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.

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Asked Dec 17, 2019
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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 as follows:
Netflix
Amazon
Sales
$107,006
$6,780
Average book value of fixed assets
19,403
162
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?
Interpret your results.
C.
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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 as follows: Netflix Amazon Sales $107,006 $6,780 Average book value of fixed assets 19,403 162 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? Interpret your results. C.

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Expert Answer

Step 1

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

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Sales Average Fixed Assets Fixed Assets Turnover $107,006 $19,403 5.5 times

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Step 2

Calculate the fixed asset turnover ratio for company N:

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Sales Average Fixed Assets Fixed Assets Turnover $6,780 $162 - 41.9 times

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Step 3

b. Company N is more efficient in gene...

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