The following data were taken from the 1997 and 1998 financial statements of Amazon.com. (All dollars in thousands.)

Instructions Perform each of the following:

(a) Calculate the debt to assets ratio for each year.

(b) Calculate the cash debt coverage ratio for each year. (Total liabilities at year-end 1996 were $4,870,000.)

(c) Discuss Amazon.com’s solvency in 1998 versus 1997.

(d) Discuss Amazon.com’s ability to finance its investment activities with cash provided by operating activities, and how any deficiency would be met.

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1998 1997 Current assets $424,254 $137,709 Total assets 648,460 149,844 Current liabilities 161,575 44,551 Total liabilities 509,715 121,253 Total stockholders' equity 138,745 28,591 Cash provided by operating activities 31,035 687 Cash used in investing activities 261,777 125,677