Amazon.com, Inc. is the world's leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the world's leading Internet 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 for Amazon and Netflix for a recent year a follows: Amazon Netflix Sales $88,988 $5,505 Average book value of fixed assets 13,958 142 a. Compute the fixed asset turnover ratio for each company. (Round to one decimal place.) Amazon Netflix b. Which company is more efficient in generating sales from fixed assets? c. How would you explain the difference in the fixed assets turnover of both the companies?

Amazon.com, Inc. is the world's leading Internet retailer of merchandise and media. Amazon also designs and sells electronic products, such as e-readers. Netflix, Inc. is the world's leading Internet 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 for Amazon and Netflix for a recent year a follows: Amazon Netflix Sales $88,988 $5,505 Average book value of fixed assets 13,958 142 a. Compute the fixed asset turnover ratio for each company. (Round to one decimal place.) Amazon Netflix b. Which company is more efficient in generating sales from fixed assets? c. How would you explain the difference in the fixed assets turnover of both the companies?

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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