Amazon.com Inc. (NASDAQ:AMZN)

The analyzed financial ratios show distinct trends over the evaluated periods, reflecting changes in profitability and capital structure.

Return on Assets (ROA)

ROA began to be reported from March 31, 2021, at 6.64% and increased to 8.33% by June 30, 2021, maintaining a relatively high level through December 31, 2021. It then declined significantly during 2022, hitting negative territory (-0.59%) in March 31, 2023, before recovering and showing a steady upward trend afterward. By June 30, 2025, ROA reached 10.35%, indicating improving asset efficiency and profitability in recent quarters.

Financial Leverage

Financial leverage started at 3.39 in March 31, 2020, with minor fluctuations around that level until the end of 2021, generally staying above 3.0. From 2022 onward, there is a clear downward trend in leverage, decreasing steadily each quarter from 3.17 to 2.04 by June 30, 2025. This suggests a gradual reduction in reliance on debt financing or a change in asset structure resulting in a less leveraged position.

Return on Equity (ROE)

ROE, available starting March 31, 2021, began at 22.84% and peaked at 26.04% in June 30, 2021. Subsequently, it declined sharply through 2022, even becoming negative (-1.86%) in March 31, 2023, mirroring the ROA pattern. A recovery phase followed with ROE rising steadily to 21.16% by June 30, 2025. The pattern indicates fluctuations in equity profitability linked with periods of financial challenges and subsequent stabilization.

Overall, the data indicates that the company experienced volatility in profitability metrics during 2022 and early 2023, with a notable dip in both ROA and ROE, coupled with high financial leverage initially. Since then, profitability has improved markedly, and financial leverage has been steadily reduced, signaling enhanced operational efficiency and a stronger equity position by mid-2025.

The analysis of the quarterly financial data reveals distinct trends across the key financial ratios: Net Profit Margin, Asset Turnover, Financial Leverage, and Return on Equity (ROE).

Net Profit Margin

The Net Profit Margin shows variability over the quarters, with an initial upward trend starting around March 2021. It reached a peak near 7.1% in the first quarter of 2022, followed by a decline to slightly negative territory by the end of 2022. Subsequently, there is a recovery and consistent growth from early 2023 onward, reaching above 10% by the mid-2025 quarters. This indicates fluctuating profitability, with recent quarters demonstrating strong improvements in operational efficiency or cost management.

Asset Turnover

The Asset Turnover ratio displays a generally declining trend over the observed periods. It began around 1.2 in early 2020, with minor fluctuations near this level until 2021, when it started a gradual decrease. By mid-2025, the ratio fell to below 1.0, indicating a reduction in how efficiently the company is utilizing its assets to generate revenue. This downturn suggests potential challenges in scaling asset productivity or changes in asset base composition.

Financial Leverage

Financial Leverage shows a noticeable reduction throughout the period. Starting at approximately 3.4 in 2020, the ratio decreases steadily to around 2.0 by mid-2025. This trend points to a strategic reduction in the use of debt or other liabilities relative to equity, signaling a more conservative capital structure and potentially lower financial risk over time.

Return on Equity (ROE)

The ROE follows a pattern similar to the Net Profit Margin. It peaks at above 26% in mid-2021 before declining sharply to negative values near the end of 2022. Thereafter, it demonstrates a strong recovery, rising steadily back to levels exceeding 21% by 2025. This rebound reflects improved profitability and better utilization of equity capital in recent periods, despite earlier setbacks.

Overall, the data reflect a company that faced volatility in profitability and efficiency metrics around 2021 to 2022, possibly due to external or operational challenges. However, the latter periods show significant recovery in profitability and returns to shareholders, coupled with a deliberate reduction in financial leverage. The declining asset turnover suggests caution in interpreting profitability gains, as asset utilization efficiency appears to be diminishing.

The analyzed financial ratios reveal several noteworthy trends over the periods under review.

Tax Burden

This ratio displays some fluctuation but generally centers around values slightly below or above 1. Starting at 0.88 in March 2021, it increased to a peak of 1.14 in December 2022 before declining and stabilizing between 0.81 and 0.86 in the most recent quarters. The variations suggest changes in effective tax rates impacting net income relative to earnings before taxes.

Interest Burden

Interest burden demonstrates a gradual improvement up to mid-2022, declining from 0.95 to 0.82, indicating reduced interest expenses relative to earnings before interest and taxes. A notable dip to 0.56 occurred in March 2023, signifying a temporary significant reduction in interest expenses. Subsequently, the ratio improved steadily, reaching 0.97 by mid-2025, which implies effective management of interest costs over time.

EBIT Margin

The EBIT margin reveals a general upward trend, despite some volatility. Starting from 6.69% in March 2021, it climbed to a low of -0.69% in December 2022, indicating a brief period of operating losses. Following this trough, the margin rebounded strongly, reaching 12.7% by the end of 2025. This indicates improving operational profitability, reflecting enhanced cost control or revenue growth.

Asset Turnover

Asset turnover ratios mostly hover around 1.1, showing a slight downward trend over the full period. From a peak of 1.3 in June 2021, it gradually declined to 0.98 by mid-2025. This mild decrease suggests a modest reduction in efficiency in utilizing assets to generate revenue over time.

Financial Leverage

The financial leverage ratio shows a clear downward trend, moving from 3.39 in March 2020 to about 2.04 by mid-2025. This consistent reduction indicates a deliberate effort to decrease reliance on debt financing or manage capital structure conservatively, thereby potentially lowering financial risk.

Return on Equity (ROE)

ROE exhibits considerable volatility but an overall positive trajectory. Peaking initially around 26% in mid-2021, it then declined sharply to a negative -1.86% by December 2022, reflecting poor shareholder returns during that period. However, ROE recovered significantly thereafter, reaching over 21% by mid-2025. The improvement aligns with the increases in EBIT margin and better interest burden management, supported partly by reduced financial leverage.

In summary, the data indicates a company that has faced periods of operating and profitability challenges, particularly in late 2022, but has made considerable progress in recovering profitability and strengthening its financial position. Margins have improved notably, interest costs have been managed efficiently, and financial leverage has been steadily reduced. These developments collectively contributed to a robust recovery in shareholder returns as measured by ROE, despite a slight decline in asset utilization efficiency.

Net Profit Margin

The net profit margin shows a positive trend overall, beginning at 5.53% in March 2021 and generally increasing through to 10.54% in June 2025. There is some fluctuation within this period, with a notable dip below zero to -0.53% around March 2023. Following this low point, a steady recovery and growth is observed, culminating in the highest margin recorded over the series at over 10% by mid-2025.

Asset Turnover

Asset turnover ratio displays slight variability but an overall gradual decline from the earlier values near 1.2-1.3 (mid-2020 to mid-2021) down to under 1.0 by June 2025. This suggests a modest decrease in the efficiency with which assets are used to generate revenue across the timeframe. Variations appear minor but consistent, indicating a slow weakening in asset utilization.

Return on Assets (ROA)

The return on assets follows a pattern similar to the net profit margin, starting from 6.64% in March 2021, peaking at 8.33% mid-2021, then declining sharply to negative territory around March 2023 (-0.59%). Subsequently, ROA increases steadily, reaching a high above 10% by mid-2025. This trend reflects a temporary period of lower profitability or asset inefficiency followed by a robust recovery and improvement in overall asset returns.

Tax Burden Ratio

The tax burden ratio demonstrates moderate fluctuations over the analyzed periods. Starting at 0.88 in March 2021, it generally declines to 0.81 by December 2023 and then shows a slight upward trend stabilizing around 0.85 by mid-2025. Notably, there is a peak value recorded at 1.14 in December 2022, followed by variability. This pattern suggests changes in effective tax rates impacting net profitability but with relative stabilization in the most recent quarters.

Interest Burden Ratio

The interest burden ratio remains relatively stable between 0.88 and 0.97 from March 2021 through mid-2025, with a notable dip to 0.56 in December 2022. This dip indicates a temporary increase in interest expenses or other financial costs during that quarter, but the ratio recovers quickly, returning near previous levels. The consistency otherwise suggests stable interest expenses relative to earnings before interest and taxes, reflecting steady financial leverage or cost of debt management.

EBIT Margin

The EBIT margin shows a generally positive trend across the periods. After fluctuating between 6.69% and 8.51% from early 2020 through mid-2021, there is a significant decline to negative territory (-0.69%) in December 2022. However, following this low point, the margin rebounds strongly, increasing progressively to reach 12.7% by December 2024. This trajectory indicates recovery and improved operational efficiency or profitability after a transient downturn.

Asset Turnover Ratio

The asset turnover ratio exhibits a declining trend overall. It starts from around 1.2-1.3 levels between early 2020 and mid-2021, then gradually decreases to approximately 0.98 by mid-2025. This decline suggests the company is generating slightly less sales per unit of assets over time, which may reflect increased asset base growth outpacing revenue growth or efficiency challenges in asset utilization.

Return on Assets (ROA)

ROA mirrors the EBIT margin pattern, showing variability followed by recovery and growth. Initial values of approximately 6.64%-8.33% decrease significantly to negative values (-0.59%) in the quarter ending December 2022. Subsequently, ROA climbs steadily to over 10% by mid-2025. This pattern indicates initial pressure on net asset profitability, followed by strong improvement, potentially attributable to enhanced earnings quality or asset management post-downturn.

The analysis of the quarterly financial ratios reveals several key trends over the observed periods. The tax burden ratio, which measures the proportion of pre-tax profits paid as taxes, shows some variability but generally remains within a range from approximately 0.81 to 1.25 in recent years. Notably, after peaking above 1.1 during late 2021 and early 2022, the tax burden ratio declined and stabilized closer to the 0.80 to 0.86 range from 2023 onwards.

The interest burden ratio, representing the impact of interest expenses on earnings before tax, remains relatively stable throughout the periods, mostly hovering between 0.82 and 0.97 from 2020 onward. There is a dip to 0.56 around the end of 2021 but it quickly recovers and trends upward to just below 1.0 by mid-2025, indicating a reduced impact of interest expenses on earnings over time.

Regarding profitability metrics, the EBIT margin displayed noticeable fluctuations. It improved steadily from around 6.69% in early 2020 to a peak near 8.5% by the first quarter of 2021, then declined sharply in mid to late 2022, even turning negative briefly (-0.69%). From 2023 onwards, there is a clear recovery and consistent upward trend, with the EBIT margin reaching a strong 12.7% by the end of 2024 and continuing to slightly improve through mid-2025.

The net profit margin mirrors the EBIT margin trends closely, starting around 5.53% in early 2020, peaking just above 7.1% in early 2021, and then decreasing to negative territory (-0.53%) in late 2022. Subsequently, it exhibits a robust recovery trajectory, increasing to over 10% by mid-2025. This suggests improving operational efficiency and possibly better cost management or revenue growth after the downturn.

Tax Burden

Generally stable with some volatility; peaked in early 2022 but remained around 0.80–0.86 in recent periods.

Interest Burden

Fairly consistent with slight improvements; transient dip at end 2021 followed by recovery and gradual increase towards 1.0.

EBIT Margin

Initially rising through 2021, sharply declined mid-2022 with brief negative values, then steadily recovered to robust levels exceeding 12% by 2024–2025.

Net Profit Margin

Followed a similar pattern to EBIT margin with peak in early 2021, downturn into negative territory by late 2022, and significant recovery reaching above 10% by mid-2025.

Overall, the data indicate a period of profitability growth until early 2021, followed by a significant profit contraction and margin compression during 2022. The recovery after this period is pronounced and sustained, suggesting effective management responses or favorable market conditions leading to enhanced margins and profitability by 2025.