Amazon.com Inc. (NASDAQ:AMZN)

An examination of the investment activity ratios reveals consistent, though varying, trends over the observed period. Generally, a decline in asset utilization efficiency is apparent across all measured ratios, particularly towards the later quarters. This suggests a potential shift in the company’s operational strategies or an increase in asset intensity.

Net Fixed Asset Turnover

The net fixed asset turnover ratio demonstrates a gradual downward trend from 2.84 in March 2022 to 2.01 in December 2025. While fluctuations occur quarterly, the overall trajectory indicates decreasing efficiency in generating revenue from fixed assets. The rate of decline appears to accelerate in the latter half of the period, with more substantial decreases observed from September 2024 onwards.

Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)

Similar to the standard net fixed asset turnover, this ratio also exhibits a consistent decline, moving from 2.13 in March 2022 to 1.62 in December 2025. The inclusion of operating lease and right-of-use assets results in lower turnover figures, reflecting the increased asset base considered. The pattern of decline mirrors that of the standard ratio, with a more pronounced decrease in the most recent quarters.

Total Asset Turnover

The total asset turnover ratio follows a similar pattern of decline, decreasing from 1.16 in March 2022 to 0.88 in December 2025. This indicates a decreasing ability to generate sales from the company’s total asset base. The decline is relatively steady throughout the period, although the most significant drops are observed in the final quarters.

Equity Turnover

The equity turnover ratio shows a marked decrease from 3.57 in March 2022 to 1.74 in December 2025. This suggests a diminishing ability to generate revenue from shareholder equity. The rate of decline is consistent, with a noticeable acceleration in the latter half of the observed period. This ratio experiences the largest proportional decrease compared to the other ratios analyzed.

Collectively, these ratios suggest a growing asset intensity and potentially diminishing returns on asset utilization. Further investigation into the underlying causes of these trends, such as changes in capital expenditure, operational efficiency, or revenue generation strategies, would be warranted.

The net fixed asset turnover ratio exhibits a generally declining trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio fluctuates within a relatively narrow range before demonstrating a more pronounced decrease in later periods.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The ratio begins at 2.84 and experiences minor variations, ranging from 2.75 to 2.84. This suggests a stable level of sales generation relative to the company’s net fixed assets during this timeframe. While there are quarterly fluctuations, they do not indicate a significant shift in operational efficiency.

Transitional Phase (Mar 31, 2023 – Sep 30, 2023)

From March 31, 2023, through September 30, 2023, the ratio remains relatively stable, hovering around 2.75 to 2.82. This period shows little change from the prior year, indicating continued consistent asset utilization. However, this stability precedes a more noticeable downward trend.

Declining Trend (Dec 31, 2023 – Dec 31, 2025)

A clear downward trend emerges starting with the December 31, 2023, value of 2.82. The ratio progressively decreases to 2.01 by December 31, 2025. This indicates that the company is generating less revenue for each dollar invested in net fixed assets. The decline accelerates in the latter half of the period, with more substantial decreases observed between September 30, 2024, and December 31, 2025.

The observed decrease in the net fixed asset turnover ratio warrants further investigation. Potential contributing factors could include increased investment in fixed assets without a corresponding increase in sales, a slowdown in sales growth, or a shift in business strategy that requires more capital-intensive operations. The consistent decline suggests a developing pattern that may require strategic adjustments to improve asset utilization efficiency.

Net Sales and Fixed Asset Correlation

While net sales generally increased over the period, the rate of increase in fixed assets appears to have outpaced that of sales, particularly in the later quarters. This disparity likely contributes to the observed decline in the turnover ratio. Further analysis should examine the specific investments driving the increase in fixed assets.

In conclusion, the net fixed asset turnover ratio demonstrates a consistent downward trajectory, particularly pronounced in the most recent periods. This trend suggests a diminishing efficiency in utilizing fixed assets to generate revenue and warrants a detailed review of capital expenditure strategies and sales performance.

The net fixed asset turnover ratio, calculated including operating leases and right-of-use assets, demonstrates a generally declining trend over the observed period spanning from March 31, 2022, to December 31, 2025. While fluctuations exist, the overall pattern indicates decreasing efficiency in generating net sales from its fixed asset base.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The ratio begins at 2.13 and experiences a slight decrease to 2.03 over this timeframe. This initial decline suggests a modest reduction in the efficiency of fixed asset utilization during this period. Net sales increased significantly in the December 2022 quarter, but the growth in property and equipment, net, was proportionally larger.

Stabilization and Initial Decline (Mar 31, 2023 – Dec 31, 2023)

From March 31, 2023, to December 31, 2023, the ratio remains relatively stable, fluctuating between 2.03 and 2.08. This suggests a period of consistent, though not improving, fixed asset utilization. However, a slight downward trend is still present.

Accelerated Decline (Mar 31, 2024 – Dec 31, 2025)

A more pronounced decline is observed from March 31, 2024, onwards. The ratio decreases from 2.09 to 1.62 by December 31, 2025. This indicates a significant reduction in the efficiency with which fixed assets are generating sales. The rate of increase in property and equipment, net, consistently outpaces the rate of increase in net sales during this period, driving the ratio lower.

Net Sales and Fixed Asset Trends

Throughout the period, net sales generally increased, although with some quarterly variations. However, the growth in property and equipment, net, consistently exceeded the growth in net sales, particularly in the later quarters. This disparity is the primary driver of the observed decline in the net fixed asset turnover ratio.

In conclusion, the net fixed asset turnover ratio indicates a weakening relationship between fixed asset investment and sales generation over the analyzed period. The accelerating decline in the latter portion of the period warrants further investigation to understand the underlying causes and potential implications for future investment strategies.

The total asset turnover ratio exhibits a generally declining trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio remained relatively stable, fluctuating between 1.16 and 1.17 for the first three quarters of 2022. A slight decrease to 1.11 was noted in the final quarter of 2022, and this downward trajectory continued into 2023 and 2024.

Initial Stability (Q1 2022 - Q3 2022)

The ratio demonstrated consistency during this period, indicating a stable relationship between net sales and total assets. Values hovered around 1.16, suggesting that for every dollar of assets, approximately $1.16 in sales was generated.

Gradual Decline (Q4 2022 - Q4 2024)

From the fourth quarter of 2022 through the fourth quarter of 2024, the total asset turnover ratio experienced a gradual decline, moving from 1.11 to 1.02. This suggests a decreasing efficiency in asset utilization to generate sales. While the decrease is incremental, it signals a potential need for examination of asset management strategies.

Accelerated Decrease (2025)

The rate of decline accelerated in 2025. The ratio decreased from 1.01 in the first quarter to 0.88 by the end of the year. This represents a more substantial reduction in the efficiency with which assets are being used to generate revenue. The ratio’s movement indicates that a significantly larger investment in assets is now required to produce each dollar of sales.

Overall, the observed trend suggests a weakening relationship between net sales and total assets. While the initial decline was moderate, the more pronounced decrease in 2025 warrants further investigation to understand the underlying causes, such as potential overinvestment in assets, slower sales growth, or changes in operational efficiency.

The equity turnover ratio demonstrates a consistent downward trend over the observed period, spanning from March 31, 2022, to December 31, 2025. Initially, the ratio fluctuated within a relatively narrow range, but the decline becomes more pronounced in the latter half of the period.

Overall Trend

The equity turnover ratio decreased from 3.57 in March 2022 to 1.74 in December 2025. This indicates a diminishing ability to generate net sales for each dollar of stockholders’ equity.

Initial Period (Mar 31, 2022 – Dec 31, 2022)

The ratio experienced minor fluctuations, beginning at 3.57 and reaching a peak of 3.70 in June 2022, before settling at 3.52 by the end of the year. This suggests a stable, though not increasing, relationship between sales and equity during this timeframe.

Transitional Phase (Mar 31, 2023 – Dec 31, 2023)

A more noticeable decline commenced in the first quarter of 2023, with the ratio falling from 3.40 to 2.85 by the end of the year. This period reflects a weakening of the sales generated per dollar of equity.

Accelerated Decline (Mar 31, 2024 – Dec 31, 2025)

The rate of decline accelerated further from March 2024 onwards. The ratio decreased from 2.73 to 1.74 over the final two years of the observed period. This suggests a significant reduction in the efficiency with which equity is being used to generate sales.

The consistent decrease in the equity turnover ratio warrants further investigation. Potential contributing factors could include an increase in equity without a corresponding increase in net sales, a decrease in net sales, or a combination of both. The trend suggests a potential need to evaluate strategies for improving asset utilization and sales generation relative to the company’s equity base.