Amazon.com Inc. (NASDAQ:AMZN)

The financial ratios presented demonstrate several notable trends between 2021 and 2025. Generally, adjustments to the reported figures result in shifts, sometimes amplifying and sometimes moderating the observed trends. Asset turnover ratios exhibit a consistent, albeit gradual, decline over the period, while liquidity and solvency ratios show more complex patterns. Profitability ratios demonstrate significant volatility, with a marked improvement in later years, particularly in the adjusted figures.

Asset Turnover

Both the reported and adjusted total asset turnover ratios decreased steadily from 1.12 in 2021 to 0.88 and 0.87 respectively in 2025. This indicates a diminishing efficiency in generating sales from the company’s asset base. The adjusted ratio consistently remains slightly higher than the reported ratio, suggesting that certain accounting treatments may understate asset utilization.

Liquidity

The reported current ratio experienced a dip in 2022 before recovering to stabilize around 1.05-1.06 in the subsequent years. Conversely, the adjusted current ratio shows a more consistent increase, rising from 1.25 in 2021 to 1.17 in 2025. This suggests that adjustments enhance the perceived short-term liquidity position. The difference between reported and adjusted values indicates potential timing differences or classifications of current assets and liabilities.

Solvency

Both reported and adjusted debt to equity ratios decreased significantly between 2021 and 2025, indicating a reduction in financial leverage. The adjusted ratios are notably higher than the reported ratios, particularly in the earlier years, suggesting that the reported figures may underestimate the company’s reliance on debt financing. A similar trend is observed in the debt to capital ratios, with adjusted values consistently exceeding reported values. Financial leverage, as measured by both reported and adjusted metrics, also decreased over the period, aligning with the declining debt ratios.

Profitability

The reported net profit margin experienced substantial fluctuation, including a negative value in 2022, before recovering to 10.83% in 2025. The adjusted net profit margin mirrors this volatility, with a more pronounced negative value in 2022 (-2.24%) and a significantly higher value in 2025 (16.48%). This suggests that adjustments have a considerable impact on reported profitability. Return on equity (ROE) and return on assets (ROA) follow similar patterns, with adjusted values generally higher than reported values, especially in the later years. The adjusted ROA shows a substantial increase from -2.54% in 2022 to 14.40% in 2025, indicating a significant improvement in asset profitability after adjustments.

In summary, the adjustments applied to these financial ratios consistently alter the reported figures, often revealing a stronger financial position than initially indicated. The declining asset turnover is a potential area of concern, while the improving profitability and decreasing leverage suggest positive developments in the company’s financial performance, particularly when considering the adjusted metrics.

The financial performance, as indicated by adjusted total asset turnover, exhibits a generally declining trend over the five-year period. While net sales consistently increased year-over-year, the growth in total assets outpaced sales growth, contributing to the observed trend. The adjusted net sales figures show a similar pattern of consistent growth, mirroring the reported net sales.

Adjusted Total Asset Turnover Trend

The adjusted total asset turnover remained relatively stable at 1.12 in both 2021 and 2022. A slight increase to 1.13 was observed in 2022 before decreasing to 1.12 in 2023. The ratio then declined to 1.05 in 2024 and further to 0.87 in 2025. This indicates a decreasing efficiency in utilizing assets to generate sales over time.

Sales Growth

Adjusted net sales increased from US$472,241 million in 2021 to US$717,297 million in 2025, representing a cumulative growth of approximately 52.0%. However, the rate of sales growth appears to be moderating in later years.

Asset Growth

Adjusted total assets grew from US$421,649 million in 2021 to US$820,442 million in 2025, a cumulative increase of roughly 94.4%. This growth in assets consistently exceeded the growth in adjusted net sales, leading to the decline in the adjusted total asset turnover ratio.

The consistent increase in adjusted total assets, coupled with a moderating rate of sales growth, suggests the company is investing in assets at a rate that does not proportionally translate into increased sales. This could be due to various factors, including investments in long-term projects, expansion into new markets, or increased working capital requirements. The declining adjusted total asset turnover warrants further investigation to determine the underlying causes and potential implications for future profitability.

The adjusted current ratio exhibits a generally improving trend over the five-year period, though with some fluctuation. Initial values are notably higher than the reported current ratio, suggesting adjustments to asset and liability classifications have a material impact on liquidity assessment. A detailed examination of the components and the resulting ratio trends follows.

Adjusted Current Ratio - Overall Trend

The adjusted current ratio begins at 1.25 in 2021, decreases to 1.04 in 2022, then increases to 1.16 in 2023 and further to 1.20 in 2024. It experiences a slight decrease to 1.17 in 2025. This indicates a strengthening liquidity position overall, despite a minor pullback in the final year of the observed period.

Adjusted Current Assets

Adjusted current assets demonstrate a consistent upward trend, increasing from US$162,680 million in 2021 to US$231,483 million in 2025. The growth is not linear, with a smaller increase between 2022 and 2023 compared to other periods. This suggests a varying rate of accumulation of liquid assets.

Adjusted Current Liabilities

Adjusted current liabilities also increase over the period, rising from US$130,439 million in 2021 to US$197,429 million in 2025. However, the rate of increase in liabilities is generally slower than the rate of increase in adjusted current assets, particularly in 2024 and 2025. This differential contributes to the improving adjusted current ratio.

Comparison to Reported Current Ratio

The adjusted current ratio consistently exceeds the reported current ratio throughout the period. The difference between the two ratios varies, but is most pronounced in 2021 and 2024. This suggests that the adjustments made to current assets and liabilities result in a more favorable liquidity picture than indicated by the standard current ratio calculation. The adjustments likely reclassify certain items, potentially moving them from current liabilities to non-current, or vice versa, or reclassifying current assets.

In summary, the adjusted current ratio indicates a generally improving liquidity position, driven by faster growth in adjusted current assets compared to adjusted current liabilities. The consistent difference between the adjusted and reported current ratios highlights the importance of understanding the specific adjustments made to assess the company’s true short-term financial health.

The adjusted debt to equity ratio exhibits a clear downward trend over the five-year period. Initially high, the ratio demonstrates increasing financial leverage followed by a period of deleveraging. Total debt fluctuates, while stockholders’ equity consistently increases, driving the observed changes in the ratio.

Adjusted Debt to Equity Ratio - Overall Trend

The adjusted debt to equity ratio decreased from 0.86 in 2021 to 0.38 in 2025. This indicates a strengthening equity position relative to debt over time. The most significant decrease occurred between 2022 and 2024, falling from 0.99 to 0.50.

Adjusted Total Debt

Adjusted total debt increased from US$132,318 million in 2021 to US$154,972 million in 2022, representing a substantial rise. It then decreased to US$147,838 million in 2024 before increasing again to US$169,934 million in 2025. While fluctuating, the debt level remains elevated compared to the beginning of the period.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity shows consistent growth throughout the period, increasing from US$153,866 million in 2021 to US$441,435 million in 2025. This consistent expansion of equity is the primary driver behind the declining adjusted debt to equity ratio.

Comparison to Reported Debt to Equity

The reported debt to equity ratio also decreased over the period, from 0.54 in 2021 to 0.20 in 2025. However, the adjusted ratio consistently reports higher values than the reported ratio across all years, suggesting that the adjustments made to debt and equity significantly impact the leverage assessment. The difference between the reported and adjusted ratios indicates that the adjustments are material.

The increasing stockholders’ equity, coupled with the fluctuating but ultimately contained debt levels, suggests improving financial stability as measured by the adjusted debt to equity ratio. The company appears to be relying more on equity financing and/or retaining earnings to fund operations and growth.

The reported debt to capital ratio demonstrates a consistent decline over the five-year period. Beginning at 0.35 in 2021, it decreased to 0.16 by 2025. This suggests a decreasing reliance on debt financing relative to the company’s capital structure, based on reported figures. However, analysis of the adjusted debt to capital ratio reveals a different trend.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio exhibits a more complex pattern. It increased from 0.46 in 2021 to a peak of 0.50 in 2022, indicating a rise in debt relative to adjusted capital during that year. Subsequently, the ratio decreased to 0.28 in 2025, although it remained consistently above the reported debt to capital ratio throughout the period.

Total debt fluctuated over the observed timeframe. An initial increase from US$73,988 million in 2021 to US$85,932 million in 2022 was followed by a decrease to US$68,242 million in 2024, before rising again to US$80,682 million in 2025. This suggests periods of both increased and decreased borrowing.

Total Capital

Total capital consistently increased throughout the period, rising from US$212,233 million in 2021 to US$491,747 million in 2025. This substantial growth indicates an expansion of the company’s capital base, likely through retained earnings and/or equity financing.

The difference between the reported and adjusted ratios suggests that the adjustments made to total debt and total capital significantly impact the assessment of the company’s leverage. The adjustments appear to be increasing both debt and capital, but at a rate that initially increases the ratio, then causes it to decline. The consistent difference between the two ratios warrants further investigation into the nature of these adjustments to understand their impact on the company’s financial risk profile.

Trend Analysis

While the reported debt to capital ratio indicates improving leverage, the adjusted debt to capital ratio presents a more nuanced picture. The initial increase followed by a decline in the adjusted ratio suggests potential volatility in the company’s capital structure and financing strategies. The continued growth in total capital provides a positive signal, but the fluctuations in total debt require monitoring.

An examination of the financial information reveals trends in adjusted financial leverage over a five-year period. Both total assets and stockholders’ equity demonstrate consistent growth annually. However, the adjusted financial leverage ratio exhibits a decreasing trend, indicating a strengthening financial position relative to its assets.

Total Assets & Stockholders’ Equity

Total assets increased steadily from US$420,549 million in 2021 to US$818,042 million in 2025. Stockholders’ equity also experienced consistent growth, rising from US$138,245 million in 2021 to US$411,065 million in 2025. The growth in equity appears to be outpacing the growth in assets, contributing to the observed leverage trend.

Reported vs. Adjusted Financial Leverage

Reported financial leverage decreased from 3.04 in 2021 to 1.99 in 2025. The adjusted financial leverage ratio mirrors this trend, declining from 2.74 in 2021 to 1.86 in 2025. The adjusted leverage consistently reports a lower ratio than the reported leverage, suggesting the adjustments made to total assets and stockholders’ equity result in a more conservative leverage calculation.

Trend Analysis of Adjusted Financial Leverage

The adjusted financial leverage ratio experienced a moderate decrease each year. From 2021 to 2022, the ratio increased slightly from 2.74 to 2.93, but then consistently decreased in subsequent years. The largest single-year decrease occurred between 2023 and 2024, moving from 2.44 to 2.06. This pattern suggests a deliberate or organic shift towards a more conservative capital structure.

The consistent growth in stockholders’ equity, coupled with the adjustments made to asset valuation, has resulted in a declining trend in adjusted financial leverage. This indicates an improving financial risk profile over the observed period.

The adjusted net profit margin exhibited considerable fluctuation over the five-year period. Initial values were strong, followed by a significant decline, and then a period of substantial recovery and growth. A detailed examination of the trends reveals key insights into the company’s profitability performance.

Adjusted Net Profit Margin – Overall Trend

The adjusted net profit margin began at 7.26% in 2021. It experienced a substantial decrease in 2022, falling to -2.24%. Subsequent years demonstrated a recovery, with the margin increasing to 5.37% in 2023, 9.60% in 2024, and reaching a high of 16.48% in 2025. This indicates a volatile period followed by improving profitability.

Adjusted Net Profit Margin – 2021-2022

The decline from 2021 to 2022 is the most pronounced shift in the observed period. This suggests a significant change in underlying cost structures or revenue generation capabilities. The negative margin in 2022 indicates that adjusted net losses exceeded adjusted net sales during that year.

Adjusted Net Profit Margin – 2023-2025

From 2023 onwards, the adjusted net profit margin consistently increased. The growth from 5.37% to 16.48% over three years represents a substantial improvement in profitability. This suggests successful implementation of cost control measures, increased operational efficiency, or favorable market conditions.

Comparison with Reported Net Profit Margin

The adjusted net profit margin consistently differed from the reported net profit margin across all years. The adjustments appear to have a material impact, particularly in 2022 where the reported margin was -0.53% compared to the adjusted margin of -2.24%. This suggests that the adjustments remove items that significantly affect the reported profitability, providing a potentially clearer picture of core business performance.

Relationship to Adjusted Net Sales

The adjusted net sales figures generally mirrored the trends in net sales, indicating that changes in the profit margin were not solely driven by fluctuations in sales volume. The increasing margin alongside increasing sales in the later years suggests that the company was able to leverage its sales growth to improve profitability.

In conclusion, the adjusted net profit margin demonstrates a period of initial strength, a significant downturn, and a subsequent strong recovery. The substantial increase in the margin from 2023 to 2025 is a positive indicator, but the initial decline warrants further investigation to understand the underlying causes.

The adjusted return on equity (ROE) exhibited considerable fluctuation over the five-year period. Initial values decreased significantly before recovering and ultimately demonstrating an upward trend. A detailed examination of the components and the resulting ratio reveals key insights into the company’s performance.

Adjusted Net Income

Adjusted net income began at US$34,277 million in 2021, decreased substantially to a loss of US$11,581 million in 2022, and then recovered to US$31,096 million in 2023. Further growth was observed in 2024, reaching US$61,582 million, and continued strongly into 2025 with US$118,177 million. This indicates a volatile earnings performance with a strong recovery and acceleration in recent years.

Adjusted Stockholders’ Equity

Adjusted stockholders’ equity showed a consistent upward trend throughout the period. Starting at US$153,866 million in 2021, it increased to US$156,057 million in 2022, US$211,305 million in 2023, US$296,608 million in 2024, and reached US$441,435 million in 2025. This consistent growth suggests increasing investment and retained earnings.

Adjusted ROE Trend

The adjusted ROE mirrored the volatility in adjusted net income. It began at 22.28% in 2021, plummeted to -7.42% in 2022, and then rebounded to 14.72% in 2023. Continued improvement was seen in 2024 at 20.76%, culminating in a significant increase to 26.77% in 2025. The substantial decline in 2022 was directly linked to the net loss, while the subsequent increases reflect the recovery in profitability and the continued growth of equity. The 2025 value represents the highest adjusted ROE within the observed period.

The divergence between reported and adjusted ROE suggests the presence of items impacting net income that are being accounted for in the adjusted figures. The substantial improvement in adjusted ROE in the later years, coupled with the growth in adjusted stockholders’ equity, indicates increasing efficiency in generating profits from shareholder investments.

The adjusted return on assets (ROA) exhibited a fluctuating pattern over the five-year period. Initial values demonstrated positive performance, followed by a significant decline, and then a period of sustained growth. A comparison between reported and adjusted ROA indicates the impact of certain adjustments on overall profitability metrics.

Adjusted ROA Trend

In 2021, the adjusted ROA stood at 8.13%. This decreased substantially in 2022 to -2.54%, representing a period of negative returns on assets. A recovery began in 2023, with the adjusted ROA rising to 6.02%. This upward trajectory continued through 2024, reaching 10.08%, and accelerated significantly in 2025, culminating in an adjusted ROA of 14.40%. This represents a considerable improvement in asset utilization and profitability.

Comparison with Reported ROA

The adjusted ROA consistently differed from the reported ROA across all years. The adjustments generally resulted in a higher ROA in 2021, 2023, 2024, and 2025. However, the negative ROA in 2022 was more pronounced when utilizing the adjusted figures. This suggests that the adjustments positively impacted net income in profitable years but exacerbated losses in the loss-making year.

Relationship with Adjusted Net Income and Assets

The increase in adjusted ROA from 2023 to 2025 correlates with both increases in adjusted net income and adjusted total assets. While assets grew steadily throughout the period, the substantial increase in adjusted net income in 2025 appears to be the primary driver of the significant ROA improvement. The negative adjusted ROA in 2022 was directly linked to a substantial adjusted net loss.

Overall, the adjusted ROA demonstrates a recovery from a period of negative returns, culminating in strong performance by the end of the observed period. The adjustments made to net income and total assets have a material impact on the calculated ROA, highlighting the importance of understanding the nature of these adjustments when evaluating the company’s financial performance.