Amazon.com Inc. (NASDAQ:AMZN)

Inventory Turnover

The inventory turnover ratio shows a general declining trend from early 2021 through mid-2022, decreasing from 10.54 to a low around 7.3. Subsequently, it exhibits signs of recovery with fluctuations, reaching near 9.94 in early 2024 before declining slightly again toward 8.32 in late 2025. This pattern indicates initial slowing in how quickly inventory is sold but a gradual improvement thereafter, although the turnover remains lower compared to early 2021 levels.

Payables Turnover

Payables turnover displays a fluctuating pattern without a clear long-term trend. Starting near 3.93 in early 2021, the ratio oscillates typically between 3.2 and 4.3 across the observed periods. Peaks occur around Q1 2023 and Q1 2024, while relative troughs happen in late 2024 and 2025. This variability suggests inconsistent payment timing to suppliers, with occasional acceleration or delays rather than sustained directional movement.

Working Capital Turnover

The working capital turnover ratio shows highly irregular data with significant missing values. Where reported, it begins very high in early 2021 at nearly 70, then decreases sharply before data gaps. Resuming data from 2023 onwards reveals a strong upward trajectory, peaking dramatically at 413.97 in Q3 2025. Such a sharp increase implies either enhanced efficiency in using working capital to generate revenue or possibly volatile working capital levels skewing the ratio.

Average Inventory Processing Period

This metric measures the number of days inventory remains before sale. The period extends from 35 days in early 2021 to a peak near 50 days in mid-2022, followed by a declining trend to approximately 37 days in early 2024. Afterwards, it fluctuates slightly around 40–44 days through 2025. The elongation of the inventory period in 2022 points to slower inventory movement, but subsequent reductions and stabilization suggest improved management or demand conditions.

Average Payables Payment Period

The average payables payment period exhibits a generally increasing trend over time. Starting at about 93 days in early 2021, the period rises sporadically, exceeding 100 days multiple times from late 2021 onward and reaching highs above 110 days in late 2025. This extension suggests progressively longer durations before payments to suppliers are made, possibly reflecting changes in cash management strategies or negotiation terms.

Cost of Sales

The cost of sales exhibited a generally increasing pattern over the observed period. Starting from approximately $62.4 billion in early 2021, the figure showed a significant rise by the end of 2021, reaching above $82.8 billion. In subsequent years, the amounts fluctuated but maintained an upward trajectory, culminating near $88.7 billion by late 2025. This upward trend indicates growing expenses related to goods sold, possibly reflecting increased sales volume or higher production costs.

Inventories

Inventory levels also demonstrated an overall increase, beginning at around $23.8 billion in early 2021 and rising steadily to a peak of nearly $41.5 billion by late 2025. Although some periodic decreases were noted, such as between mid-2022 and late 2022, the long-term movement suggests the company has been maintaining higher inventory levels, which could be indicative of stockpiling or expansion efforts.

Inventory Turnover Ratio

The inventory turnover ratio showed variability throughout the periods but followed a general downward then somewhat stabilizing trend. Initially high at over 10.5 in early 2021, the ratio declined to values closer to 7.3 by mid-2022, signifying slower inventory movement. However, subsequent quarters saw partial recovery, with turnover ratios rising again to values above 9 by the end of 2024 before declining slightly again towards 8.3 at the end of 2025. These fluctuations suggest changes in inventory management efficiency, with periods of slower turnover potentially linked to increased inventory holdings or altered sales dynamics.

Overall Analysis

The combined patterns of increasing cost of sales and inventories, alongside a fluctuating inventory turnover ratio, point to an environment of growing operational scale accompanied by changing inventory management efficiency. The company appears to be expanding its inventory base, possibly to meet anticipated demand or in response to supply chain considerations, while cost pressures continue to grow. The variation in turnover ratios signals ongoing adjustments in how effectively inventory is being converted into sales.

The analysis of the quarterly financial data reveals several noteworthy trends concerning cost of sales, accounts payable, and payables turnover over the observed periods.

Cost of Sales

The cost of sales shows a generally increasing trend across the quarters analyzed. Starting from approximately 62,403 million US dollars in March 2021, the figures escalate with occasional fluctuations, peaking at nearly 98,893 million US dollars by December 2024. This rise suggests an expansion in operational activities or increased procurement costs over time. Seasonal effects are visible, as quarter-end values in December consistently register higher than neighboring quarters, indicative of typical year-end volume surges.

Accounts Payable

Accounts payable follow a pattern similar to cost of sales, with values rising from about 63,926 million US dollars in March 2021 to surpassing 106,000 million US dollars by September 2025. The growth trajectory is marked by steady increases punctuated by moderate dips in certain quarters, possibly reflecting timing differences in payment cycles or supplier negotiations. Like cost of sales, payables tend to peak in the fourth quarter, emphasizing seasonal trends in procurement and payment processing.

Payables Turnover Ratio

The payables turnover ratio exhibits a declining trend over the time frame. Beginning around 3.93 in March 2021, the ratio fluctuates but generally decreases to approximately 3.26 by September 2025. This downward movement implies a lengthening of the average payment period to suppliers, suggesting the company may be extending credit terms or experiencing slower payment cycles. The ratio shows some volatility, with notable dips during year-end quarters, correlating with the observed peaks in cost of sales and accounts payable.

Overall, the financial indicators suggest the company is managing a growing volume of purchases and associated liabilities, accompanied by a gradual extension in payment periods. The consistent seasonal spikes at year-end reflect operational cycles that likely impact both purchasing behaviors and cash flow management. These patterns provide insight into the company's evolving working capital dynamics and supplier relationship management strategies.

The analysis of the quarterly financial data reveals several key patterns and movements over the specified periods.

Working Capital

Working capital exhibited significant fluctuations over the reported quarters. Initially, it increased strongly from a lower base to a peak around mid-2021, reaching approximately 23,056 million USD by June 30, 2021. After this peak, a marked decline ensued, turning into negative values starting the first quarter of 2022 and persisting with considerable negative balances through the end of 2023. From early 2024 onwards, working capital recovered steadily, turning positive again and demonstrating a consistent upward trend, though at a moderated pace by 2025.

Net Sales

Net sales showed a general upward trend throughout the quarters, with a few periods of deceleration. After a steady increase from the first quarter of 2021 through the end of 2021, sales continued to grow into 2022 and 2023, peaking notably in the fourth quarters, consistent with seasonal trends typical in retail sectors. Growth persisted into 2024 and 2025, with sales reaching their highest values by the end of 2025, indicating sustained revenue expansion over time.

Working Capital Turnover

The working capital turnover ratio displayed considerable volatility and partial data availability. Early values indicate very high turnover ratios (e.g., 69.81 and 31.5), which suggest strong sales relative to working capital during those periods. Following a data gap in the middle periods, turnover reappears exhibiting an upward trajectory from 77.32, peaking dramatically at 413.97 by the third quarter of 2025. This marked increase implies more efficient utilization of working capital relative to sales in recent periods, possibly driven by higher sales volumes or more efficient working capital management.

In summary, the company experienced a period of working capital contraction in the early to mid-2020s, coinciding with growing net sales, which may indicate changing operational or investment dynamics. The recovery and sharp increase in working capital turnover in later periods reflect enhanced capital efficiency against the backdrop of ongoing sales growth. The data suggest improving operational leverage and financial management effectiveness toward the latest quarters.

Inventory Turnover

The inventory turnover ratio exhibits a declining trend from 10.54 in the first quarter of 2021 to a low range during 2022, hitting values around 7.3 to 8.4. A recovery phase is observed starting late 2022 through 2024, reaching values near 9.94. However, in 2025, the ratio experiences a decrease again to levels around 8.27 to 8.32. This pattern suggests fluctuations in how rapidly the company is able to sell and replenish its inventory, with periods of slower turnover followed by improvements and another easing down in recent quarters.

Average Inventory Processing Period

The average inventory processing period, measured in number of days, generally moves inversely to the inventory turnover ratio as expected. Starting at 35 days in early 2021, it extends to a peak of around 50 days mid-2022, indicating slower inventory movement. Subsequently, the processing period shortens during 2023 and early 2024 to approximately 37 days, aligning with the increase in inventory turnover. In the latest quarters of 2024 and into 2025, the processing period lengthens again, reaching about 44 days by the third quarter of 2025, confirming a slowdown in inventory processing speed.

Overall Insight

The company’s inventory management cycle demonstrates variability across the observed period. The early decline in inventory turnover and elongation of processing period in 2022 may indicate challenges in either demand, supply chain efficiency, or inventory strategy adjustments. The rebound in turnover and the shortening of inventory days in 2023 and early 2024 reflects improvements in operational efficiency or stronger sales. Nonetheless, the recent return to longer processing times and somewhat lower turnover in 2025 suggests renewed pressures or strategic changes affecting inventory velocity.

Payables Turnover

The payables turnover ratio has exhibited some fluctuations over the analyzed periods. Initially, it remained around 3.9 to 4.0 in early 2021, followed by a decline toward the end of 2021, reaching a low near 3.46. Thereafter, the ratio increased again, peaking at approximately 4.34 in early 2023. Subsequently, it showed a general downward trend with minor variations, declining to about 3.26 by the third quarter of 2025.

Average Payables Payment Period

The average payables payment period, which is inversely related to payables turnover, demonstrated an opposite pattern. It started near 93 days in early 2021, increasing to 105 days by the end of 2021. Following this, a decline was observed, with the period dropping to 84 days in early 2023. Thereafter, the payment period again lengthened, reaching a peak of 112 days by the third quarter of 2025. This indicates a tendency to extend payment durations towards the later periods.

Insights and Trends

The data suggests a dynamic management of payables over time, with alternating strategies regarding payment timing. The initial shorter payment cycles in 2021 shifted to longer cycles by the year's end, potentially reflecting changes in supplier agreements or cash flow management. The peak in payables turnover around early 2023 corresponds with the shortest payment periods, indicating prompt settlement of obligations during that phase. Conversely, the extended payment periods and reduced turnover ratios closer to 2025 suggest a strategic elongation of payables, possibly to preserve liquidity or manage working capital more conservatively. Overall, the patterns indicate active adjustments in payables management responsive to internal and external financial conditions.