Stock Analysis on Net

Amazon.com Inc. (NASDAQ:AMZN)

Analysis of Operating Leases

Microsoft Excel

An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Adjustments to Financial Statements for Operating Leases

Amazon.com Inc., adjustments to financial statements

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Total Assets
Total assets (as reported) 527,854 462,675 420,549 321,195 225,248
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1
Total assets (adjusted) 527,854 462,675 420,549 321,195 225,248
Adjustment to Total Debt
Total debt (as reported) 78,917 85,932 73,988 61,405 51,698
Add: Operating lease liability (before adoption of FASB Topic 842)2
Add: Current portion of lease liabilities, operating leases 8,419 7,458 6,349 4,586 3,139
Add: Long-term lease liabilities, operating leases, excluding current portion 67,220 61,582 51,981 34,513 22,696
Total debt (adjusted) 154,556 154,972 132,318 100,504 77,533

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

1, 2 Equal to total present value of future operating lease payments.


Amazon.com Inc., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios for Operating Leases (Summary)

Amazon.com Inc., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Total Asset Turnover1
Reported total asset turnover 1.09 1.11 1.12 1.20 1.25
Adjusted total asset turnover 1.09 1.11 1.12 1.20 1.25
Debt to Equity2
Reported debt to equity 0.39 0.59 0.54 0.66 0.83
Adjusted debt to equity 0.77 1.06 0.96 1.08 1.25
Return on Assets3 (ROA)
Reported ROA 5.76% -0.59% 7.93% 6.64% 5.14%
Adjusted ROA 5.76% -0.59% 7.93% 6.64% 5.14%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amazon.com Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Amazon.com Inc. adjusted debt to equity ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amazon.com Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.

Amazon.com Inc., Financial Ratios: Reported vs. Adjusted


Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net sales 574,785 513,983 469,822 386,064 280,522
Total assets 527,854 462,675 420,549 321,195 225,248
Activity Ratio
Total asset turnover1 1.09 1.11 1.12 1.20 1.25
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net sales 574,785 513,983 469,822 386,064 280,522
Adjusted total assets 527,854 462,675 420,549 321,195 225,248
Activity Ratio
Adjusted total asset turnover2 1.09 1.11 1.12 1.20 1.25

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 574,785 ÷ 527,854 = 1.09

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 574,785 ÷ 527,854 = 1.09

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amazon.com Inc. adjusted total asset turnover ratio deteriorated from 2021 to 2022 and from 2022 to 2023.

Adjusted Debt to Equity

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total debt 78,917 85,932 73,988 61,405 51,698
Stockholders’ equity 201,875 146,043 138,245 93,404 62,060
Solvency Ratio
Debt to equity1 0.39 0.59 0.54 0.66 0.83
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 154,556 154,972 132,318 100,504 77,533
Stockholders’ equity 201,875 146,043 138,245 93,404 62,060
Solvency Ratio
Adjusted debt to equity2 0.77 1.06 0.96 1.08 1.25

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Debt to equity = Total debt ÷ Stockholders’ equity
= 78,917 ÷ 201,875 = 0.39

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 154,556 ÷ 201,875 = 0.77

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Amazon.com Inc. adjusted debt-to-equity ratio deteriorated from 2021 to 2022 but then improved from 2022 to 2023 exceeding 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) 30,425 (2,722) 33,364 21,331 11,588
Total assets 527,854 462,675 420,549 321,195 225,248
Profitability Ratio
ROA1 5.76% -0.59% 7.93% 6.64% 5.14%
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Net income (loss) 30,425 (2,722) 33,364 21,331 11,588
Adjusted total assets 527,854 462,675 420,549 321,195 225,248
Profitability Ratio
Adjusted ROA2 5.76% -0.59% 7.93% 6.64% 5.14%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income (loss) ÷ Total assets
= 100 × 30,425 ÷ 527,854 = 5.76%

2 Adjusted ROA = 100 × Net income (loss) ÷ Adjusted total assets
= 100 × 30,425 ÷ 527,854 = 5.76%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amazon.com Inc. adjusted ROA deteriorated from 2021 to 2022 but then improved from 2022 to 2023 not reaching 2021 level.