Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Amazon.com Inc., profitability 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).
- Gross Profit Margin
- The gross profit margin exhibits a consistent upward trend over the five-year period. Starting at 39.57% in 2020, it increased steadily each year, reaching 48.85% in 2024. This improvement suggests enhanced efficiency in production or sourcing costs relative to revenue, resulting in a higher proportion of revenue retained after direct costs.
- Operating Profit Margin
- The operating profit margin shows some fluctuations but an overall improving trajectory. It began at 5.93% in 2020, dipped to 5.3% in 2021 and further declined to 2.38% in 2022, indicating a period of reduced operational profitability. Subsequently, the margin recovered significantly, rising to 6.41% in 2023 and further increasing to 10.75% in 2024. This pattern indicates that operating expenses may have been effectively controlled or that revenue growth outpaced operating costs in the latter years.
- Net Profit Margin
- The net profit margin experienced volatility, with positive margins in most years except 2022, where it turned negative (-0.53%). From 5.53% in 2020, it increased to 7.1% in 2021, dropped to a loss in 2022, then recovered to 5.29% in 2023, and further increased to 9.29% in 2024. This suggests that external factors such as extraordinary expenses or income taxes impacted net profitability in 2022, but overall profitability improved significantly by 2024.
- Return on Equity (ROE)
- ROE experienced similar volatility to net profit margin. It increased from 22.84% in 2020 to a peak of 24.13% in 2021, followed by a steep decline to -1.86% in 2022, indicating unprofitable equity returns that year. Subsequently, ROE rebounded to 15.07% in 2023 and further to 20.72% in 2024. This trend aligns with fluctuations in net profitability and suggests a strong recovery in generating returns for shareholders after the adverse year.
- Return on Assets (ROA)
- ROA showed growth with some instability. It increased from 6.64% in 2020 to 7.93% in 2021, dropped slightly to -0.59% in 2022, indicating negative returns on company assets, then recovered to 5.76% in 2023 and improved further to 9.48% in 2024. The data reflects the company's varying efficiency in asset utilization during the period, with a notable downturn in 2022 but a strong recovery thereafter.
Return on Sales
Return on Investment
Gross Profit Margin
Amazon.com Inc., gross profit margin 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) | ||||||
| Gross profit | 311,671) | 270,046) | 225,152) | 197,478) | 152,757) | |
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Profitability Ratio | ||||||
| Gross profit margin1 | 48.85% | 46.98% | 43.81% | 42.03% | 39.57% | |
| Benchmarks | ||||||
| Gross Profit Margin, Competitors2 | ||||||
| Home Depot Inc. | 33.38% | 33.53% | 33.63% | 33.95% | 34.09% | |
| Lowe’s Cos. Inc. | 33.39% | 33.23% | 33.30% | 33.01% | 31.80% | |
| TJX Cos. Inc. | 30.00% | 27.61% | 28.50% | 23.66% | 28.46% | |
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
Gross profit margin = 100 × Gross profit ÷ Net sales
= 100 × 311,671 ÷ 637,959 = 48.85%
2 Click competitor name to see calculations.
- Net sales
- There is a consistent upward trend in net sales over the five-year period. Starting from US$386,064 million in 2020, net sales increased significantly each year, reaching US$637,959 million by 2024. This reflects strong revenue growth of approximately 65% over the timeframe.
- Gross profit
- Gross profit also exhibits a steady increase in absolute terms, rising from US$152,757 million in 2020 to US$311,671 million in 2024. This growth mirrors the increase in net sales but at a slightly higher rate, suggesting an improvement in profitability from core operations.
- Gross profit margin
- The gross profit margin demonstrates a positive trend, improving from 39.57% in 2020 to 48.85% in 2024. This indicates enhanced efficiency or favorable pricing strategies, leading to a higher proportion of revenue retained as gross profit. The margin improvement of over 9 percentage points over five years is significant and suggests operational leverage or cost management improvements.
- Summary of trends
- Overall, the data indicates robust growth in both sales and profitability. The consistent increases in net sales and gross profit, combined with an improving gross profit margin, suggest that the company has effectively expanded its market presence while also enhancing operational efficiency. These trends point to a healthy financial position with potential for sustained profitability improvements.
Operating Profit Margin
Amazon.com Inc., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | 68,593) | 36,852) | 12,248) | 24,879) | 22,899) | |
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 10.75% | 6.41% | 2.38% | 5.30% | 5.93% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Home Depot Inc. | 14.21% | 15.27% | 15.24% | 13.84% | 14.37% | |
| Lowe’s Cos. Inc. | 13.38% | 10.47% | 12.56% | 10.77% | 8.75% | |
| TJX Cos. Inc. | 10.69% | 9.73% | 9.79% | 1.81% | 10.59% | |
| Operating Profit Margin, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 11.56% | 8.63% | 6.44% | 7.38% | 8.11% | |
| Operating Profit Margin, Industry | ||||||
| Consumer Discretionary | 11.04% | 9.12% | 8.47% | 8.79% | 6.48% | |
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
Operating profit margin = 100 × Operating income ÷ Net sales
= 100 × 68,593 ÷ 637,959 = 10.75%
2 Click competitor name to see calculations.
- Net Sales
- There is a consistent upward trend in net sales over the observed periods. Starting from approximately 386 billion USD in 2020, net sales increased steadily each year, reaching nearly 638 billion USD by the end of 2024. This indicates sustained growth in the company’s revenue-generating capacity over the five-year span.
- Operating Income
- Operating income exhibited a fluctuating pattern. The value rose from about 22.9 billion USD in 2020 to nearly 24.9 billion USD in 2021, then experienced a significant decline to approximately 12.2 billion USD in 2022. However, there was a strong recovery in subsequent years, with operating income increasing sharply to 36.9 billion USD in 2023 and further to almost 68.6 billion USD in 2024, more than doubling the previous year’s figure. This indicates improved operational efficiency or enhanced profitability after a period of downturn.
- Operating Profit Margin
- The operating profit margin followed a pattern consistent with operating income, beginning at 5.93% in 2020, slightly decreasing to 5.3% in 2021, and then dropping significantly to 2.38% in 2022. After this decline, the margin improved markedly, rising to 6.41% in 2023 and reaching a high of 10.75% by 2024. This improvement signifies increased profitability relative to sales and suggests better cost management or pricing strategies during the final two years.
Net Profit Margin
Amazon.com Inc., net profit margin 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 income (loss) | 59,248) | 30,425) | (2,722) | 33,364) | 21,331) | |
| Net sales | 637,959) | 574,785) | 513,983) | 469,822) | 386,064) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 9.29% | 5.29% | -0.53% | 7.10% | 5.53% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Home Depot Inc. | 9.92% | 10.87% | 10.87% | 9.74% | 10.20% | |
| Lowe’s Cos. Inc. | 8.94% | 6.63% | 8.77% | 6.51% | 5.93% | |
| TJX Cos. Inc. | 8.25% | 7.00% | 6.76% | 0.28% | 7.84% | |
| Net Profit Margin, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 9.30% | 6.54% | 3.14% | 7.21% | 6.58% | |
| Net Profit Margin, Industry | ||||||
| Consumer Discretionary | 8.74% | 7.92% | 5.15% | 9.20% | 5.24% | |
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 profit margin = 100 × Net income (loss) ÷ Net sales
= 100 × 59,248 ÷ 637,959 = 9.29%
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income displayed a significant fluctuation over the presented period. From 2020 to 2021, net income increased substantially from $21,331 million to $33,364 million, indicating strong profitability growth. However, in 2022, there was a reversal, with the company experiencing a net loss of $2,722 million, marking a notable downturn. The following years saw a remarkable recovery, with net income rising to $30,425 million in 2023 and further increasing to $59,248 million in 2024, reaching the highest level in the period.
- Net Sales
- Net sales exhibited consistent growth throughout the five years. Starting at $386,064 million in 2020, sales increased steadily each year, reaching $469,822 million in 2021 and subsequently rising to $513,983 million in 2022. The upward trend continued in 2023 with $574,785 million, and in 2024, sales peaked at $637,959 million. This progression suggests a strong expansion in revenue generation over time.
- Net Profit Margin
- The net profit margin reflected the changes observed in net income relative to sales. It increased from 5.53% in 2020 to 7.10% in 2021, indicating improved profitability. In 2022, the margin turned negative (-0.53%), consistent with the net loss reported for that year. Profitability rebounded in 2023 with a margin of 5.29%, followed by a substantial improvement in 2024 to 9.29%, the highest margin in the dataset. This demonstrates enhanced efficiency or cost management contributing to improved earnings relative to sales.
Return on Equity (ROE)
Amazon.com Inc., ROE calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) | 59,248) | 30,425) | (2,722) | 33,364) | 21,331) | |
| Stockholders’ equity | 285,970) | 201,875) | 146,043) | 138,245) | 93,404) | |
| Profitability Ratio | ||||||
| ROE1 | 20.72% | 15.07% | -1.86% | 24.13% | 22.84% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Home Depot Inc. | 1,450.48% | 1,095.07% | — | 390.00% | — | |
| Lowe’s Cos. Inc. | — | — | — | 406.05% | 217.09% | |
| TJX Cos. Inc. | 61.27% | 54.97% | 54.69% | 1.55% | 55.01% | |
| ROE, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 31.01% | 29.39% | 17.48% | 35.05% | 40.86% | |
| ROE, Industry | ||||||
| Consumer Discretionary | 28.36% | 30.61% | 21.65% | 34.37% | 25.29% | |
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
ROE = 100 × Net income (loss) ÷ Stockholders’ equity
= 100 × 59,248 ÷ 285,970 = 20.72%
2 Click competitor name to see calculations.
The financial data reveals notable fluctuations in net income, stockholders’ equity, and return on equity (ROE) over the five-year period.
- Net Income (Loss)
- The net income shows a general upward trend with a significant dip in 2022. The amount increased from 21,331 million USD in 2020 to a peak of 33,364 million USD in 2021, followed by a loss of 2,722 million USD in 2022. Subsequently, the net income recovered robustly, reaching 30,425 million USD in 2023 and further increasing to 59,248 million USD in 2024. This pattern indicates a period of volatility in 2022, followed by strong profitability in the succeeding years.
- Stockholders' Equity
- Stockholders’ equity has shown consistent growth throughout the entire period. Starting at 93,404 million USD in 2020, it increased to 138,245 million USD in 2021 and continued rising to 146,043 million USD in 2022. The upward trend accelerated thereafter, with equity reaching 201,875 million USD in 2023 and 285,970 million USD in 2024. This steady increase suggests ongoing investments, retained earnings, or other factors contributing to the growth of the company’s net assets.
- Return on Equity (ROE)
- ROE closely mirrors the fluctuations in net income, reflecting variations in profitability relative to stockholders’ equity. It started at a strong 22.84% in 2020 and slightly improved to 24.13% in 2021. In 2022, ROE turned negative to -1.86%, corresponding to the net loss experienced that year. The ratio rebounded to 15.07% in 2023, indicating recovery in profitability, and further climbed to 20.72% in 2024. Despite the volatility, ROE remains positive and robust in the final years, though it does not reach the peak levels observed in 2020 and 2021.
Overall, the data highlights a period of financial instability in 2022, marked by a net loss and negative ROE, amid steadily increasing stockholders’ equity. The subsequent recovery is strong, with significant improvements in net income and ROE, accompanied by accelerating growth in equity. These trends suggest resilience and enhanced profitability after a temporary setback.
Return on Assets (ROA)
Amazon.com Inc., ROA 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 income (loss) | 59,248) | 30,425) | (2,722) | 33,364) | 21,331) | |
| Total assets | 624,894) | 527,854) | 462,675) | 420,549) | 321,195) | |
| Profitability Ratio | ||||||
| ROA1 | 9.48% | 5.76% | -0.59% | 7.93% | 6.64% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Home Depot Inc. | 19.79% | 22.38% | 22.86% | 18.23% | 21.94% | |
| Lowe’s Cos. Inc. | 18.49% | 14.73% | 18.91% | 12.49% | 10.85% | |
| TJX Cos. Inc. | 15.04% | 12.34% | 11.53% | 0.29% | 13.55% | |
| ROA, Sector | ||||||
| Consumer Discretionary Distribution & Retail | 11.20% | 8.50% | 4.19% | 9.17% | 9.20% | |
| ROA, Industry | ||||||
| Consumer Discretionary | 8.18% | 7.66% | 4.94% | 8.07% | 4.42% | |
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
ROA = 100 × Net income (loss) ÷ Total assets
= 100 × 59,248 ÷ 624,894 = 9.48%
2 Click competitor name to see calculations.
- Net Income (Loss)
- The net income shows a general upward trend with significant fluctuations. Starting at $21,331 million in 2020, net income rose sharply to $33,364 million in 2021. However, there was a substantial decline in 2022 resulting in a net loss of $2,722 million. This loss was followed by a strong recovery in 2023, with net income increasing to $30,425 million, and an even more pronounced increase in 2024 reaching $59,248 million.
- Total Assets
- Total assets consistently increased over the five-year period, growing from $321,195 million in 2020 to $624,894 million in 2024. This steady asset growth indicates ongoing expansion and accumulation of resources, with no periods of contraction in the data presented.
- Return on Assets (ROA)
- The ROA mirrors the net income trend, reflecting profitability relative to asset base. Starting at 6.64% in 2020, ROA increased to 7.93% in 2021 before dropping significantly to -0.59% in 2022, aligning with the net loss recorded that year. The ROA then recovered to 5.76% in 2023 and further improved to 9.48% in 2024, indicating enhanced efficiency in using assets to generate profits as the company rebounded.