazons long-term prospects over and above its current position. As at 3rd quarter 2009, the EPS was $1.20 and to grow further based on the companys projection on higher earnings in 4th quarter. Analyst predicts that strong online holiday sales will boost the shares of retailers, including Amazon and has recommended that the said shares will outperform in the market (Reuters.com, 2009). In terms of market performance, Amazons share price fluctuates throughout the years and increased tremendously in 2007 at $92.64 due to the launch of its e-book reader, Kindle. However, during the economy downturn in 2008, the share price dropped to $51.28 due to low operating profit as Amazon begins its price reduction for the goods and services. In 2009, the share price gradually increased and after the 3rd quarter results, it continuously went up and as at 11 December 2009, the share price was $134.15. The current Price/Earning Ratio has increased to 80.70 times from 33.80 times in 2008. Analyst predicted that with a strong revenue growth Amazon would be able to gain significant market share from other competitors (Stahl, 2009). Due to the economic downturn, all companies are affected which was reflected in its performance. Similar to Amazon, Ebays and BNs share prices had an initial stable growth but in 2008 it dropped by about 50%. While others are still struggling to recover from the economic situation, Amazon has showed a growth in 2009 and the share price has currently increased by 168% compared to Ebay and BN at 70% and 62% respectively. Cash flow Analysis As at 3rd quarter 2009, the cash and cash equivalents was $2,514, which a reduction from the opening balances at the beginning of the year of $2,769. During the period, the cash used in financing activities was $229 million compared to $1,199 million in 2008 of which the cash outflows results from repurchases of common stock, repayments of long-term debt. Repayments on long-term debt and payments on capital lease obligations were $379 million for the 3rd quarter 2009 and $335 million in 2008. Meanwhile, free cash flowwas $446 million for the quarter. Throughout the years, Amazon has managed to have a positive cash flow from its operating activities. This indicates a good sign that the core operation of the company is generating income. In comparison of Amazons total liabilities to the cash flow generated from operations, the company has enough funds to cover level of investment and takes about 3.3 years to pay back all its financial commitments. With the current cash, cash equivalents, and marketable securities balances, the company is likely to be able to meet its anticipated operating cash needs for at least the next 12 months. In comparison between the cash flow from operating activities and net income, it indicated that Ebay has the higher ability compared to Amazon in managing its operating cash cycle through receivables, payables and inventory. The reason is that Ebay takes advantages of its payable days for as long as 361 days. Due to the similar business model, both companies have a negative cash cycle of which cash is generated from its payable and quick settlement payment from the customers. Management of Working Capital In terms of managing working capital, Amazon had maintained its positive cash flow being the highest at 2007 for an amount of $1,450. This indicates that the company is able to pay off its short-term liabilities and operating expenses accordingly. In comparison between the competitors, Ebay has the highest working capital of $4,023 million in 2007 while BN has the lowest at $841million in 2006. The high working capital for Ebay has enabled the company to be successful in its expansion programme and improve their operations. For the 3rd quarter ending 31st December, Amazons working capital is $1,832 million and is expected to increase further due to higher expectation of sales in the coming quarter. Working capital provides information on the companys underlying operational efficiency. In terms of efficiency, Amazon is efficient in using its assets in generating sales compared to its competitors, which are reflected in the asset turnover ratio. This indicates Amazons improved efficiency in inventory and asset management that is partly supported from the low pricing strategy and low profit margin. In comparison to the competitors, BN has the lowest account receivable days due to its retail business model, which is based on the cash transaction. Based on the account payable days, Ebay has taken advantage on the free source of finance for the business at 361 days compared to Amazon at 62 days. In respect of the inventory days, Amazon is able to turn the inventory quickly as low as 12 days compared to BN at 140 days. BN has high stock inventory days due to the reason of its retailing business model and product which requires some time to be sold. Due to the same business application, both Amazon and Ebay have a negative cash operating cycle, which indicates efficiency in cash management. In term of the industry standard, the three companies are performing above the indicative ratios, which are supported by the significant growth in the industry. Based on the industry standard, Amazon and the competitors are performing ahead from the standard. For the assets turnover ratio, Amazon was the highest at 2 times compared to 0.7 times industry standard. This indicates the companys efficiency at using its assets in generating sales. The reason Amazon performed better than the competitors is relatively derive from the pricing strategy wherein low profit margin company tends to have high asset turnover. Amazon Future Prospects Based on Amazons current performance, it is projected that the company will have a strong growth supported by the low pricing strategy and free shipping. Moreover, the latest acquisition of Zappos.com and improvised version of Kindle are expected to increase Amazon sales which leads to higher profitability. Due to the growth of Amazon, its annual earning is expected to grow over the next two to three years with sales reaching $2.38 million and $2.86 million respectively. Due to robust financial performance during the current economic condition, it has enhances investors confidence. Share prices are expected to increase with earnings of $2.57 and $2.38 per share in 2008 and 2009 respectively. In line with the said growth, Amazon will benefit in gaining additional market share despite tough competition from other online sites such as Ebay. References Amazon.com Annual Report 2008 Available from: http://amazon.com (accessed on 11th November 2009) Amazon.com 3rd Quarter 2009 Report Available from: http://amazon.com (accessed on 11th November 2009) Ebay.com Annual Report 2008 Available from: http://ebay.com (accessed on 11th December 2009) Barnes and Noble Annual Report 2008 Available from: barnesnobleinc.com ((accessed on 11th November 2009) BBC News (2008), Amazon Shares Fall Despite Growth. (Online) Available from: http://news.bbc.co.uk (accessed on 5th December 2009) George Stahl (2009), Amazon Shares Hit All Time High. The Wall Street Journal (0nline), Available from: http://online.wsj.com/article/SB125630854623203899.html (accessed on 4th December 2009) John Pacskowski (2009), Spare Change for Amazon Shares. The Wall Street Journal (Online), Available from: http://online.wsj.com/article/SB125630854623203899.html (accessed on 4th December 2009) Richard Waters and Jonathan Birchall (2009), Amazon Share Surge Recalls Tech Boom Days (Online) Available from:http://ft.com (accessed on 5th December 2009) Reuters.com (2009), Nasdaq rises with Online Retailers Dos Dips on Oil. (Online), http://ul.reuters.com (accessed on 3rd December 2009) www. reuters.com (accessed on 1st December 2009)

Hacking :: Essays Papers

Hacking Computer hackers in today's world are becoming more intelligent. They are realizing that people are constantly developing more hack-proof systems. This presents the hackers with a bigger challenge and a bigger thrill. The government is realizing this and is working on making harsher laws to, hopefully, scare the potential hackers. With the increase in hacking and hacker intelligence, governmental regulation of cyberspace hasn't abolished the fact that it's nearly impossible to bring a hacker to justice. Kevin Mitnick, a hacker who has yet to have a harsh punishment when caught, can somehow lower his punishment for his hacking crimes down to a couple months probation. When Kevin was seventeen, he was caught for breaking into a phone center in Los Angeles. He was tried and sentenced to three months stay in a juvenile detention center and a year probation. Kevin is a very intelligent man. He could use his computer skills in a good way by stopping other hackers. He didn't, so he faced the law many times. In all those times, he never spent more than a year in prison (Shimomura 1). Kevin was also a Phreak; a phone freak. He studied the phone system. He soon knew how to make free phone calls from payphones and how to crash a system. Kevin Mitnick has yet to be harshly punished for these crimes, which are very numerous (Shimomura 1). Another major player in the hacking industry is an unidentified man, identified by his pseudonym, or nick-name, Deth Vegetable. His group of hackers, Cult of the Dead Cow (cDc), is one of the oldest hacker organizations still in effect today. He is the leader and founder of (Cult of the Dead Cow). Cult of the Dead Cow is a leading group in the hacking industry; another leader that has fun with what they do. (Vegetable 1). They are a notorious group of hackers who have a couple problems; one of which is drugs. At a convention that the cDc holds for "some of the most notorious hackers from around the world" (Vegetable 1), one of the members of cDc said "Drugs and hacking go hand-in-hand" (qtd in Vegetable 3). Deth Vegetable said "Taking Drugs is like hacking your brain" (qtd in Vegetable 3). This is the way hackers are, they have fun in hacking, and the more they hack, the more fun they have. "If hacking is taking an electro-chemical computing device and altering it for your own enhancement, then taking XTC [, a type of drug,] is doing the same for your brain.

A Discussion of Symbols in “A Death of Salesman”

The seeds embody Willy's ambition to be both a good father and a â€Å"well-liked† salesman. Willy's nocturnal futile attempt to grow vegetables clearly demonstrates his failure in achieving the American Dream. Another perspective is to see seeds as the pure embodiment of Biff. Willy makes a hard attempt to raise and nurture Biff but despite all his desperate tries, Biff turns out to be a lazy bum. In the same way, Willy tries to grow vegetables but he fails. The other important fact about this symbol is that huge towering shapes behind Willy's house constrict the garden in which vegetables will grow. Because of the limiting space of the garden, nothing substantial can grow. This can be interpreted that the competition, the clemency lacking quality of the American Dream (represented by the towering buildings) ultimately leads to Willy's downfall (the futile seeds). This is a crucial point in understanding and evaluating the play because the American Dream that Willy thought as infallible, in the end proves to be fallible by leading Willy to his downfall. Linda's And Woman's Stockings Reference in the play: (To Willy) Biff: You – you gave her mama's stockings![His tears break through and he rises to go] Discussion: The stockings in this play, in my opinion, represent sexual infidelity. Willy is accused by Biff for giving her mother's stockings to a woman. The important factor here is that Willy could have given the Woman any stocking but vividly in order to empower the symbol, Arthur Miller makes sure that Willy gives the Woman Linda's stockings. It is important to note that right after the Woman in the flashback thanks Willy for the stockings (â€Å"Woman: And thanks for the stockings†), Willy notices that Linda is mending stockings and is nagged by this fact: â€Å"Willy [angrily taking them (stockings) away from her]: I won't have you mending stockings in this house! Now throw them out!† The stockings are absolutely reminiscent of Willy's betrayal. Of course, faced alone with this fact, Willy cannot stand it and therefore commands Linda to throw them out. This depicts Willy's ambivalent character. One Willy betrays Linda. The other Willy cannot stand this fact. Diamond: Reference in the play: Ben [With greater force]: One must go in to fetch a diamond out. Discussion: The diamonds embody the power of tangible wealth or money. In a sense, the diamonds are the solidification of American Dream. Willy invariably, has failed the American Dream and therefore doesn't posses the diamond. The diamonds that made Ben rich also remind Willy that he is a failure. Further qualities of the diamond are revealed by Ben's sentences: â€Å"Ben: A diamond is rough and hard to the touch.† I think what Ben wants to say is that the diamond isn't easy to get (represented by its roughness) but once possessed, it's a valuable asset. â€Å"Ben: It's dark there (jungle, Africa) but full of diamonds† From the wanton, debauched way that Ben wrestles and horses around with Biff (i. e. the way he trips him), it can be concluded that Ben isn't a moral personality. The result of this conclusion is that Ben wasn't very honest when obtaining the diamond. The darkness in this sentence represent the immoralities or the dishonesties one must go through before one can obtain the diamond. Willy's personality, on the other hand, lacks immorality. He has always â€Å"played it fair†, the only exception being his betrayal to Linda. Willy's chronic honesty in business causes him to fail and so he doesn't obtain the diamond. Whereas on the other hand, Ben succeeds. The Rubber Hose: Reference in the play: â€Å"Biff: All right, phony! Then let's lay it on the line. [He whips the rubber hose out of his pocket and puts it on the table] Discussion: The rubber hose is an object that Willy tries to inhale gas with. The significance of this object is that it reminds the audience of Willy's failing attempts to commit suicide. The rubber hose ,in a way the seeds do, represents Willy's failure. Willy tries to commit suicide but even fails that. However, unlike the seed which symbolized Willy's failure to achieve the American Dream, the rubber hose symbolizes Willy's failure to be harmony, in union with himself. Willy ultimately fails to commit suicide because he is ambivalent to the idea of suicide. The rubber hose symbolizes Willy's ambivalence and his failure to find himself, an observation that Willy accused Biff of. The Car and the Chevy: Reference in the play: Biff [rushing down the stairs]: Pop! [As the car speeds off, the music crashes down in a frenzy of sound] Reference to Chevy: Willy: I was thinking of that Chevy. Nine-teen twenty-eight†¦ when I had that red Chevy – [Breaks off.] The car is Willy's ambitions and feelings in life. In the past, he had a Chevy as a car, and Biff used to simonize it. Willy Loman as a young man had ambitions and thought that he was going to thrive and flourish. The Chevy symbolizes all together Willy's ambitions, hopes, dreams as a young man. However as Willy gets old, he suddenly realizes that he isn't the successful businessman he dreamt that he would be. This transformation of Willy's feelings about his life can be paralleled with the transformation of the Chevy into an old rusty car. When Willy suddenly can't take it anymore, he commits suicide with his car. This translates into saying when Willy can not stand the idea that he failed, his feelings (his car) lead him to suicide.

Obestity MOVE program

Obestity MOVE program AbstractThe MOVE! Program is offered to veterans who are overweight or obese and currently receiving health care from the Veteran's Administration. MOVE! Managing Overweight and Obese Veterans Everywhere. This is a national program designed to promote health and prevent disease. The program will give the patients the tools they need to lose weight, keep it off, and improve their health. Research studies report that overweight and obese individuals are at an increased risk for many serious health conditions including heart disease, diabetes, some cancers, obstructive sleep apnea, and gallbladder disease. MOVE! Provides guidance on nutrition and physical activity and allows the patient to set the pace through goal setting and a stepped level approach that is tailored to the needs of the individual patient. The VA healthcare team provides support and follow-up. MOVE! Allows patients the control they need to manage their weight by making them a partner with their healthcare team.An obese topless man on a motorcycle. Original cap...An estimated 70 to 74% of our US veterans are either overweight or obese. Obesity has been named the nation's leading cause of preventable death. The US Surgeon General issued a call to action to prevent and decrease overweight and obesity in 2001. Health problems related to obesity have a significant economic impact on the US health care system.MOVE! Weight Management ProgramThe MOVE! Program is a national weight management program designed by the VA National Center for Health Promotion and Disease Prevention (NCP), a part of the Office of Patient Care Services, to help veterans lose weight, keep it off and improve their health. The patients enrolled must be motivated and ready to take control over their health. The providers recommend this program for any patient with a BMI equal to or greater than 25. The patients will not be successful or committed to attend the...

The evils in the chrysalids

The evils in the chrysalids The Chrysalids Imagine living in a place where there seemed to be a sense of evil in the eyes of everyone, except David Strorm. This place was called Waknuk. Waknuk was a place where anything out of the 'norm' was wrong and sinful and could even end in a consequence as serious as death. Life was good for those who believed and practiced the Waknuk religion. For those whom were not believers in the Waknuk religion found life to be hard and unfair. Throughout David's life in Waknuk he was faced with many tools of evil such as prejudice, pride and deception. David painfully learned that that prejudice causes individuals to be isolated from each other, pride causes individuals to mistreat each other and finally that deception causes much hurt and distress among individuals. The first tool of evil that I found present in The Chrysalids was prejudice.David was faced for the first time in his life a tool of evil prejudice.David Stanley at Reykjavik

A New Computer System for Staples Essay Example | Topics and Well Written Essays - 2750 words

A New Computer System for Staples - Essay Example Also corresponding Technology Road Map for the project was presented. Staples, Inc. sells a wide range of office products, including supplies, technology, furniture, and business services. Headquartered outside of Boston, Staples operates approximately 1,695 office superstores and also serves its customers through mail order catalog, e-commerce and contract businesses. Staples, Inc. has a website available at www.staples.com. Each Staples superstore carries over 7,000 brand name products for businesses and home offices, including supplies, furniture, small business machines, computers and peripherals - all at Guaranteed Low Prices. (Staples, The Office Superstore, 2005) With the Big Three of office supplies, Staples, Office Depot, and Office Max, accounting for only 20 percent of the $285 billion market, Staples is focusing on two key areas for growth: small businesses and the Internet. The company hopes to offer small businesses such high tech services as videoconferencing, messaging, and Web-site design. The office giant already bought Quill Corporation, which specializes in direct sales, and telecommunications firm Claricom Holdings while it forged partnerships with Bell Atlantic, Nortel Networks, and CompuCom Systems. Staples also invested an additional $10 million into its new on-line site, which allows customers to purchase over 6,000 items over the Internet. Its rapidly expanding virtual office market is already worth billions of dollars; efforts to improve and refine the site are never-ending. Expansion-happy Staples has surged into 2000. It strengthened its Internet presence by allying with VarsityBooks.com, CloudSource, MarketTools, and TVisions Inc. In early-2000, the company announced that it would offer insurance online as well. Also in 2000, Staples formed strategic alliances with Manhattan Associates, Inc., a producer of management systems; with Plumtree Software, a corporate portal leader; and with Pre-Paid Legal Services, Inc., a national provider of legal service plans. (Staples, The Scoop, 2000) Staples' customers are various companies from home-based businesses to Fortune 500 companies in 21 countries throughout North and South America, Europe and Asia. There are a lot of complaints from Staples' customers that they cannot get the complete information about the goods, fees, discounts and rebates; and therefore they make wrong decisions about purchase. Nevertheless, corporate culture of Staples stated at its website says, "At Staples we strive to be a model of corporate governance and ethical business practices. We are committed to acting with integrity in everything we do and hold ourselves accountable for doing business honestly, ethically, and legally. At Staples, we have built a reputation for

The Battle of Yorktown Essay Example | Topics and Well Written Essays - 1750 words

The Battle of Yorktown - Essay Example At this point, as noted by Fuller, Cornwallis was waiting at Yorktown with 7,000 men. Lafayette, who was a French general, and part of the allies, was also at Yorktown with 5,000 men. Fuller states that, at this point, Cornwallis made the mistake of not attacking Lafayette and his 5,000 men, which would have been crucial for Cornwallis, as Washington and Rochambeau were on the move towards him at Yorktown, and defeating Lafayette before Washington and Rochambeau could get to him would have been beneficial to Cornwallis (363). The siege itself opened on September 30, 1781, according to Fuller. Puls gives a description of Yorktown itself during this time. Puls states that York town was a small village of about sixty houses, which sat on the south side of the York River, which flowed into the Chesapeake. Therefore, the American and the French armies set up below the town, and Cornwallis was pinned against the river. At this point, Puls states that Cornwallis made another potential mista ke, which is that he evacuated fortifications at Pigeon Quarter and three other redoubts, as he thought that he could escape by the sea (161). Urban states that there was a reason why Cornwallis would have given these up, and this was that he felt that these redoubts were too exposed to be defended. However, as Urban notes, this decision caused much consternation with the British, and gave hope to the French, who thought that giving these up gave them the best possible advantage (121). Urban states that the siege was getting underway, in earnest, on the morning of October 1, 1781. At this point, the French had their eye on the small fort on a cliff overlooking the York River, and they were also unloading their heavy guns and a landing point on the James River,... The Battle of Yorktown British ships ended up in flames, and Cornwallis was soon surrounded by trenches built by the French and American allies. This led to his eventual surrender. And, although it was not necessarily known at the time, this battle effectively ended the Revolutionary War. This is because, after Cornwallis’s unconditional surrender, there were only two posts that the British had – New York and Charleston, South Carolina. It was not long, only six months later that the British had agreed to American independence. Therefore, it is arguable that the Battle of Yorktown is the most important battle of the American Revolution, because it was the battle that literally decimated and demoralized the British forces. This paper will explain this battle, what happened during the battle, and will also explain, briefly, what happened after the battle, as the British agreed to give the Americans independence. Body The siege at Yorktown was the most important battle of the War for American In dependence, because it was the last battle, therefore was the decisive battle, and it led to the surrender of Cornwallis and his fleet, who were fortified at the base of the York River. Moten states the siege began with Washington marshalling his forces, which included both of his fleets, but also those of De Grasse, who was his French ally. While there were many battles during the American Revolutionary War, perhaps none were as important as the siege of Yorktown.