Analyze and compare Amazon.com to Netflix

Amazon.com, Inc. $($AMZN$)$ is one of the largest Internet retailers in the world. Netflix, Inc. $($NFLX$)$ provides digital streaming and DVD rentals in the United States. Amazon and Netflix compete in streaming and digital services; however, Amazon also sells many other products online. The cash, temporary investments, operating expenses, and depreciation expense from recent financial statements were reported as follows for both companies $($in millions$)$:

Line Item Description Amazon Netflix

Balance sheet, end of year:

Cash $$36,092$ $$5,018$

Short$-$term investments $18,929$

Income statement:

Operating expenses $265,98117,552$

Depreciation expense $21,7899,320$

a$.$ Determine the days$$ cash on hand for Amazon and Netflix. Assume a $365-$day year. If required, round all computations to one decimal place and use in subsequent calculations. Round final answers to one decimal place.

Line Item Description Amazon Netflix

Days$$ Cash on Hand fill in the blank $1$ of $2$

$82\mathrm{.}2$

days fill in the blank $2$ of $2$

$222\mathrm{.}5$

days

b$.$ With regard to the cash on hand which of these statements is correct?

$1.$ Netflix appears to have greater cash liquidity to support its operations.

$2.$ Amazon appears to have greater cash liquidity to support its operations.

$3.$ There is no significant difference in the days$$ cash on hand between the two companies.

$4.$ Greater cash liquidity means the business is highly profitable.