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

Amazon.com Inc. (NASDAQ:AMZN)

Analysis of Investments

Advanced level

Adjustment to Net Income (Loss): Mark to Market Available-for-sale Securities

Amazon.com Inc., adjustment to net income

US$ in millions

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12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (as reported) 21,331  11,588  10,073  3,033  2,371 
Add: Net unrealized gains (losses) on available-for-sale debt securities, net of tax 245  79  (9) (32) 17 
Net income (adjusted) 21,576  11,667  10,064  3,001  2,388 

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).

Adjusted Profitability Ratios: Mark to Market Available-for-sale Securities (Summary)

Amazon.com Inc., adjusted profitability ratios

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Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net Profit Margin
Reported net profit margin 5.53% 4.13% 4.33% 1.71% 1.74%
Adjusted net profit margin 5.59% 4.16% 4.32% 1.69% 1.76%
Return on Equity (ROE)
Reported ROE 22.84% 18.67% 23.13% 10.95% 12.29%
Adjusted ROE 23.10% 18.80% 23.11% 10.83% 12.38%
Return on Assets (ROA)
Reported ROA 6.64% 5.14% 6.19% 2.31% 2.84%
Adjusted ROA 6.72% 5.18% 6.19% 2.29% 2.86%

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).

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Amazon.com Inc.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Amazon.com Inc.’s adjusted ROE deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by 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., Profitability Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

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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 
Net sales 386,064  280,522  232,887  177,866  135,987 
Profitability Ratio
Net profit margin1 5.53% 4.13% 4.33% 1.71% 1.74%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 21,576  11,667  10,064  3,001  2,388 
Net sales 386,064  280,522  232,887  177,866  135,987 
Profitability Ratio
Adjusted net profit margin2 5.59% 4.16% 4.32% 1.69% 1.76%

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 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 21,331 ÷ 386,064 = 5.53%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 21,576 ÷ 386,064 = 5.59%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Amazon.com Inc.’s adjusted net profit margin ratio deteriorated from 2018 to 2019 but then improved from 2019 to 2020 exceeding 2018 level.

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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 21,576  11,667  10,064  3,001  2,388 
Stockholders’ equity 93,404  62,060  43,549  27,709  19,285 
Profitability Ratio
Adjusted ROE2 23.10% 18.80% 23.11% 10.83% 12.38%

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 × Adjusted net income ÷ Stockholders’ equity
= 100 × 21,576 ÷ 93,404 = 23.10%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Amazon.com Inc.’s adjusted ROE deteriorated from 2018 to 2019 but then improved from 2019 to 2020 not reaching 2018 level.

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: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 21,576  11,667  10,064  3,001  2,388 
Total assets 321,195  225,248  162,648  131,310  83,402 
Profitability Ratio
Adjusted ROA2 6.72% 5.18% 6.19% 2.29% 2.86%

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 × Adjusted net income ÷ Total assets
= 100 × 21,576 ÷ 321,195 = 6.72%

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