Amazon.com Inc. (NASDAQ:AMZN)

Net operating profit after taxes (NOPAT)

The net operating profit after taxes exhibits significant fluctuations over the five-year period. Starting at 24,183 million USD in 2020, it increased notably to 37,525 million USD in 2021, indicating improved operational efficiency or revenue growth. However, there was a sharp decline in 2022, with NOPAT falling to a negative value of -5,619 million USD, reflecting operational challenges or extraordinary costs in that year. The profit rebounded in subsequent years, rising to 31,856 million USD in 2023 and further accelerating to 58,988 million USD in 2024, signaling recovery and strong operational performance.

Cost of capital

The cost of capital has remained relatively stable but shows a slight downward trend initially, moving from 15.36% in 2020 to 14.53% in 2022, which could suggest improved financing conditions or lower perceived risk. However, it increases again to 15.16% in 2023 and 15.46% in 2024, possibly reflecting changes in market conditions, increased risk premiums, or shifts in the company’s capital structure.

Invested capital

Invested capital has consistently increased each year, indicating ongoing or expanding investments in the company’s asset base. It grew from 150,160 million USD in 2020 to 202,836 million USD in 2021, then continued to expand substantially to 269,358 million USD in 2022, 326,668 million USD in 2023, and finally reaching 375,421 million USD in 2024. This sustained growth suggests an aggressive capital expenditure or acquisition strategy aimed at supporting long-term growth.

Economic profit

Economic profit trends mirror the volatility observed in NOPAT but present a more pronounced negative dip. Positive economic profit of 1,125 million USD in 2020 increased significantly to 6,913 million USD in 2021, reflecting value creation above the cost of capital. However, the company experienced a steep economic loss in 2022 with -44,748 million USD, indicating substantial destruction of shareholder value during that period. Although still negative, the loss narrowed in 2023 to -17,657 million USD, showing some improvement. By 2024, economic profit turned marginally positive again at 945 million USD, suggesting a cautious return to value creation.

Net Income (Loss)

The net income fluctuated significantly over the five-year period. Beginning at $21,331 million in 2020, there was a substantial increase to $33,364 million in 2021. However, 2022 marked a notable downturn with a net loss of $2,722 million. This negative performance rebounded sharply in the subsequent years, reaching $30,425 million in 2023 and further rising to $59,248 million in 2024. The data indicates a strong recovery and growth trajectory after the loss experienced in 2022.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a similar pattern to net income, starting at $24,183 million in 2020 and rising to $37,525 million in 2021. It then experienced a sharp decline to a negative $5,619 million in 2022, deeper than the net income loss in the same year, indicating challenges in operating profitability. However, a significant recovery occurred in 2023 with NOPAT increasing to $31,856 million, followed by a strong increase to $58,988 million in 2024. This suggests an improvement in the company's core operational efficiency and profitability in the last two years.

Overall Analysis

The financial results reveal volatility, with a peak in 2021, a pronounced downturn in 2022, and substantial recovery and growth by 2024. The presence of negative figures in 2022 for both net income and NOPAT indicates operational and profitability challenges during that year. The subsequent rebound in 2023 and 2024 demonstrates strong adaptive or strategic measures resulting in enhanced earnings and operating profit, achieving new highs at the end of the evaluated period.

Provision (benefit) for income taxes, net

The net provision for income taxes showed considerable volatility over the observed periods. In 2020 and 2021, the provision increased significantly from 2,863 million USD to 4,791 million USD. However, the year 2022 presented an unusual pattern with a net tax benefit of -3,217 million USD, indicating a reversal or tax benefit situation rather than a conventional tax expense. Subsequently, the provision rose again sharply to 7,120 million USD in 2023 and further to 9,265 million USD in 2024, reflecting a substantial increase in tax obligations or adjustments during these years.

Cash operating taxes

Cash operating taxes exhibited a steadily increasing trend from 3,844 million USD in 2020 to 5,646 million USD in 2021, followed by a more moderate rise to 5,689 million USD in 2022. In 2023, there was a notable surge to 13,583 million USD, nearly doubling the previous year's amount. This upward momentum continued in 2024 with cash operating taxes reaching 14,023 million USD. The substantial increase observed in the last two years suggests significant growth in actual tax payments, potentially correlated with rising taxable income or changes in tax rates and regulations.

Total reported debt & leases

Over the five-year period, total reported debt and leases exhibited an overall increasing trend from 100,504 million US dollars in 2020 to a peak of 154,972 million in 2022. This increase suggests a significant rise in the company's leverage or obligations during these years. However, this peak level of debt was relatively maintained in 2023, with a slight decrease to 154,556 million, followed by a further moderate reduction to 147,838 million in 2024. The slight decline in the last two years might indicate strategic deleveraging or improved debt management efforts.

Stockholders’ equity

Stockholders' equity demonstrated strong and consistent growth throughout the period under review. Starting at 93,404 million US dollars in 2020, equity levels increased markedly year over year, reaching 138,245 million in 2021 and continuing upward to 146,043 million in 2022. This growth accelerated significantly during 2023 and 2024, culminating in a sizable equity base of 285,970 million by the end of 2024. The substantial rise in equity in the final years suggests enhanced retained earnings, possible equity issuances, or asset revaluations, which strengthen the company's net asset position and financial stability.

Invested capital

Invested capital showed a continuous and pronounced increase across the five years. Beginning at 150,160 million US dollars in 2020, it increased substantially to 202,836 million in 2021, then accelerated its upward trajectory to 269,358 million in 2022. The growth sustained momentum through 2023 and 2024, reaching 326,668 million and 375,421 million respectively. This pattern indicates significant expansion in the company's total capital employed in operations, possibly due to investments in long-term assets, acquisitions, or business growth initiatives.

The financial data indicates a notable fluctuation in economic profit over the five-year period. Initially, economic profit increased significantly from 1,125 million US dollars in 2020 to a peak of 6,913 million US dollars in 2021. However, this positive trend reversed sharply in 2022, showing a substantial loss of 44,748 million US dollars. This loss decreased in magnitude somewhat in 2023, yet still remained significant at 17,657 million US dollars in negative economic profit. By 2024, the economic profit returned to a positive value, though modest at 945 million US dollars.

Invested capital demonstrated a consistent upward trend during the period. Starting at 150,160 million US dollars in 2020, it increased steadily each year, reaching 375,421 million US dollars by 2024. This continuous growth suggests ongoing investment or asset accumulation by the company.

The economic spread ratio, which measures the spread between return on invested capital and cost of capital, followed a pattern similar to economic profit. It improved from a low of 0.75% in 2020 to a more favorable 3.41% in 2021. Following this, there was a severe decline to negative values, reaching -16.61% in 2022 and recovering partially to -5.41% in 2023. By 2024, the ratio turned positive again, albeit marginally at 0.25%.

Economic Profit

Experienced a significant rise in 2021, followed by drastic negative values in 2022 and 2023, with a modest positive recovery in 2024.

Invested Capital

Displayed steady and substantial growth throughout the period, more than doubling from 2020 to 2024.

Economic Spread Ratio

Improved initially, then plummeted to significantly negative levels in 2022 and 2023, before returning to a slight positive in 2024.

Overall, the data reveals a period of strong performance in 2021, followed by pronounced challenges during 2022 and 2023, as reflected in both economic profit and economic spread ratio. Investment levels continued to rise steadily despite the fluctuations in profitability. The modest recovery in 2024 suggests potential stabilization but with economic profitability and spread remaining relatively low compared to the peak year of 2021.

Adjusted net sales

The adjusted net sales exhibit a consistent upward trend over the observed periods. Starting at approximately $387 billion in 2020, sales increased steadily each year, reaching about $642 billion by 2024. This continuous growth suggests robust revenue expansion and effective market penetration strategies.

Economic profit

The economic profit demonstrates notable volatility throughout the periods. In 2020, economic profit was positive at $1.1 billion, followed by a significant increase to $6.9 billion in 2021. However, this was followed by a sharp decline into negative territory in 2022 at approximately -$44.7 billion, improving slightly but still negative in 2023 at -$17.7 billion. By 2024, economic profit rebounded to a modest positive value of $945 million. These fluctuations reflect considerable changes in profitability and cost structures, indicating potential challenges in operational efficiencies or increased investments impacting short-term profits.

Economic profit margin

The economic profit margin mirrors the pattern observed in economic profit. It rose from 0.29% in 2020 to a peak of 1.46% in 2021, then sharply declined to -8.67% in 2022. A partial recovery occurred in 2023 with a margin of -3.05%, followed by a near breakeven margin of 0.15% in 2024. This trajectory highlights a period of declining profitability relative to sales but indicates efforts toward restoration of profit margins in the most recent year.

Summary

Overall, the data reveals a strong and steady increase in sales revenue over the five-year span, which contrasts with the volatility in economic profit and profit margin. Initial growth in profitability was offset by significant downturns in 2022 and 2023, possibly due to increased costs, strategic investments, or external economic factors. The recovery in economic profit and margin in 2024 suggests measures have been taken to improve financial performance, but profitability remains low relative to historical highs. Close monitoring and further analysis of cost drivers and operational efficiency are advisable.