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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)
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): 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 Required: 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". Current assets: Cash Short-term investments Accounts receivable Inventories Other current assets Amazon Best Buy % % % % % % % % % % % % Total current assets Amazon has Best Buy. This difference will improv % for % of its current assets consisting of cash and short-term investments, compared to Amazon's quick ratio relative to Best Buy's. Best Buy has 61.0% of its current assets in inventory, while Amazon only has 22.9% of current assets in inventory. This difference reflects Amazon's pure Internet strategy, which causes the current ratio to be smaller than Best Buy's. It also causes the relationship between the current and quick ratios to diverge between the two companies
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