Stock Analysis on Net
Stock Analysis on Net
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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, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net income (as reported) 11,588  10,073  3,033  2,371  596 
Add: Net unrealized gains (losses) on available-for-sale debt securities, net of tax 79  (9) (32) 17  (2)
Net income (adjusted) 11,667  10,064  3,001  2,388  594 

Based on: 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), 10-K (filing date: 2016-01-29).

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

Amazon.com Inc., adjusted profitability ratios

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net Profit Margin
Reported net profit margin 4.13% 4.33% 1.71% 1.74% 0.56%
Adjusted net profit margin 4.16% 4.32% 1.69% 1.76% 0.56%
Return on Equity (ROE)
Reported ROE 18.67% 23.13% 10.95% 12.29% 4.45%
Adjusted ROE 18.80% 23.11% 10.83% 12.38% 4.44%
Return on Assets (ROA)
Reported ROA 5.14% 6.19% 2.31% 2.84% 0.91%
Adjusted ROA 5.18% 6.19% 2.29% 2.86% 0.91%

Based on: 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), 10-K (filing date: 2016-01-29).

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 improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by shareholders’ equity. Amazon.com Inc.’s adjusted ROE improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by total assets. Amazon.com Inc.’s adjusted ROA improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

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

Adjusted Net Profit Margin

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 11,588  10,073  3,033  2,371  596 
Net sales 280,522  232,887  177,866  135,987  107,006 
Profitability Ratio
Net profit margin1 4.13% 4.33% 1.71% 1.74% 0.56%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 11,667  10,064  3,001  2,388  594 
Net sales 280,522  232,887  177,866  135,987  107,006 
Profitability Ratio
Adjusted net profit margin2 4.16% 4.32% 1.69% 1.76% 0.56%

Based on: 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), 10-K (filing date: 2016-01-29).

2019 Calculations

1 Net profit margin = 100 × Net income ÷ Net sales
= 100 × 11,588 ÷ 280,522 = 4.13%

2 Adjusted net profit margin = 100 × Adjusted net income ÷ Net sales
= 100 × 11,667 ÷ 280,522 = 4.16%

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 improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Adjusted Return on Equity (ROE)

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Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 11,588  10,073  3,033  2,371  596 
Stockholders’ equity 62,060  43,549  27,709  19,285  13,384 
Profitability Ratio
ROE1 18.67% 23.13% 10.95% 12.29% 4.45%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 11,667  10,064  3,001  2,388  594 
Stockholders’ equity 62,060  43,549  27,709  19,285  13,384 
Profitability Ratio
Adjusted ROE2 18.80% 23.11% 10.83% 12.38% 4.44%

Based on: 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), 10-K (filing date: 2016-01-29).

2019 Calculations

1 ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 11,588 ÷ 62,060 = 18.67%

2 Adjusted ROE = 100 × Adjusted net income ÷ Stockholders’ equity
= 100 × 11,667 ÷ 62,060 = 18.80%

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 improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.

Adjusted Return on Assets (ROA)

Microsoft Excel LibreOffice Calc
Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
As Reported
Selected Financial Data (US$ in millions)
Net income 11,588  10,073  3,033  2,371  596 
Total assets 225,248  162,648  131,310  83,402  65,444 
Profitability Ratio
ROA1 5.14% 6.19% 2.31% 2.84% 0.91%
Adjusted: Mark to Market Available-for-sale Securities
Selected Financial Data (US$ in millions)
Adjusted net income 11,667  10,064  3,001  2,388  594 
Total assets 225,248  162,648  131,310  83,402  65,444 
Profitability Ratio
Adjusted ROA2 5.18% 6.19% 2.29% 2.86% 0.91%

Based on: 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), 10-K (filing date: 2016-01-29).

2019 Calculations

1 ROA = 100 × Net income ÷ Total assets
= 100 × 11,588 ÷ 225,248 = 5.14%

2 Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 11,667 ÷ 225,248 = 5.18%

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 improved from 2017 to 2018 but then slightly deteriorated from 2018 to 2019.