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Amazon's Cash Cycle So Much Shorter Than Research Paper

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¶ … Amazon's cash cycle so much shorter than that of competitor Barnes & Noble? How does this comparison affect financial management decisions of other retailers? There are several reasons which explain why the Amazon Company has a shorter cash cycle than its competitor Barnes & Noble. First and foremost, Amazon is a much bigger company than Barnes & Noble both in terms of income and in the number of products that it sells. While Barnes & Noble sells some things besides book and ebooks, this is their primary product. Amazon sells everything including books, although this is a very small portion of their income. Another reason for this is that Amazon is doing better financially than Barnes & Noble. The ebook trend has bitten into Barnes & Noble's income, which they tried to combat by creating their own ereader, the Nook but this was far less successful than the Amazon ereader, Kindle and then Kindle Fire. Unlike Amazon which is highly diversified, Barnes & Noble is dependent on book sales which have continued to decline. Other retailers might look at this scenario and decide to lessen their interests in the sale of print books and to diversify their product so as not to be dependent on any one department.

2. How does Boeing achieve a cash cycle of 100 days?

Given that Boeing,...

It had a payables period of 183 days and a cash cycle of negative 77 days. Analyzing these numbers, it is clear that the cash cycle is determined by comparing the days in the operating cycle with the days in the payables period. So, if there were a difference of 100, this would give Boeing a cash cycle of 100 days.
3. Define the following terms as they apply to our work in FIN 201 in ten words or less:

Capital structure: the way a corporation finances its assets

Working capital: capital of a business used in day-to-day operations

Assets: thing that derives value because of contractual claim

Liabilities: financial obligation to pay money, goods, or services

Retained earnings: portion of income retained by the corporation instead of distributed

Liquidity: liquid assets; cash

Leverage: use of financial devices to increase return on investment

Sarbanes-Oxley: Public Company Accounting Reform and Investor Protection Act

GAAP: generally accepted accounting principles

Market value vs. book value: book value is price paid, market value is current price it…

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Works Cited

Ross, S., Westerfield, R. & Jordan, B. (2012). Fundamentals of Corporate Finance. 10th ed.

McGraw-Hill.
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