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.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$)$:

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

$21,789,9,320$

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.

Amazon

Days' Cash on Hand

Netflix

$$ days

$x$ days

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

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

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

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

Greater cash liquidity means the business is highly profitable.