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. Amscan
compete in streaming and digital services, however Amazon also sells many other products through the Internet. The sales and total assets (in millions)
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
6. Which of these assets are used by Netflix, Inc. to generate revenue?
a. DVD content library
b. Distribution centers
c. Streaming content library
d. Manufacturing plant
1. a and b
2. a and c
3. a and d
4. b and c
2
b. Compute the asset turnover ratio for each company. Round to two decimal places.
Amazon
Netflix
Asset turnover ratio
5.5
e. Which company generates sales from total assets more efficiently?