Analyze and compare Amazon.com to Best Buy

Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Best Buy, Co. Inc. (BBY) is a leading retailer of consumer electronics and media products in the United States. Amazon and Best Buy compete in similar markets; however, Best Buy sells through both traditional retail stores and the Internet, while Amazon sells only through the Internet. Current asset and current liability information from recent financial statements are as follows (in millions):

Line Item Description	Amazon	Best Buy
Current assets:
Cash	$31,750	$1,980
Short-term investments	9,500
Accounts receivable	16,677	1,015
Inventories	17,174	5,409
Other current assets	-	466
Total current assets	$75,101	$8,870
Current liabilities:
Accounts payable	$38,192	$5,257
Other current liabilities	30,199	2,256
Total current liabilities	$68,391	$7,513

a. Compute working capital for each company.

Amazon: Best Buy:

b. Compute the current ratio for each company. Round your answers to one decimal place. Amazon: Best Buy:

c. Compute the quick ratio for each company. Round your answers to one decimal place.

Amazon:

Best buy:

d. Can the working capital be usefully compared between the two companies?

e. Which company has the greater debt-paying ability according to the current ratio?

f. Which company has the greater short-term debt-paying ability according to the quick ratio?

g. Why are the results different between (e) and (f)? (Hint: Perform a vertical analysis of the current assets.) Round your answers to one decimal place. If an amount is zero, enter "0".

Line Item Description	Amazon	Best Buy
Current assets:
Cash	fill in the blank %	fill in the blank %
Short-term investments	fill in the blank %	fill in the blank %
Accounts receivable	fill in the blank %	fill in the blank %
Inventories	fill in the blank %	fill in the blank %
Other current assets	fill in the blank %	fill in the blank %
Total current assets	fill in the blank %	fill in the blank %

Amazon has fill in the % of its current assets consisting of cash and short-term investments, compared to fill in the blank % for Best Buy.

Amazons quick ratio relative to Best Buys. Best Buy has 61.0% of its current assets in inventory, while Amazon only has 22.9% of current assets in inventory.