Question

Analyze Amazon's 2018 return on assets and asset turover ratios and describe if the company is doing well in comparison to its competitors

Answer 1

The return on assets ratio helps us to determine how efficiently a company uses its assets. In 2018, Amazon has 7.11% return on assets which is higher than the previous year which was 2.92% that indicates that the company is efficiently utilizing its assets compared to the previous year and as it is increasing it also indicates that the company’s profit is increasing. The return on assets ratio helps us to determine how efficiently a company uses its assets. In 2018, Amazon has 7.11% return on assets which is higher than the previous year which was 2.92% that indicates that the company is efficiently utilizing its assets compared to the previous year and as it is increasing it also indicates that the company’s profit is increasing. The competitors of Amazon such as eBay and Apple, have a higher return on assets. eBay has 10.65% and Apple has 16.33% in 2018 which indicates that they have a higher return on assets than Amazon.

Assets turnover ratio helps us to determine how a company uses its assets to increase sales. In 2018, Amazon has 4.2 times assets turnover which is higher than the previous year which was 4.6 times that indicates that the company is not efficiently using its assets to increase its sales as compared to the previous year. eBay has 0.44 times and apple has 0.7 times assets turnover ratio in 2018 which is lower than the amazon which is good for amazon.