Amazon.com, Inc. is the world's leading Internet retailer of merchandise and media. Amazonalso designs and sells electronic products, such as e-readers. Netflix, Inc. is the world's leadingInternet television network. Both companies compete in the digital media and streaming space.However, Netflix is more narrowly focused in the digital streaming business than is Amazon.Sales and average book value of fixed assets information (in millions) are provided forAmazon and Netflix for a recent year as follows:NetflixAmazonSales$107,006$6,780Average book value of fixed assets19,403162a. Compute the fixed asset turnover ratio for each company. Round to one decimal place.b. Which company is more efficient in generating sales from fixed assets?Interpret your results.C.

a. Calculate the fixed asset turnover ratio for company A:

Answered: Amazon.com, Inc. is the world's leading…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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[The following information applies to the questions displayed below.] Mears and Company has been operating for five years as an electronics component manufacturer specializing in cellular phone components. During this period, it has experienced rapid growth in sales revenue and in inventory. Mr. Mears and his associates have hired you as Mears's first corporate controller. You have put into place new purchasing and manufacturing procedures that are expected to reduce inventories by approximately one-third by year-end. You have gathered the following data related to the changes: Inventory (dollars in thousands) Beginning of Year $585,700 End of Year (projected) $392,310 Current Year Cost of goods sold P7-7 Part 1 (projected) $7,018,984 Required: 1. Compute the inventory turnover ratio based on two different assumptions: Note: Round your answers to 1 decimal place. a. Those presented in the above table (a decrease in the balance in inventory). b. No change from the beginning-of-the-year…
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