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, while Walmart, Inc. (WMT) is the leading retailer in the United States. Amazon, Best Buy, and Walmart compete in similar markets. Best Buy and Walmart sell through both traditional retail stores and the Internet, while Amazon sells only through the internet. Sales and cash flow information from recent annual reports for all three companies is as follows (in millions):

a. Determine the free cash flow for all three companies.
b. Compute the ratio of free cash flow to sales for all three companies.
c. How does Amazon compare to the other two companies with respect to generating free cash flow?

Transcribed Image Text:

Sales Net cash flows from operating activities Purchases of property, plant, and equipment Amazon Best Buy $160,408 $43,638 38,514 2,565 (16,861) (743) Walmart $523,964 25,255 (10,705)