1. Continuing Company AnalysisAmazon: Accounts receivable turnover and number of days' sales in receivables

   Amazon.com, Inc. is one of the largest Internet retailers in the world. Best Buy, Inc. 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. Sales and accounts receivable information for both companies for a recent period follows (in millions):

   		Amazon		Best Buy
   Sales		$88,988		$40,339
   Accounts receivable:
   Beginning of year		4,767		1,308
   End of year		5,612		1,280

   a. Determine the accounts receivable turnover for each company. Round all calculations to one decimal place.

   		Amazon		Best Buy
   Accounts Receivable Turnover		fill in the blank 1		fill in the blank 2

   b. Determine the number of days sales in receivables for each company. Use 365 days and round all calculations to one decimal place.

   		Amazon		Best Buy
   Number of Days Sales in Receivables		fill in the blank 3		fill in the blank 4

   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 into cash.
   2. Amazon is more efficient than Best buy in turning accounts receivable into cash.
   3. Both Amazon and Best Buy are equally efficient in turning accounts receivable into cash.
   4. Both Amazon and Best Buy are equally inefficient in turning accounts receivable into cash.

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   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.

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