![Financial & Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337119207/9781337119207_largeCoverImage.gif)
Continuing Company Analysis-Amazon: Asset turnover ratio
Amazon.com, Inc. is one of the largest Internet retailers in the world. Netflix, Inc. 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 through the Internet. The sales and total assets (in millions) from recent financial statements were reported as follows for both companies:
Amazon | Netflix | |
Total revenues (sales) | $88,988 | $5,505 |
Total assets: | ||
Beginning of year | 40,159 | 5,413 |
End of year | 54,505 | 7,057 |
A. Based on your knowledge of each company, identify three major assets used by each company in generating revenue.
B. Compute the asset turnover ratio for each company. (Round to two decimal places).
C. Which company generates sales from total assets more efficiently?
![Check Mark](/static/check-mark.png)
Want to see the full answer?
Check out a sample textbook solution![Blurred answer](/static/blurred-answer.jpg)
Chapter 5 Solutions
Financial & Managerial Accounting
Additional Business Textbook Solutions
Fundamentals of Financial Accounting
Introduction To Managerial Accounting
Financial Accounting: Information for Decisions
Accounting for Governmental & Nonprofit Entities
INTERMEDIATE ACCOUNTING
Auditing and Assurance Services (16th Edition)
- Balance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 1.3Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20%Total liabilities-to-assets ratio: 45%Quick ratio: 0.90Days' sales outstanding (based on 365-day year): 36.5 daysInventory turnover ratio: 3.50 Do not round intermediate calculations. Round your answers to the nearest whole dollar. Partial Income Statement Information Sales? Cost of goods sold? Balance Sheetarrow_forwardBalance Sheet Analysis Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data: Total assets turnover: 1.8Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20%Total liabilities-to-assets ratio: 35%Quick ratio: 0.90Days' sales outstanding (based on 365-day year): 36.5 daysInventory turnover ratio: 3.25 Do not round intermediate calculations. Round your answers to the nearest whole dollar.arrow_forwardActivity Ratios Provide brief definition of what Activity ratios mean to the profitability of a company. What are the differences between Apple and Samsung in relationship to the ratios? See attached for ratios Total Asset Turnover Inventory Turnover Fixed Asset turnover Receivable Turnover 3. What does it mean to the company’s profitability? Is it good or bad?arrow_forward
- Vertical analysis Amazon.com, Inc.is the largest Internet retailer in the United States. Amazon's income statements through income from operations for two recent years are as follows (in mH!ions): Amazon.com,Inc. Operating Income Statements For the Years Ended December 31 (in millions) Year 2 Year 1 Product sales $70,080 $60,903 Service sales 18,908 13,549 Total sales $88,988 $74,452 Cost of sales $62,752 $54,181 Fulfillment 10,766 8,585 Marketing 4,332 3,133 Technology and content 9,275 6,565 General and administrative 1,552 1,129 Other operating expense (income), net 133 114 Total operating expenses $88,810 $73,707 Income from operations $ 178 $ 745 1.Prepare a vertical analysis of the two operating income statements.Round percentages to one decimal pl 2.Use the vertical analysis to explain the decrease in income from operations.arrow_forwardComparative figures for Apple and Google follow. Apple One Year Current Year Prior $338,516 $ 365,725 260,174 265,595 $ millions Total assets Net sales Complete this question by entering your answers in the tabs below. Apple Google Required: 1. Compute total asset turnover for the most recent two years for Apple and Google using the data shown. 2. In the current year, which company is more efficient in generating net sales given total assets? 3. Does asset turnover underperform or outperform the 0.5 industry asset turnover for (a) Apple and (b) Google? Total Asset Turnover Two Years Prior $375,319 229, 234 Current Year Required 1 Required 2 Required 3 Compute total asset turnover for the most recent two years for Apple and Google using the data shown. Note: Round your answers to 2 decimal places. 0.61 times times Current Year $ 275,909 161,857 One Year Prior times times Required 1 Google One Year Prior $ 232,792 136,819 Two Years Prior $ 197,295 110,855 Required 2 >arrow_forwardUse the information below to answer the questions below. Luther Corporation Consolidated Income Statement Year ended December 31 (in $ millions) 2015 2014 Total sales 610.1 578.3 Cost of sales (500.2) (481.9) Gross profit 109.9 96.4 Selling, general, and administrative expenses (40.5) (39.0) Research and development (24.6) (22.8) Depreciation and amortization (3.6) (3.3) Operating income 41.2 31.3 Other income --- --- Earnings before interest and taxes (EBIT) 41.2 31.3 Interest income (expense) (25.1) (15.8) Pretax income 16.1 15.5 Taxes (5.5) (5.3) Net income 10.6 10.2 Price per share $16 $15 Shares outstanding (millions) 10.2 8.0 Stock options outstanding (millions) 0.3 0.2 Shareholders' Equity 126.6 63.6 Total Liabilities…arrow_forward
- Excel Online Structured Activity: TIE ratio MPI Incorporated has $6 billion in assets, and its tax rate is 35%. Its basic earning power (BEP) ratio is 10%, and its return on assets (ROA) is 4%. The data has been collected in the Microsoft Excel Online file below. Open the spreadsheet and perform the required analysis to answer the question below. X Open spreadsheet What is MPI's times-interest-earned (TIE) ratio? Round your answer to two decimal places. Xarrow_forwardA condensed income statement for Northeast Airlines and a partially completed vertical analysis are presented below. ts Required: 1. Complete the vertical analysis by computing each missing line item as a percentage of sales revenues. (Round your answers to the nearest whole percent.) еВook Print NORTHEAST AIRLINES Income Statement (summarized) For the Year Ended December 31 eferences (in millions of U.S. dollars) 2016 2015 Sales Revenues $ 20,925 100 $ 20,320 100 % Salaries and Wages Expense 6,823 33 6,408 Fuel, Oil, Repairs, and Maintenance 4,717 4,646 Other Operating Expenses 5,200 4,725 23 Other Expenses (Revenues) 238 1 652 Income before Income Tax Expense 3,947 19 3,889 19 Income Tax Expense Net Income 1,370 7 1,361 7 $ 2,577 % $ 2,528 % 中arrow_forwardAnalyze and compare Amazon.com, Best Buy, and Walmart The condensed income statements through operating income for Amazon.com, Inc. (AMZN), Best Buy Co., Inc. (BBY), and Walmart Inc. (WMT) for a recent fiscal year follow (in millions): Line Item Description Amazon Best Buy Walmart Sales $280,522 $43,638 $523,964 Cost of sales (165,536) (33,590) (394,605) Gross profit $114,986 $10,048 $129,359 Selling, general, and administrative expenses (100,244) (7,998) (108,791) Operating expenses (201) (41) 0 Operating income $14,541 $2,009 $20,568 Question Content Area 1. Prepare comparative common-sized income statements for each company. Round percentages to one decimal place. If percentages is zero, enter "0". For those boxes in which you must enter subtractive or negative numbers use a minus sign. (Example: -300) Comparative Income statements Line Item Description Amazon Best Buy Walmart Sales Sales% Sales% Sales% Cost of sales Cost of sales% Cost of…arrow_forward
- Analyze and compare CSX, Union Pacific, and YRC Worldwide CSX Corporation (CSX) and Union Pacific Corporation (UNP) are major railroads, operating primarily in the eastern and western portion of the United States, respectively. YRC Worldwide Inc. (YRCW) is one of the largest trucking companies in the United States. The sales and total assets (in millions) for a recent year for each company are as follows: a. Compute the asset turnover ratio for each company. Round to two decimal places. b. Which of the two railroad companies is more efficient in generating revenues from its assets? c. How does YRCs asset turnover ratio compare to the two railroads? Why?arrow_forwardCompare Amazon.com to Netflix Amazon.com, Inc. (AMZN) is the worlds leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. (NFLX) is one of the worlds leading Internet television networks. 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 for Amazon and Netflix for a recent year as follows: a. 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? c. Interpret your results.arrow_forwardCommon-Sized Income Statement Revenue and expense data for the current calendar year for Sorenson Electronics Company and for the electronics industry are as follows. Sorenson Electronics Company data are expressed in dollars. The electronics industry averages are expressed in percentages. SorensonElectronicsCompany ElectronicsIndustryAverage Sales $1,940,000 100 % Cost of goods sold (1,358,000) (76) Gross profit $582,000 24 % Selling expenses $(329,800) (9) % Administrative expenses (116,400) (9) Total operating expenses $(446,200) (18) % Operating income $135,800 6 % Other revenue and expense: Other revenue 38,800 4 Other expense (19,400) (3) Income before income tax $155,200 7 % Income tax expense (58,200) (5) Net income $97,000 2 % a. Prepare a common-sized income statement comparing the results of operations for Sorenson Electronics Company with the industry average. If…arrow_forward
- Financial AccountingAccountingISBN:9781337272124Author:Carl Warren, James M. Reeve, Jonathan DuchacPublisher:Cengage LearningFinancial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337272124/9781337272124_smallCoverImage.gif)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337902663/9781337902663_smallCoverImage.jpg)
![Text book image](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)