Analyze and compare Amazon.com to Netflix Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Netflix, Inc. (NFLX) provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other products online. The cash, temporary investments, operating expenses, and depreciation expense from recent financial statements were reported as follows for both companies (in millions): Balance sheet, end of year: Cash Short-term investments Income statement: Days' Cash on Hand Amazon Netflix Operating expenses Depreciation expense a. Determine the days' cash on hand for Amazon and Netflix. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place. $36,092 $5,018 18,929 265,981 17,552 21,789 9,320 1 Amazon 82.2 ✔ days Netflix 222.5 X days b. With regard to the cash on hand which of these statements is correct? 1. Netflix appears to have greater cash liquidity to support its operations. 2. Amazon appears to have greater cash liquidity to support its operations. 3. There is no significant difference in the days' cash on hand between the two companies. 4. Greater cash liquidity means the business is highly profitable.
Analyze and compare Amazon.com to Netflix Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Netflix, Inc. (NFLX) provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other products online. The cash, temporary investments, operating expenses, and depreciation expense from recent financial statements were reported as follows for both companies (in millions): Balance sheet, end of year: Cash Short-term investments Income statement: Days' Cash on Hand Amazon Netflix Operating expenses Depreciation expense a. Determine the days' cash on hand for Amazon and Netflix. Assume a 365-day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place. $36,092 $5,018 18,929 265,981 17,552 21,789 9,320 1 Amazon 82.2 ✔ days Netflix 222.5 X days b. With regard to the cash on hand which of these statements is correct? 1. Netflix appears to have greater cash liquidity to support its operations. 2. Amazon appears to have greater cash liquidity to support its operations. 3. There is no significant difference in the days' cash on hand between the two companies. 4. Greater cash liquidity means the business is highly profitable.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Analyze and compare Amazon.com to Netflix
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Netflix, Inc. (NFLX) provides
digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital
services; however, Amazon also sells many other products online. The cash, temporary investments, operating
expenses, and depreciation expense from recent financial statements were reported as follows for both companies
(in millions):
Balance sheet, end of year:
Cash
Short-term investments
Income statement:
Days' Cash on Hand
Amazon Netflix
Operating expenses
Depreciation expense
a. Determine the days' cash on hand for Amazon and Netflix. Assume a 365-day year. If required, round all
computations to one decimal place and use in subsequent calculations. Round final answers to one
decimal place.
$36,092 $5,018
18,929
1
265,981 17,552
21,789 9,320
Amazon
82.2
Netflix
days 222.5
X days
b. With regard to the cash on hand which of these statements is correct?
1. Netflix appears to have greater cash liquidity to support its operations.
2. Amazon appears to have greater cash liquidity to support its operations.
3. There is no significant difference in the days' cash on hand between the two companies.
4. Greater cash liquidity means the business is highly profitable.
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