Amazon.com Inc. (NASDAQ:AMZN)

The financial data reveals notable fluctuations in the company's operating profitability and capital efficiency over the observed periods.

Net Operating Profit After Taxes (NOPAT)

NOPAT showed a significant increase from 24,183 million USD in 2020 to 37,525 million USD in 2021, indicating improved operating performance. However, there was a sharp decline in 2022, reflected by a negative value of -5,619 million USD, signifying operating losses during that year. The company rebounded strongly in 2023 and 2024, achieving 31,856 million USD and 58,988 million USD respectively, with the 2024 figure marking the highest NOPAT within the period.

Cost of Capital

The cost of capital remained relatively stable across the periods, fluctuating slightly from 15.56% in 2020 to 15.67% in 2024. The cost was lowest in 2022 at 14.72%, coinciding with the year of negative operating profit. The incremental increases in 2023 and 2024 suggest a modest rise in capital costs as the company expanded its operations.

Invested Capital

The invested capital demonstrated a consistent year-over-year growth trend, increasing from 150,160 million USD in 2020 to 375,421 million USD in 2024. This upward movement indicates substantial capital deployment and expansion efforts over the five-year span, more than doubling the initial invested base.

Economic Profit

Economic profit displayed volatility paralleling the NOPAT changes. Positive economic profit was recorded in 2020 (819 million USD) and surged in 2021 (6,509 million USD), signaling value creation above the cost of capital. A steep deterioration occurred in 2022 with a large economic loss of -45,259 million USD, followed by a reduced negative figure in 2023 (-18,308 million USD), indicating some recovery. By 2024, economic profit returned close to zero (178 million USD), suggesting a stabilization but marginal value creation relative to invested capital.

Overall, the data portrays a company experiencing significant operational and financial challenges in 2022 with a marked loss in economic profit and operating profits turning negative. The subsequent years exhibit strong recovery in operating profitability and gradual restoration of economic value, despite steadily increasing invested capital and a relatively stable cost of capital. The trends suggest ongoing efforts to leverage capital investment effectively, although value creation remains tight relative to the capital cost as of the latest data.

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.

Economic Profit

The economic profit exhibited considerable volatility over the reported periods. Initially, it increased significantly from 819 million US dollars to 6,509 million US dollars between 2020 and 2021. However, there was a sharp decline in subsequent years, with economic profit turning negative in 2022, reaching a low of -45,259 million US dollars. This negative trend persisted in 2023, though with slightly less magnitude at -18,308 million US dollars, before approaching a near break-even point in 2024 with a modest positive value of 178 million US dollars.

Invested Capital

Invested capital demonstrated a consistent upward trend throughout the five-year period. The amount grew from approximately 150 billion US dollars in 2020 to 375 billion US dollars in 2024. This steady increase reflects ongoing investment and capital deployment, with notable acceleration between 2021 and 2022, as well as continued growth in the following years.

Economic Spread Ratio

The economic spread ratio mirrored the fluctuations observed in economic profit. Starting at a modest positive value of 0.55% in 2020, it rose sharply to 3.21% in 2021, indicating enhanced returns relative to the capital invested. However, it then declined drastically to negative figures in 2022 and 2023, reaching -16.8% and -5.6%, respectively. By 2024, the ratio returned to a marginally positive level of 0.05%, signaling a potential stabilization or recovery in capital efficiency.

Overall Analysis

The company experienced a period of strong profitability and efficient capital use through 2021, followed by a significant downturn in economic performance in 2022 and 2023. Despite substantial increases in invested capital during these years, economic profit and spread ratios contracted sharply, raising concerns about returns on investment during that timeframe. The slight positive rebounds in 2024 suggest an initial recovery phase, but profitability and capital efficiency remain subdued compared to earlier peak levels.

Adjusted Net Sales

There has been a steady increase in adjusted net sales over the observed periods. Starting from approximately 387.5 billion USD in 2020, the sales increased to about 472.2 billion USD in 2021, followed by continuous growth reaching around 641.6 billion USD by the end of 2024. This pattern indicates a consistent expansion in revenue generation.

Economic Profit

The economic profit exhibited significant volatility across the years. In 2020, the economic profit was positive at approximately 819 million USD, followed by a substantial increase to about 6.5 billion USD in 2021. However, in 2022, the economic profit sharply declined into a negative territory, registering a loss of approximately 45.3 billion USD. While 2023 saw a reduction in the negative economic profit to about 18.3 billion USD, 2024 experienced a return to a marginal positive economic profit of 178 million USD. This trend suggests challenges in maintaining profitability despite increasing sales until a recovery is noticed in 2024.

Economic Profit Margin

The economic profit margin closely reflects the trends seen in economic profit. Starting at a low positive margin of 0.21% in 2020, it rose to 1.38% in 2021, indicating improved profitability relative to sales. This was followed by a sharp decline to -8.77% in 2022, showing a significant erosion of profitability. The margin improved to -3.16% in 2023, though still negative, and reached a slight positive margin of 0.03% in 2024, aligning with the modest positive economic profit for that year.

Overall Analysis

The data indicates strong growth in sales revenue which did not consistently translate into proportional economic profits during the middle years, particularly 2022 and 2023. The marked negative economic profits and margins during these periods highlight potential increased costs, investments, or operational challenges impacting overall economic value. The modest recovery in 2024 suggests an improvement in profitability metrics, albeit still limited in scale relative to sales volume.