Analysis of Liquidity Ratios
Liquidity ratios measure the company ability to meet its short-term obligations.
Liquidity Ratios (Summary)
Amazon.com Inc., liquidity ratios
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.05 | 0.94 | 1.14 | 1.05 | |
| Quick ratio | 0.84 | 0.81 | 0.69 | 0.86 | 0.83 | |
| Cash ratio | 0.56 | 0.53 | 0.45 | 0.68 | 0.67 |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
- Current Ratio
- The current ratio showed a moderate fluctuation over the five-year period. It initially increased from 1.05 in 2020 to 1.14 in 2021, indicating an improvement in the company's ability to cover short-term liabilities with current assets. However, it declined sharply to 0.94 in 2022, suggesting a temporary weakening in liquidity. Subsequently, the ratio recovered to 1.05 in 2023 and slightly improved to 1.06 in 2024, returning to levels similar to the beginning of the period. Overall, this indicates a mostly stable short-term liquidity position with some volatility during the middle years.
- Quick Ratio
- The quick ratio followed a somewhat similar trend but remained consistently lower than the current ratio, reflecting the exclusion of inventory from liquid assets. It increased slightly from 0.83 in 2020 to 0.86 in 2021, then experienced a more pronounced decline to 0.69 in 2022. This decline points to a reduction in the company's most liquid assets relative to current liabilities during that year. A recovery phase followed, with the ratio rising to 0.81 in 2023 and 0.84 in 2024, indicating progressive improvement but still constrained levels compared to the earlier part of the period.
- Cash Ratio
- The cash ratio remained the most conservative liquidity measure and was consistently below both the current and quick ratios throughout the period. It started at 0.67 in 2020, increased marginally to 0.68 in 2021, then declined notably to 0.45 in 2022, signaling a contraction in cash and cash equivalents relative to current liabilities. Subsequent years saw a gradual upward trend to 0.53 in 2023 and 0.56 in 2024, indicating a slow but steady rebuilding of cash reserves. Despite this, the cash ratio did not return to the initial higher levels, suggesting tighter cash management or increased short-term obligations.
- Summary
- Across all three liquidity ratios, there was a clear dip in 2022, reflecting a period of reduced liquidity and potential short-term financial strain. The recovery in 2023 and 2024 indicates corrective actions or improved operational cash flows restoring the financial health closer to earlier levels. However, the ratios show that liquidity, particularly in terms of cash and quick assets, remained tighter than at the start of the observed period. These trends suggest the company may have faced challenges in managing short-term obligations during the middle years but managed to stabilize its position subsequently.
Current Ratio
Amazon.com Inc., current ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | 190,867) | 172,351) | 146,791) | 161,580) | 132,733) | |
| Current liabilities | 179,431) | 164,917) | 155,393) | 142,266) | 126,385) | |
| Liquidity Ratio | ||||||
| Current ratio1 | 1.06 | 1.05 | 0.94 | 1.14 | 1.05 | |
| Benchmarks | ||||||
| Current Ratio, Competitors2 | ||||||
| Home Depot Inc. | 1.35 | 1.41 | 1.01 | 1.23 | 1.08 | |
| Lowe’s Cos. Inc. | 1.23 | 1.10 | 1.02 | 1.19 | 1.01 | |
| TJX Cos. Inc. | 1.21 | 1.21 | 1.27 | 1.46 | 1.24 | |
| Current Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 1.11 | 1.10 | 0.98 | 1.17 | 1.06 | |
| Current Ratio, Industry | ||||||
| Consumer Discretionary | 1.22 | 1.20 | 1.15 | 1.25 | 1.18 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Current ratio = Current assets ÷ Current liabilities
= 190,867 ÷ 179,431 = 1.06
2 Click competitor name to see calculations.
- Current Assets
- The current assets exhibit a fluctuating upward trend over the observed period. Starting at approximately 132.7 billion US dollars in 2020, they increased to around 161.6 billion in 2021 before experiencing a slight decline to 146.8 billion in 2022. Subsequently, current assets rose again, reaching 172.4 billion in 2023 and further increasing to about 190.9 billion by the end of 2024.
- Current Liabilities
- Current liabilities demonstrate a consistent upward trajectory throughout the period. Beginning at around 126.4 billion US dollars in 2020, liabilities increased steadily each year, reaching approximately 142.3 billion in 2021, 155.4 billion in 2022, 164.9 billion in 2023, and 179.4 billion by the end of 2024.
- Current Ratio
- The current ratio, reflecting short-term liquidity, shows some variability while remaining close to parity. It started slightly above 1.0 at 1.05 in 2020, improved to 1.14 in 2021, indicating enhanced liquidity. However, it declined below 1.0 to 0.94 in 2022, suggesting a potential liquidity dip. The ratio recovered to 1.05 in 2023 and remained relatively stable at 1.06 in 2024. This pattern suggests that despite fluctuations in assets and liabilities, the company's ability to cover short-term obligations remained generally stable with a minor concern in 2022.
Quick Ratio
Amazon.com Inc., quick ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 78,779) | 73,387) | 53,888) | 36,220) | 42,122) | |
| Marketable securities | 22,423) | 13,393) | 16,138) | 59,829) | 42,274) | |
| Customer receivables, net | 34,300) | 34,100) | 26,600) | 20,200) | 14,800) | |
| Vendor receivables, net | 11,600) | 8,500) | 6,900) | 5,300) | 4,800) | |
| Other receivables, net | 3,400) | 4,300) | 4,400) | 1,000) | 381) | |
| Total quick assets | 150,502) | 133,680) | 107,926) | 122,549) | 104,377) | |
| Current liabilities | 179,431) | 164,917) | 155,393) | 142,266) | 126,385) | |
| Liquidity Ratio | ||||||
| Quick ratio1 | 0.84 | 0.81 | 0.69 | 0.86 | 0.83 | |
| Benchmarks | ||||||
| Quick Ratio, Competitors2 | ||||||
| Home Depot Inc. | 0.32 | 0.26 | 0.20 | 0.47 | 0.23 | |
| Lowe’s Cos. Inc. | 0.08 | 0.09 | 0.07 | 0.28 | 0.06 | |
| TJX Cos. Inc. | 0.59 | 0.59 | 0.64 | 1.01 | 0.50 | |
| Quick Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.73 | 0.68 | 0.57 | 0.77 | 0.68 | |
| Quick Ratio, Industry | ||||||
| Consumer Discretionary | 0.90 | 0.85 | 0.81 | 0.92 | 0.88 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Quick ratio = Total quick assets ÷ Current liabilities
= 150,502 ÷ 179,431 = 0.84
2 Click competitor name to see calculations.
- Trend in Total Quick Assets
- The total quick assets displayed an overall upward trend from 2020 to 2024. Beginning at 104,377 million USD in 2020, the figure rose steadily to 122,549 million USD in 2021. There was a decline in 2022 to 107,926 million USD, followed by a significant recovery in 2023, reaching 133,680 million USD. This positive momentum continued into 2024, with quick assets increasing further to 150,502 million USD. This pattern suggests a generally growing liquidity base, despite the temporary decrease observed in 2022.
- Trend in Current Liabilities
- Current liabilities consistently increased throughout the period under review. Starting at 126,385 million USD in 2020, these liabilities rose each subsequent year, reaching 179,431 million USD by the end of 2024. The progression indicates a steady growth in short-term obligations, with the liability figure expanding by approximately 42% over the five-year span.
- Quick Ratio Analysis
- The quick ratio, which measures the company’s ability to meet short-term liabilities with its most liquid assets, exhibited some variability over the years. It started at 0.83 in 2020, increased marginally to 0.86 in 2021, but then declined notably to 0.69 in 2022. This dip corresponds with the decrease in quick assets and the rise in current liabilities during the same period. Following this low point, the ratio improved to 0.81 in 2023 and further increased to 0.84 in 2024, approaching the earlier levels. The total quick assets’ recovery, coupled with continuing growth in liabilities, explains this improvement.
- Overall Liquidity Insights
- Despite an increase in current liabilities, the company managed to strengthen its quick assets significantly after 2022, which contributed to the restoration of the quick ratio to near-adequate levels by 2024. This suggests an improving liquidity position following a temporary strain in 2022. However, the quick ratio remaining below 1 throughout indicates that quick assets were consistently insufficient to fully cover current liabilities, highlighting an ongoing liquidity risk that the company needs to monitor.
Cash Ratio
Amazon.com Inc., cash ratio calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Cash and cash equivalents | 78,779) | 73,387) | 53,888) | 36,220) | 42,122) | |
| Marketable securities | 22,423) | 13,393) | 16,138) | 59,829) | 42,274) | |
| Total cash assets | 101,202) | 86,780) | 70,026) | 96,049) | 84,396) | |
| Current liabilities | 179,431) | 164,917) | 155,393) | 142,266) | 126,385) | |
| Liquidity Ratio | ||||||
| Cash ratio1 | 0.56 | 0.53 | 0.45 | 0.68 | 0.67 | |
| Benchmarks | ||||||
| Cash Ratio, Competitors2 | ||||||
| Home Depot Inc. | 0.17 | 0.12 | 0.08 | 0.34 | 0.12 | |
| Lowe’s Cos. Inc. | 0.08 | 0.09 | 0.07 | 0.28 | 0.06 | |
| TJX Cos. Inc. | 0.54 | 0.53 | 0.59 | 0.97 | 0.45 | |
| Cash Ratio, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 0.49 | 0.44 | 0.37 | 0.61 | 0.54 | |
| Cash Ratio, Industry | ||||||
| Consumer Discretionary | 0.51 | 0.48 | 0.47 | 0.63 | 0.58 | |
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2024 Calculation
Cash ratio = Total cash assets ÷ Current liabilities
= 101,202 ÷ 179,431 = 0.56
2 Click competitor name to see calculations.
- Total Cash Assets
- The total cash assets exhibit a fluctuating trend over the five-year period. Starting at $84,396 million at the end of 2020, cash reserves increased to $96,049 million in 2021, representing a significant rise. However, in 2022, cash assets declined substantially to $70,026 million. This was followed by a recovery phase, with cash assets increasing again to $86,780 million in 2023 and reaching $101,202 million by the end of 2024, the highest value in the observed period.
- Current Liabilities
- Current liabilities have shown a consistent upward trend across the analyzed years. From $126,385 million in 2020, liabilities increased steadily each year, reaching $142,266 million in 2021, $155,393 million in 2022, $164,917 million in 2023, and culminating in $179,431 million in 2024. This steady rise indicates a continuous growth in short-term obligations.
- Cash Ratio
- The cash ratio, which measures liquidity by comparing cash assets to current liabilities, demonstrates a varying pattern. It started at 0.67 in 2020 and slightly increased to 0.68 in 2021, suggesting strong liquidity positions in these years. In 2022, the ratio dropped markedly to 0.45, reflecting the combined effect of decreased cash assets and rising current liabilities. Subsequently, the ratio improved somewhat to 0.53 in 2023 and further to 0.56 in 2024, indicating a partial recovery in liquidity but not reaching the levels observed in 2020 and 2021.
- Overall Analysis
- Over the examined period, the entity experienced increasing short-term liabilities coupled with fluctuating cash reserves. The dip in cash assets during 2022 combined with rising liabilities led to a decreased liquidity position as reflected by the cash ratio. Although the cash ratio improved in the last two years, it remained below the initial high levels, suggesting a more conservative liquidity profile. The persistent growth in current liabilities may point to increased operational scale or financing activities that should be closely monitored relative to liquid asset availability.