Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Amazon.com Inc. (NASDAQ:AMZN)

Analysis of Goodwill and Intangible Assets

Advanced level

Goodwill and Intangible Asset Disclosure

Amazon.com Inc., balance sheet: goodwill and intangible assets

US$ in millions

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Goodwill 15,017  14,754  14,548  13,350  3,784 
Marketing-related 2,289  2,303  2,542  2,486  499 
Contract-based 1,917  1,680  1,430  1,013  397 
Technology- and content-based 948  1,005  941  640  705 
Customer-related 179  282  437  283  299 
Finite-lived intangible assets, gross 5,333  5,270  5,350  4,422  1,900 
Accumulated amortization (1,495) (1,249) (1,240) (1,051) (1,046)
Finite-lived intangible assets, net 3,838  4,021  4,110  3,371  854 
IPR&D and other 1,143  28  —  —  — 
Indefinite-lived intangible assets 1,143  28  —  —  — 
Acquired intangibles 4,981  4,049  4,110  3,371  854 
Goodwill and acquired intangible assets 19,998  18,803  18,658  16,721  4,638 

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

Item Description The company
Goodwill Amount after accumulated impairment loss of an asset representing future economic benefits arising from other assets acquired in a business combination that are not individually identified and separately recognized. Amazon.com Inc.’s goodwill increased from 2018 to 2019 and from 2019 to 2020.
Acquired intangibles Sum of the carrying amounts of all intangible assets, excluding goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Amazon.com Inc.’s acquired intangibles decreased from 2018 to 2019 but then increased from 2019 to 2020 exceeding 2018 level.
Goodwill and acquired intangible assets Sum of the carrying amounts of all intangible assets, including goodwill, as of the balance sheet date, net of accumulated amortization and impairment charges. Amazon.com Inc.’s goodwill and acquired intangible assets increased from 2018 to 2019 and from 2019 to 2020.

Adjustments to Financial Statements: Removal of Goodwill

Amazon.com Inc., adjustments to financial statements

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Adjustment to Total Assets
Total assets (as reported) 321,195  225,248  162,648  131,310  83,402 
Less: Goodwill 15,017  14,754  14,548  13,350  3,784 
Total assets (adjusted) 306,178  210,494  148,100  117,960  79,618 
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported) 93,404  62,060  43,549  27,709  19,285 
Less: Goodwill 15,017  14,754  14,548  13,350  3,784 
Stockholders’ equity (adjusted) 78,387  47,306  29,001  14,359  15,501 

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).


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


Adjusted Financial Ratios: Removal of Goodwill (Summary)

Amazon.com Inc., adjusted financial ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Total Asset Turnover
Reported total asset turnover 1.20 1.25 1.43 1.35 1.63
Adjusted total asset turnover 1.26 1.33 1.57 1.51 1.71
Financial Leverage
Reported financial leverage 3.44 3.63 3.73 4.74 4.32
Adjusted financial leverage 3.91 4.45 5.11 8.22 5.14
Return on Equity (ROE)
Reported ROE 22.84% 18.67% 23.13% 10.95% 12.29%
Adjusted ROE 27.21% 24.50% 34.73% 21.12% 15.30%
Return on Assets (ROA)
Reported ROA 6.64% 5.14% 6.19% 2.31% 2.84%
Adjusted ROA 6.97% 5.51% 6.80% 2.57% 2.98%

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

Financial ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amazon.com Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Amazon.com Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Amazon.com Inc.’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amazon.com Inc.’s adjusted ROA deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

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


Adjusted Total Asset Turnover

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net sales 386,064  280,522  232,887  177,866  135,987 
Total assets 321,195  225,248  162,648  131,310  83,402 
Activity Ratio
Total asset turnover1 1.20 1.25 1.43 1.35 1.63
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net sales 386,064  280,522  232,887  177,866  135,987 
Adjusted total assets 306,178  210,494  148,100  117,960  79,618 
Activity Ratio
Adjusted total asset turnover2 1.26 1.33 1.57 1.51 1.71

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

2020 Calculations

1 Total asset turnover = Net sales ÷ Total assets
= 386,064 ÷ 321,195 = 1.20

2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= 386,064 ÷ 306,178 = 1.26

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Amazon.com Inc.’s adjusted total asset turnover ratio deteriorated from 2018 to 2019 and from 2019 to 2020.

Adjusted Financial Leverage

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Total assets 321,195  225,248  162,648  131,310  83,402 
Stockholders’ equity 93,404  62,060  43,549  27,709  19,285 
Solvency Ratio
Financial leverage1 3.44 3.63 3.73 4.74 4.32
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Adjusted total assets 306,178  210,494  148,100  117,960  79,618 
Adjusted stockholders’ equity 78,387  47,306  29,001  14,359  15,501 
Solvency Ratio
Adjusted financial leverage2 3.91 4.45 5.11 8.22 5.14

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

2020 Calculations

1 Financial leverage = Total assets ÷ Stockholders’ equity
= 321,195 ÷ 93,404 = 3.44

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted stockholders’ equity
= 306,178 ÷ 78,387 = 3.91

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Amazon.com Inc.’s adjusted financial leverage ratio decreased from 2018 to 2019 and from 2019 to 2020.

Adjusted Return on Equity (ROE)

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 21,331  11,588  10,073  3,033  2,371 
Stockholders’ equity 93,404  62,060  43,549  27,709  19,285 
Profitability Ratio
ROE1 22.84% 18.67% 23.13% 10.95% 12.29%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 21,331  11,588  10,073  3,033  2,371 
Adjusted stockholders’ equity 78,387  47,306  29,001  14,359  15,501 
Profitability Ratio
Adjusted ROE2 27.21% 24.50% 34.73% 21.12% 15.30%

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

2020 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 21,331 ÷ 93,404 = 22.84%

2 Adjusted ROE = 100 × Net income ÷ Adjusted stockholders’ equity
= 100 × 21,331 ÷ 78,387 = 27.21%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as net income divided by adjusted shareholders’ equity. Amazon.com Inc.’s adjusted ROE deteriorated from 2018 to 2019 but then slightly improved from 2019 to 2020.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
As Reported
Selected Financial Data (US$ in millions)
Net income 21,331  11,588  10,073  3,033  2,371 
Total assets 321,195  225,248  162,648  131,310  83,402 
Profitability Ratio
ROA1 6.64% 5.14% 6.19% 2.31% 2.84%
Adjusted for Goodwill
Selected Financial Data (US$ in millions)
Net income 21,331  11,588  10,073  3,033  2,371 
Adjusted total assets 306,178  210,494  148,100  117,960  79,618 
Profitability Ratio
Adjusted ROA2 6.97% 5.51% 6.80% 2.57% 2.98%

Based on: 10-K (filing date: 2021-02-03), 10-K (filing date: 2020-01-31), 10-K (filing date: 2019-02-01), 10-K (filing date: 2018-02-02), 10-K (filing date: 2017-02-10).

2020 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 21,331 ÷ 321,195 = 6.64%

2 Adjusted ROA = 100 × Net income ÷ Adjusted total assets
= 100 × 21,331 ÷ 306,178 = 6.97%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as net income divided by adjusted total assets. Amazon.com Inc.’s adjusted ROA deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.