QuestionAnalyze and compare Amazon.com to Best Buy Buy sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Sales and accounts receivable information for both companies for a recent period follows (in millions):
Amazon Best Buy \begin{tabular}{lll} & \multicolumn{1}{c}{ Amazon Best Buy } \\ \hline Sales & $\$ 177,866$ & $\$ 42,879$ \\ Accounts receivable: & & \\ Beginning of year & 20,816 & 1,049 \\ End of year & 16,677 & 1,015 \end{tabular} a. Determine the accounts receivable turnover for each company. For interim computations, carry amounts out to one decimal place. Round your final answers to one decimal place.
Amazon Best Buy $\qquad$ Accounts Receivable Turnover b. Determine the days' sales in receivables for each company. Assume 365 days in a year. For interim computations, carry amounts out to one decimal place. Round your final answers to one decimal place.
Amazon Best Buy $\qquad$ Days' Sales in Receivables days days c. With regard to efficiency in collecting accounts receivable between the two companies which of the following statements is correct?
1. Best Buy is more efficient than Amazon in turning accounts receivable int cash.
2. Amazon is more efficient than Best buy in turning accounts receivable into cash.
3. Both Amazon and Best Buy are equally efficlent in turning accounts receivable into cash.
4. Both Amazon and Best Buy are equally inefficient in turning accounts receivable into cash.
2 d. What might explain the difference in the above ratios?
1. Difference in the type of customers served by the two companies.
2. Difference in the products sold by the two companies.
3. Difference in the purchasing policies of the two companies.
4. Difference in the management of funds. Previous Next