Amazon.com Financial Statement and Financial Ratios Analysis

Amazon.com Inc. Financial Statements and Financial Ratios Analyzed

A Beginner's Guide to Amazon.com Financial Analysis - 2021

$5.99
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  • Included Easy to use format.
  • Included Amazon's Summarized Income Statement and Balance Sheet for 2016-2020
  • Included Popular financial ratios for Amazon.com (2016-2020) included... With calculations and formulas!
  • Included Expert tips to help with financial statements analysis.
  • Included Expert tips to help with Amazon's financial ratios analysis.
  • NOT Included-Identify and discuss Amazon's financial trends.
  • NOT Included-Expert financial analysis done by Paul Borosky, MBA.
  • NOT Included- Analyst "Letter Grades" for Amazon's ratios.
  • NOT Included-Free Annual Reports Download for Amazon (5 Years)

Amazon.com Financial Report by Paul Borosky, MBA. - 2021

$9.99
  • Included Easy to download PDF File.
  • Included Easy to use format.
  • Included Amazon's Summarized Income Statement and Balance Sheet for 2016-20210
  • Included Popular financial ratios for Amazon.com (2016-2020) included... With calculations and formulas!
  • Included Expert tips to help with financial statements analysis.
  • Included Expert tips to help with Amazon.com financial ratios analysis.
  • Included Identify and discuss Amazon's financial trends.
  • Included Expert financial analysis done by Paul Borosky MBA.
  • Included Analyst "Letter Grades" for Amazon's ratios.
  • Included Free Annual Reports Download for Amazon(5 years).

Hey All,

Thanks for visiting my Amazon.com Financial Report page. On this page, you will be able to find preliminary information about Amazon's current financial performance as well as some historical track records and trends. 

For a more detailed examination of Amazon's financial performance, I offer two reports, which are "A Beginner's Guide to Amazon.com Financial Analysis" and "Amazon.com Financial Report by Paul Borosky, MBA." Both reports are written by myself, Paul Borosky, MBA., Doctoral Candidate, and published author, and include:

  • Summarized income statement for the last 5 years.
  • Summarized balance sheet for the last 5 years.
  • Five years’ worth of over twenty common financial ratios presented with formulas, calculations, and analysis tips for each ratio.
  • Line by line description, explanation, and analysis tip for most financial statement line items and financial ratios.
  • Professional financial analysis tips are provided in each section to help YOU conduct your OWN financial analysis!
  • Each section includes an “in other words” segment.  This is where I use plain English to explain concepts.

 

For a MORE in-depth reviewof the company's financial statements and ratios, make sure to buy my "Amzon.com Financial Report".  The financial report includes all aspects of my "Beginner's Guide" plus a whole lot more...

  • Professional financial analysis of important income statements, balance sheets, and financial ratio trends.
  • "Letter Grade" is assigned to most financial statement line items and financial ratios to help you better understand the overall trends for the last 5 years.
  • Overall financial analysis summary for the company.

Enjoy the preliminary information and for a more detailed analysis, buy the financial report!

Sincerely,

Paul, MBA. 

 

 

 

 

PDF/Downloadable Version

Amazon 2021 Beginner's Guide to Financial Analysis

Amazon.com Beginner's Guide 2021

Table of Contents

  • Disclaimer 3
  • Forward 4
  • Income Statement 6
  • com’s Summarized Income Statements 6
  • Revenues 7
  • Cost of Goods Sold (COGS) 8
  • Selling, General, and Administrative Expenses (SG&A 8
  • Research and Development (R&D) 9
  • Operating Expenses 10
  • Earnings Before Interest and Taxes (EBIT 10
  • Interest Expense 11
  • Earnings Before Taxes (EBT) 12
  • Taxes 12
  • Net income 12
  • Tax Rate 13
  • Balance Sheet 15
  • com’s Summarized Balance Sheets 15
  • Cash 16
  • Short-Term Investments 17
  • Accounts Receivables 17
  • Inventory 18
  • Current Assets 19
  • Property, Plant, and Equipment (PP&E) 20
  • Total Assets 20
  • Accounts Payable 21
  • Accrued Expenses 22
  • Short-Term Debt 23
  • Total Current Liabilities 24
  • Long Term Debt (LT Debt) 25
  • Total Liabilities 26
  • Common Stock and Additional Paid-in Capital 27
  • Treasury 27
  • Retained Earnings 28
  • Total Equity 29
  • Financial Ratios 30
  • com Liquidity Ratios 31
  • Current Ratio 31
  • Quick Ratio 32
  • Cash Ratio 33
  • com Asset Ratios 35
  • Total Asset Turnover 36
  • Fixed Asset Turnover 37
  • Days Sales Outstanding 37
  • Inventory Turnover 38
  • Accounts Receivable Turnover 39
  • Accounts Payable Turnover 40
  • Other Asset Ratio Calculations 41
  • Working Capital Turnover 41
  • Average Days in Inventory 41
  • Average Days Payable 41
  • com Profitability Ratios 43
  • Return on Assets (ROA) 43
  • Return on Equity (ROE) 44
  • Net Profit Margin 45
  • Gross Profit Margin 46
  • Operating Profit Margin 46
  • com Debt Ratios 48
  • Debt Ratio 48
  • Debt to Equity Ratio 49
  • Times Interest Earned 50
Amazon.com Financial Report 2021 by Paul Borosky, MBA.
  • Included - Free Bonus Downloads: Annual Statements for the Last Five Years (10k reports)!
  • Included - Expert financial analysis done by Paul Borosky MBA.
  • Included - Analyst "Letter Grades" for ratios.
  • **See Terms and Conditions.

 

Amazon.com Financial Report 2021

Table of Contents

  • Disclaimer 3
  • Forward 4
  • Income Statement 6
  • com’s Summarized Income Statements 6
  • Revenues 7
  • Cost of Goods Sold (COGS) 8
  • Selling, General, and Administrative Expenses (SG&A 9
  • Research and Development (R&D) 10
  • Operating Expenses 11
  • Earnings Before Interest and Taxes (EBIT 11
  • Interest Expense 12
  • Earnings Before Taxes (EBT) 13
  • Taxes 13
  • Net income 14
  • Tax Rate 15
  • Balance Sheet 16
  • com’s Summarized Balance Sheets 16
  • Cash 17
  • Short-Term Investments 18
  • Accounts Receivables 19
  • Inventory 20
  • Current Assets 21
  • Property, Plant, and Equipment (PP&E) 22
  • Total Assets 23
  • Accounts Payable 24
  • Accrued Expenses 25
  • Short-Term Debt 25
  • Total Current Liabilities 26
  • Long Term Debt (LT Debt) 27
  • Total Liabilities 29
  • Common Stock and Additional Paid-in Capital 29
  • Treasury 30
  • Retained Earnings 31
  • Total Equity 32
  • Financial Ratios 33
  • com’s Liquidity Ratios 34
  • Current Ratio 34
  • Cash Ratio 35
  • Quick Ratio 36
  • com’s Asset Ratios 38
  • Total Asset Turnover 39
  • Fixed Asset Turnover 40
  • Days Sales Outstanding 41
  • Inventory Turnover 42
  • Accounts Receivable Turnover 43
  • Accounts Payable Turnover 44
  • Other Asset Ratio Calculations 45
  • Working Capital Turnover 45
  • Average Days in Inventory 45
  • Average Days Payable 46
  • com’s Profitability Ratios 47
  • Return on Assets (ROA) 47
  • Return on Equity (ROE) 48
  • Net Profit Margin 49
  • Gross Profit Margin 50
  • Operating Profit Margin 51
  • com’s Debt Ratios 53
  • Debt Ratio 53
  • Debt to Equity Ratio 54
  • Times Interest Earned 55
  • Summary 57
  • Amazon.com’s Strengths 57
  • Amazon.com’s Weaknesses 57
  • Amazon.com’s Final Grade 57

Sample Financial Report

Sample Financial Report by Paul Borosky, MBA.
Financial Report Sample 2

Amazon.com: Brief Summary

Amazon.com's headquarters is located in Seattle, Washington.  The company competes in the consumer cyclical sector—specifically, the internet retail segment.  At present, the organization employs approximately 1.2 million individuals.  Amazon.com, Inc. is a retail seller of products and subscriptions to consumers and commercial businesses throughout North America as well as on an international basis.  Amazon.com has three main business segments, which would be North America, International, and Amazon Web Services (AWS).  The firm sells products and content purchased for resale as well as offers a product line of their own, which includes Kindle, Fire tablets, Fire TVs, Rings, Echo, and other devices.  

From a financial analysis perspective, Amazon.com stock is currently trading at $2799.72 as of January 26th, 2022.  The organization’s market Is $1.4 trillion.  The organization’s beta currently sits at 1.1.  This indicates that the organization is slightly riskier as compared to the overall market.  The company’s current stock range is between $2,707 and $3,773.  Based on our research, Amazon.com has yet to pay out dividends to shareholders.  This may indicate that the firm is still in the growth phase of its business cycle (1/22).

Amazon.com Financial Report Sources

Amazon.com 2021 Financial Statements and Financial Ratios: Defined, Discussed, and Analyzed for 5 Years” was written by, Paul Borosky, MBA., and owner of Quality Business Plan.  In this summarized report, the author researched Amazon.com 10k, Amazon.com 2019 10k annual report, Amazon's 2016 10k annual report, Amazon's 2020 10k annual report, and Amazon's 2014 10k annual report as the basis for information gathering.  Once all Amazon.com's 10k annual statements were collected, the author then inserted Amazon.com's income statement information and Amazon.com's balance sheet information into a customized financial template. 

 

Section 1: Amazon.com Income Statement Analyzed

In this section, I walk through a broad definition as to what an income statement is and why it is important.  From this, I then discuss and define income statement line items, such as revenues, gross profits, etc. in detail.  After each line item is defined and discussed, I finally offer a summary analysis of Amazon.com’s important income statement line item trends, in most cases.

Revenue Growth:

In the last five years, Amazon’s revenues have grown on average about 27.7% annually.  Their largest growth year in the last five years was in 2020, which had a growth rate of 37.6%.  Unfortunately, in the last year, the organization’s growth had declined to 21.7%.  Granted, a 21% growth rate is pretty astounding.  But it is not as good as its previous year or in 2018.  Overall, an exceptional job was done.

Analyst Grade: A+

Cost of Goods Sold:  

Amazon’s cost of goods sold grew on average at a pace of approximately 25.2%.  As compared to revenues, with a growth rate was 27.7%, the organization’s cost of goods sold is growing at a slower pace.  This is an excellent position to be in.  This means that the organization is continually increasing its gross profit margin.  A concern with this line item would be that Amazon’s cost of goods sold as compared to revenues in 2021 fell to 58% from 60.4% the previous year.  If this trend continues, then the organization’s gross profit margins will start to shrink, which is a start of a concerning trend.

Amazon.com Summary Income Statement 2021

Column1

2021

2020 2019 2018

2017

Revenues

                 469,822

                 386,064                  280,522                  232,887

                   177,866

COGS

                 272,344

                 233,307                  165,536                  139,156

                   111,934

Gross Profit

                 197,478

                 152,757                  114,986                    93,731

                     65,932

 
SG&A

                     8,823

                     6,668                      5,203                      4,336

                       3,674

Depreciation

                   34,296

                   25,251                    21,789                    15,341

                     11,478

R & D

                   56,052

                   42,740                    35,931                    28,837

                     22,620

Other                            -                            -                            -                            -                             -
Total Operating Expenses

                 444,943

                 363,165                  265,981                  220,466

                   173,760

EBIT

                   24,879

                   22,899                    14,541                    12,421

                       4,106

Other Income                            -                            -                            -                            -                             -
Interest Expense

                     1,809

                     1,647                      1,600                      1,417

                          848

EBT

                   38,151

                   24,178                    13,976                    11,261

                       3,806

Taxes

                     4,791

                     2,863                      2,374                      1,197

                          769

Net Income

                  33,364

                  21,331                   11,588                   10,073

                     3,033

 

Section 2: Amazon.com Balance Sheet Analyzed

For Amazon.com's balance sheet, I again go through each important line item from the balance sheet.  In reviewing each line item, I will define Amazon.com’s balance sheet line item, such as cash, property, plant and equipment, and liabilities.  Next, I then offer an analysis of Amazon.com’s balance sheet important line items.

Amazon.com Cash: 

Amazon’s cash holdings have continually increased from 2017, which was at $20.5 billion, to $42.1 billion in 2020.  Fortunately, the organization’s cash holding would decrease slightly to $36.2 billion in 2021.  This decrease may indicate that the organization is shifting its cash to other, more profitable areas of its business, such as short-term investments.  An excellent trend, if it holds and my assumption is correct.

Analyst Grade: A

Amazon.com Short-term Investments

In the last four years, Amazon’s short-term investments have continually increased from $9.5 billion in 2018 to $59.8 billion in 2021.  This shows that the organization is making better use of its cash holdings.  However, in the future, I would hope that the organization divests some of these funds to longer-term investments.  In doing this, the firm should be able to generate a better return on its assets in the long run.

Analyst Grade: A

Amazon.com Summary Balance Sheet 2021

Column1

2021

2020 2019 2018

2017

Cash

                     36,220

                 42,122                  36,092                  31,750

                 20,522

Short Term Investment

                     59,829

                 42,274                  18,929                    9,500

                 10,464

Account Receivable

                     32,891

                 24,542                  20,816                  16,677

                 13,164

Inventory

                     32,640

                 23,795                  20,497                  17,174

                 16,047

Other                              -                         -                         -                         -                         -
Current Assets

                 161,580

             132,733                96,334                75,101

               60,197

Net PPE

                   160,281

               113,114                  72,705                  61,797

                 48,866

Goodwill

                     15,371

                 15,017                  14,754                  14,548

                 13,350

Other                              -                         -                         -                         -                         -
Total Assets

                 420,549

             321,195              225,248              162,648

             131,310

Accounts Payable

                     78,664

                 72,539                  47,183                  38,192

                 34,616

Accrued Expense

                     51,775

                 44,138                  32,439                  23,663

                 18,170

Accrued Taxes                              -                         -                         -                         -                         -
Notes Payable                              -                         -                         -                         -                         -
LT Debt - Current                              -                         -                         -                         -                         -
Other                              -                         -                         -                         -
Total Current Liabilities

                   142,266

               126,385                  87,812                  68,391

                 57,883

LT Debt

                     48,744

                 31,816                  23,414                  23,495

                 27,743

Other                              -                         -                         -                         -                         -
Total Liabilities

                 282,304

             227,791              163,188              119,099

             103,601

Common Stock

                     55,543

                 42,870                  33,663                  26,796

                 21,394

Treasury

                       1,837

                   1,837                    1,837                    1,837

                   1,837

Retained Earnings

                     85,915

                 52,551                  31,220                  19,625

                   8,636

Other                              -                         -                         -                         -                         -
Total Equity

                 138,245

               93,404                62,060                43,549

               27,709

Total Equity & Liability

                 420,549

             321,195              225,248              162,648

             131,310

 

Section 3: Amazon.com Financial Ratios Analyzed

For this final section, I have chosen about 12 different financial ratios.  I also review some important Amazon.com's financial ratios. I first start with defining the financial ratio.  Next, I supply the financial formulas for calculating the specific ratio.  Finally, I offer a brief analysis of important financial ratios.

Amazon.com's Current Ratio:

Amazon’s current ratio in 2021 was 1.14, which is slightly above 1.0, which is the gold standard in finance.  This indicates that the organization is slightly mismanaging its short-term assets.  A better scenario would be to reduce its current ratio to about 1.0, if not slightly under.

Analyst Grade: B

Amazon.com's Total Asset Turnover:

In the last four years, Amazon’s total asset turnover has continually fallen from 1.4 in 2018 to 1.12 in 2021.  This means that the firm is generating fewer revenues using the total assets of the organization.  To mitigate this problem, the company could start paying out dividends to its shareholders.

Analyst Grade: C+

Amazon.com's Return on Equity:

Over the last five years, Amazon has done an excellent job with its return on equity.  Specifically, in the last three years, the organization has grown its return on equity from 18.67% in 2019 to 24.13% in 2021.  If the company continually takes on more debt, then investors should expect the company's return on equity to continue to grow.  However, taking on more debt also increases financial risk for the organization.

Analyst Grade: A-

Amazon.com 2021 Liquidity Ratios

Ratios

2021

2020 2019 2018

2017

Current Ratio                           1.14                    1.05
Cash Ratio                           0.68                    0.67
Quick Ratio                           0.91                    0.86
Net Working Capital                       19,314                  6,348

Amazon.com 2021 Asset Utilization

Ratios

2021

2020 2019 2018

2017

Total Asset Turnover                           1.12                    1.20
Fixed Asset Turnover                           2.93                    3.41
Days Sales Outstanding                         22.31                  21.44
Inventory Turnover (Using Sales)                         16.65                  17.43
Inventory Turnover (Using COGS)                           9.65                  10.53
Accounts Receivable Turnover                         16.36                  17.02
Working Capital Turnover                         24.33                  60.82
AP Turnover                           3.72                    3.95
Average Days Inventory                         37.82                  34.65
Average Days Payable                         98.14                  92.34
Amazon.com 2021 Profitability Ratios
Ratios

2021

2020 2019 2018

2017

Return on Assets

7.93%

6.64%

Return on Equity

24.13%

22.84%

Net Profit Margin

7.10%

5.53%

Gross Profit Margin

42.03%

39.57%

Operating Profit Margin

5.30%

5.93%

Basic Earning Power

5.92%

7.13%

ROCE

8.94%

11.75%

Capital Employed                     278,283              194,810
ROIC

11.63%

16.12%

Amazon.com 2021 Debt Ratios

Ratios 2021 2020 2019 2018 2017
Debt Ratio

11.59%

9.91%

Debt/Equity

35.26%

34.06%

Times Interest Earned                         13.75                  13.90