Analysis of Operating Leases
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.
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Amazon.com Inc. pages available for free this week:
- Cash Flow Statement
- Analysis of Profitability Ratios
- Analysis of Liquidity Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value to EBITDA (EV/EBITDA)
- Dividend Discount Model (DDM)
- Current Ratio since 2005
- Debt to Equity since 2005
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Adjustments to Financial Statements for Operating Leases
Amazon.com Inc., adjustments to financial statements
US$ in millions
Based on: 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), 10-K (reporting date: 2018-12-31).
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
Based on: 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), 10-K (reporting date: 2018-12-31).
| 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 2020 to 2021 and from 2021 to 2022. |
| 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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level. |
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Amazon.com Inc. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |
Amazon.com Inc., Financial Ratios: Reported vs. Adjusted
Adjusted Total Asset Turnover
Based on: 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), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Adjusted total asset turnover = Net sales ÷ Adjusted total assets
= ÷ =
| 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 2020 to 2021 and from 2021 to 2022. |
Adjusted Debt to Equity
Based on: 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), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 Debt to equity = Total debt ÷ Stockholders’ equity
= ÷ =
2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= ÷ =
| 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 improved from 2020 to 2021 but then slightly deteriorated from 2021 to 2022 not reaching 2020 level. |
Adjusted Return on Assets (ROA)
Based on: 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), 10-K (reporting date: 2018-12-31).
2022 Calculations
1 ROA = 100 × Net income (loss) ÷ Total assets
= 100 × ÷ =
2 Adjusted ROA = 100 × Net income (loss) ÷ Adjusted total assets
= 100 × ÷ =
| Profitability ratio | Description | The company |
|---|---|---|
| Adjusted ROA | A profitability ratio calculated as net income divided by adjusted total assets. | Amazon.com Inc. adjusted ROA improved from 2020 to 2021 but then deteriorated significantly from 2021 to 2022. |