Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Amazon.com Inc., long-term (investment) activity ratios
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).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio shows a gradual decline over the five-year period, decreasing from 3.41 in 2020 to 2.52 in 2024. This indicates a reduction in asset efficiency, meaning the company is generating less revenue per unit of net fixed assets over time. Despite a slight increase from 2.75 in 2022 to 2.82 in 2023, the overall trend remains downward.
- Net Fixed Asset Turnover Including Operating Lease, Right-of-Use Asset
- This metric also demonstrates a consistent downward trend, dropping from 2.56 in 2020 to 1.94 in 2024. The ratio fell steadily each year, reflecting a similar reduction in efficiency when accounting for leased assets. The data suggests increasing asset base or declining revenue generation relative to these assets.
- Total Asset Turnover
- Total asset turnover exhibits a subtle but consistent decline from 1.20 in 2020 to 1.02 in 2024. This gradual decrease signifies that the company's ability to generate revenue from its total assets is weakening over time, though the change is relatively moderate compared to fixed asset turnover ratios.
- Equity Turnover
- The equity turnover ratio reveals a marked decrease from 4.13 in 2020 to 2.23 in 2024. This substantial decline suggests a reduction in revenue generated per unit of shareholder equity, indicating either an increase in equity base or decreasing revenue levels relative to equity. The ratio dropped notably in 2023 and 2024, pointing to an accelerating decline in equity utilization efficiency.
Net Fixed Asset Turnover
Amazon.com Inc., net fixed asset turnover 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) | ||||||
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Property and equipment, net | 252,665) | 204,177) | 186,715) | 160,281) | 113,114) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 2.52 | 2.82 | 2.75 | 2.93 | 3.41 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Home Depot Inc. | 5.84 | 6.14 | 6.00 | 5.35 | 4.84 | |
| Lowe’s Cos. Inc. | 4.89 | 5.53 | 5.05 | 4.68 | 3.86 | |
| TJX Cos. Inc. | 8.25 | 8.63 | 9.21 | 6.38 | 7.83 | |
| Net Fixed Asset Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 3.07 | 3.47 | 3.43 | 3.46 | 3.82 | |
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Discretionary | 3.22 | 3.50 | 3.47 | 3.31 | 3.37 | |
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
Net fixed asset turnover = Net sales ÷ Property and equipment, net
= 637,959 ÷ 252,665 = 2.52
2 Click competitor name to see calculations.
- Net Sales
- Net sales demonstrated a consistent upward trajectory throughout the period. Starting at 386,064 million US dollars in 2020, the figure increased to 469,822 million in 2021, followed by 513,983 million in 2022. The trend persisted with 574,785 million in 2023 and further growth to 637,959 million by the end of 2024. This steady increase indicates sustained revenue growth year over year.
- Property and Equipment, Net
- The net value of property and equipment showed significant growth over the analyzed years. Beginning at 113,114 million US dollars in 2020, the value rose sharply to 160,281 million in 2021 and continued to increase to 186,715 million in 2022. The upward trend remained with 204,177 million in 2023 and a notable jump to 252,665 million by 2024. This suggests ongoing investment in fixed assets, possibly indicating capacity expansion or modernization efforts.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio declined over the period, starting at 3.41 in 2020 and dropping to 2.93 in 2021. The ratio continued to decrease to 2.75 in 2022, followed by a slight recovery to 2.82 in 2023 before falling again to 2.52 in 2024. This downward trend implies that the company's sales growth is not keeping pace proportionally with its increasing investment in fixed assets, reflecting a reduced efficiency in generating sales from fixed assets over time.
- Overall Analysis
- The data illustrates a company experiencing robust sales growth coupled with substantial investment in property and equipment. However, the decreasing net fixed asset turnover ratio highlights a potential decline in operational efficiency related to fixed asset utilization. The increase in asset base without a proportional increase in sales efficiency may warrant further investigation into asset deployment or evolving business models affecting asset productivity.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Amazon.com Inc., net fixed asset turnover (including operating lease, right-of-use asset) 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) | ||||||
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Property and equipment, net | 252,665) | 204,177) | 186,715) | 160,281) | 113,114) | |
| Operating leases | 76,141) | 72,513) | 66,123) | 56,082) | 37,553) | |
| Property and equipment, net (including operating lease, right-of-use asset) | 328,806) | 276,690) | 252,838) | 216,363) | 150,667) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 1.94 | 2.08 | 2.03 | 2.17 | 2.56 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Home Depot Inc. | 4.49 | 4.83 | 4.85 | 4.31 | 3.89 | |
| Lowe’s Cos. Inc. | 4.04 | 4.60 | 4.15 | 3.90 | 3.20 | |
| TJX Cos. Inc. | 3.40 | 3.36 | 3.44 | 2.29 | 2.90 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Consumer Discretionary Distribution & Retail | 2.33 | 2.55 | 2.52 | 2.55 | 2.83 | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Discretionary | 2.51 | 2.68 | 2.66 | 2.51 | 2.57 | |
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
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property and equipment, net (including operating lease, right-of-use asset)
= 637,959 ÷ 328,806 = 1.94
2 Click competitor name to see calculations.
The financial data indicates a consistent upward trend in net sales over the reported periods, increasing from 386,064 million US dollars in 2020 to 637,959 million US dollars in 2024. This represents a substantial growth trajectory, reflecting expanding revenue generation capabilities.
Concurrently, the value of property and equipment, net (including operating lease, right-of-use asset), has also shown significant growth, rising from 150,667 million US dollars in 2020 to 328,806 million US dollars by 2024. The nearly doubling of these assets over the five-year span suggests increased investment in physical and leased assets, possibly to support expanding operations or infrastructure enhancement.
Despite the growth in both sales and assets, the net fixed asset turnover ratio has exhibited a declining trend. Starting at 2.56 in 2020, this ratio decreased to 1.94 by 2024. A decreasing net fixed asset turnover ratio implies that the company is generating less sales per unit of fixed assets over time, which might indicate diminishing efficiency in utilizing its fixed assets to produce revenue or that asset growth is outpacing sales growth.
- Net Sales
- Consistently increased each year, showcasing robust revenue growth.
- Property and Equipment, Net
- Significant and steady investment growth, nearly doubling in five years, indicating expansion in asset base.
- Net Fixed Asset Turnover
- Gradually declined, suggesting that fixed asset utilization efficiency to generate sales has decreased during the period.
Total Asset Turnover
Amazon.com Inc., total asset turnover 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) | ||||||
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Total assets | 624,894) | 527,854) | 462,675) | 420,549) | 321,195) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.02 | 1.09 | 1.11 | 1.12 | 1.20 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Home Depot Inc. | 1.99 | 2.06 | 2.10 | 1.87 | 2.15 | |
| Lowe’s Cos. Inc. | 2.07 | 2.22 | 2.16 | 1.92 | 1.83 | |
| TJX Cos. Inc. | 1.82 | 1.76 | 1.71 | 1.04 | 1.73 | |
| Total Asset Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 1.20 | 1.30 | 1.33 | 1.27 | 1.40 | |
| Total Asset Turnover, Industry | ||||||
| Consumer Discretionary | 0.94 | 0.97 | 0.96 | 0.88 | 0.84 | |
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
Total asset turnover = Net sales ÷ Total assets
= 637,959 ÷ 624,894 = 1.02
2 Click competitor name to see calculations.
- Net Sales
- Net sales displayed a consistent upward trend over the observed five-year period. Starting at $386,064 million in 2020, sales increased each year, reaching $637,959 million by 2024. The growth appears steady, indicating effective revenue-generating activities and expanding market presence.
- Total Assets
- Total assets also saw a continuous rise from $321,195 million in 2020 to $624,894 million in 2024. The increase in assets suggests ongoing investment and expansion in the company's resource base.
- Total Asset Turnover
- Total asset turnover showed a gradual decline from 1.2 in 2020 to 1.02 in 2024. Although the company managed to grow sales significantly, the decreasing turnover ratio indicates that asset growth outpaced sales growth, resulting in less efficient utilization of assets over time.
- Overall Analysis
- The company demonstrated strong sales growth accompanied by substantial asset accumulation. However, the diminishing asset turnover ratio points to decreasing efficiency in using assets to generate sales. This may warrant management attention to optimize asset utilization.
Equity Turnover
Amazon.com Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Stockholders’ equity | 285,970) | 201,875) | 146,043) | 138,245) | 93,404) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 2.23 | 2.85 | 3.52 | 3.40 | 4.13 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Home Depot Inc. | 146.23 | 100.77 | — | 40.05 | — | |
| Lowe’s Cos. Inc. | — | — | — | 62.35 | 36.59 | |
| TJX Cos. Inc. | 7.42 | 7.85 | 8.09 | 5.51 | 7.01 | |
| Equity Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 3.33 | 4.50 | 5.57 | 4.86 | 6.21 | |
| Equity Turnover, Industry | ||||||
| Consumer Discretionary | 3.24 | 3.86 | 4.21 | 3.74 | 4.82 | |
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
Equity turnover = Net sales ÷ Stockholders’ equity
= 637,959 ÷ 285,970 = 2.23
2 Click competitor name to see calculations.
- Net Sales
- Net sales displayed a consistent upward trend across the analyzed periods, rising from $386,064 million in 2020 to $637,959 million in 2024. This steady increase indicates sustained revenue growth, reflecting expanding market presence and sales capacity over these years.
- Stockholders’ Equity
- Stockholders’ equity experienced significant growth, nearly tripling from $93,404 million in 2020 to $285,970 million in 2024. The considerable increase suggests strong capital accumulation, which may be attributed to retained earnings, additional capital injections, or appreciation in asset values, enhancing the company's financial stability and equity base.
- Equity Turnover Ratio
- The equity turnover ratio demonstrated a declining trend, decreasing from 4.13 in 2020 to 2.23 in 2024. This ratio measures the efficiency in generating sales from equity. The downward movement indicates that despite rising sales, the growth in shareholders' equity outpaced sales growth, resulting in lower sales generated per unit of equity. This could imply a more capital-intensive operation or a strategic increase in equity base relative to sales.