Analysis of Short-term (Operating) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Short-term Activity Ratios (Summary)
Amazon.com Inc., short-term (operating) 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).
- Inventory Turnover
- The inventory turnover ratio showed a declining trend from 9.8 in 2020 to 8.34 in 2021, stabilizing slightly in 2022 at 8.4, followed by a recovery to 9.15 in 2023 and a further increase to 9.54 in 2024. This pattern suggests an initial slowdown in inventory movement, with improvement in more recent years indicating better inventory management or increased sales efficiency.
- Receivables Turnover
- The receivables turnover ratio steadily decreased from 26.09 in 2020 to 18.6 in 2024, reaching its lowest point at 16.86 in 2023 before a slight improvement in 2024. The steady decline indicates a lengthening of the time taken to collect receivables, which may suggest relaxed credit policies or collection challenges over the period.
- Payables Turnover
- Payables turnover showed a moderate increase from 3.22 in 2020 to a peak of 3.63 in 2022, followed by a slight decline to 3.46 in 2024. The overall trend points to generally consistent payment practices with minor variations potentially linked to changes in supplier terms or cash management strategies.
- Working Capital Turnover
- Working capital turnover experienced significant fluctuations, dropping sharply from 60.82 in 2020 to 24.33 in 2021, with missing data for 2022. It then surged to 77.32 in 2023 before declining to 55.79 in 2024. This volatility reflects substantial changes in operational efficiency or shifts in working capital management across the years.
- Average Inventory Processing Period
- The average inventory processing period increased from 37 days in 2020 to a peak of 44 days in 2021, then gradually decreased to 38 days by 2024. This suggests initial deceleration in inventory turnover speed followed by improved inventory processing efficiency in recent years.
- Average Receivable Collection Period
- There was a consistent increase in the average receivable collection period from 14 days in 2020 to 22 days in 2023, followed by a slight improvement to 20 days in 2024. This trend indicates a lengthening in the time customers take to pay, potentially reflecting changes in credit policy or customer payment behavior.
- Operating Cycle
- The operating cycle lengthened from 51 days in 2020 to 62 days in 2022 and 2023, before contracting slightly to 58 days in 2024. The initial increase reflects extended periods necessary to convert inventory and receivables into cash, with recent improvement suggesting enhanced operational efficiency.
- Average Payables Payment Period
- The average payables payment period decreased from 113 days in 2020 to 101 days in 2022, then slightly increased to 106 days by 2024. This indicates a trend towards faster payments earlier in the period, followed by a modest extension of payment terms in the later years.
- Cash Conversion Cycle
- The cash conversion cycle was negative throughout the period, increasing from -62 days in 2020 to -39 days in 2022, then stabilizing around -40 to -48 days afterward. The consistently negative values highlight an advantageous position of receiving cash from customers before paying suppliers, although the reduction in the negative magnitude over time points to a slight weakening of this benefit.
Turnover Ratios
Average No. Days
Inventory Turnover
Amazon.com Inc., inventory 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) | ||||||
| Cost of sales | ||||||
| Inventories | ||||||
| Short-term Activity Ratio | ||||||
| Inventory turnover1 | ||||||
| Benchmarks | ||||||
| Inventory Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Inventory Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Inventory Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
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
Inventory turnover = Cost of sales ÷ Inventories
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- The cost of sales has demonstrated a consistent upward trend over the five-year period. From US$233,307 million in 2020, it has increased steadily each year, reaching US$326,288 million by 2024. This growth indicates rising expenses directly related to the production or procurement of goods sold, which could reflect expansion in business volume or increasing input costs.
- Inventories
- Inventories have generally increased from US$23,795 million in 2020 to US$34,214 million in 2024. However, there was a slight decline in 2023 compared to 2022, with inventories decreasing from US$34,405 million to US$33,318 million before rising again in 2024. This fluctuation suggests adjustments in stock management or supply chain factors affecting inventory levels.
- Inventory Turnover Ratio
- The inventory turnover ratio exhibited some variability over the period. Starting at 9.8 in 2020, it decreased notably to 8.34 in 2021, indicating slower inventory movement. The ratio stabilized slightly around 8.4 in 2022, then improved in the subsequent years to 9.15 in 2023 and 9.54 in 2024. The increasing turnover in the latter years points to enhanced efficiency in managing inventory relative to sales.
Receivables Turnover
Amazon.com Inc., receivables turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Customer receivables, net | ||||||
| Short-term Activity Ratio | ||||||
| Receivables turnover1 | ||||||
| Benchmarks | ||||||
| Receivables Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Receivables Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Receivables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
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
Receivables turnover = Net sales ÷ Customer receivables, net
= ÷ =
2 Click competitor name to see calculations.
- Net Sales
- The net sales figures demonstrate a consistent upward trend over the five-year period. Starting at 386,064 million US dollars in 2020, net sales increased each year, reaching 637,959 million US dollars by 2024. This represents significant growth, indicating expanding revenue generation capabilities and potentially larger market demand or increased product offerings.
- Customer Receivables, Net
- Customer receivables also show a steady increase from 14,800 million US dollars in 2020 to 34,300 million US dollars in 2024. The steady rise suggests that the company's credit sales or payment terms may be extending, or customers are taking longer to settle their accounts. This growing receivables balance needs to be monitored closely to manage credit risk and cash flow implications adequately.
- Receivables Turnover Ratio
- The receivables turnover ratio reveals a declining trend from 26.09 in 2020 down to 16.86 in 2023, followed by a slight recovery to 18.6 in 2024. The initial decline indicates slower collection efficiency or lengthening credit terms, which can impact cash flow. The minor improvement in 2024 could suggest some efforts toward better collections or a stabilization in customer payment behaviors. Despite this improvement, the ratio remains notably below the 2020 level, warranting attention to the accounts receivable management practices.
Payables Turnover
Amazon.com Inc., payables 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) | ||||||
| Cost of sales | ||||||
| Accounts payable | ||||||
| Short-term Activity Ratio | ||||||
| Payables turnover1 | ||||||
| Benchmarks | ||||||
| Payables Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Payables Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Payables Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
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
Payables turnover = Cost of sales ÷ Accounts payable
= ÷ =
2 Click competitor name to see calculations.
- Cost of Sales
- There is a consistent upward trend in the cost of sales over the five-year period. The expense increased from $233,307 million in 2020 to $326,288 million in 2024. This represents a significant rise, indicating growing operational expenses, likely due to expanded business activities or increased cost pressures.
- Accounts Payable
- Accounts payable has also shown a steady increase, growing from $72,539 million in 2020 to $94,363 million in 2024. This trend suggests that the company is increasingly utilizing supplier credit or deferring payments as part of its working capital management strategy.
- Payables Turnover Ratio
- The payables turnover ratio exhibits a modest fluctuation within the period. It rose from 3.22 in 2020 to a peak of 3.63 in 2022, before slightly declining to 3.46 in 2024. This indicates that the company initially increased its rate of paying off suppliers but has slowed the pace slightly in recent years, potentially reflecting changes in payment terms or cash flow management policies.
Working Capital Turnover
Amazon.com Inc., working capital turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Current assets | ||||||
| Less: Current liabilities | ||||||
| Working capital | ||||||
| Net sales | ||||||
| Short-term Activity Ratio | ||||||
| Working capital turnover1 | ||||||
| Benchmarks | ||||||
| Working Capital Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Working Capital Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Working Capital Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
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
Working capital turnover = Net sales ÷ Working capital
= ÷ =
2 Click competitor name to see calculations.
- Working Capital
- The working capital experienced considerable fluctuations over the analyzed period. Initially, there was a significant increase from 6,348 million US dollars in 2020 to 19,314 million US dollars in 2021. However, the value dropped sharply to a negative working capital of -8,602 million US dollars in 2022, indicating potential liquidity challenges during that year. Subsequently, the working capital recovered, rising to 7,434 million US dollars in 2023 and further increasing to 11,436 million US dollars in 2024. This pattern suggests volatility in short-term asset and liability management, with a notable setback in 2022 followed by a recovery phase.
- Net Sales
- Net sales displayed a consistent and robust upward trend throughout the period. Starting at 386,064 million US dollars in 2020, net sales increased steadily each year, reaching 469,822 million US dollars in 2021, 513,983 million US dollars in 2022, 574,785 million US dollars in 2023, and 637,959 million US dollars in 2024. This persistent growth reflects strong revenue expansion, potentially driven by increased market demand or operational scale.
- Working Capital Turnover
- The working capital turnover ratio exhibited considerable variation. It declined from a very high 60.82 in 2020 to 24.33 in 2021, which may suggest a reduction in the efficiency of using working capital to generate sales. There is missing data for 2022, yet the ratio rebounded to 77.32 in 2023, indicating a significant improvement in turnover and efficiency in that year. Following this peak, the ratio decreased to 55.79 in 2024, which is still substantially higher than the 2021 figure but below the 2023 peak. These fluctuations imply changing operational dynamics in managing working capital relative to sales.
Average Inventory Processing Period
Amazon.com Inc., average inventory processing period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Inventory turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average inventory processing period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Inventory Processing Period, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Average Inventory Processing Period, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Average Inventory Processing Period, Industry | ||||||
| Consumer Discretionary | ||||||
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
Average inventory processing period = 365 ÷ Inventory turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Inventory Turnover
- The inventory turnover ratio demonstrates a fluctuating yet improving trend over the five-year period. It declined from 9.8 in 2020 to 8.34 in 2021, indicating slower inventory movement during that year. Subsequently, the ratio stabilized around 8.4 in 2022 before showing consistent improvement in the following years, reaching 9.15 in 2023 and further increasing to 9.54 in 2024. This suggests enhanced efficiency in managing and selling inventory in the most recent periods.
- Average Inventory Processing Period
- The average inventory processing period, which measures the number of days inventory remains before being sold, exhibited an inverse pattern relative to the inventory turnover. It increased from 37 days in 2020 to 44 days in 2021, reflecting slower inventory turnover that year. It slightly improved to 43 days in 2022, followed by a more marked reduction to 40 days in 2023 and 38 days in 2024. This indicates a gradual acceleration in inventory processing time, aligning with the upward trend in inventory turnover.
- Overall Trend and Insight
- The data reveal a temporary slowdown in inventory movement during 2021, with reduced turnover and increased days in inventory, potentially due to external market conditions or operational challenges. Since then, there has been a consistent recovery and improvement in inventory management efficiency, as evidenced by rising inventory turnover ratios and decreasing average processing periods. By 2024, the company appears to have optimized its inventory processes, achieving levels close to or surpassing those seen in 2020.
Average Receivable Collection Period
Amazon.com Inc., average receivable collection period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Receivables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average receivable collection period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Receivable Collection Period, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Average Receivable Collection Period, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Average Receivable Collection Period, Industry | ||||||
| Consumer Discretionary | ||||||
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
Average receivable collection period = 365 ÷ Receivables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Receivables Turnover
- The receivables turnover ratio shows a declining trend from 26.09 in 2020 to a low of 16.86 in 2023, indicating a reduction in the frequency with which the company collects its receivables annually. However, there is a slight recovery in 2024, with the ratio increasing to 18.6. This suggests some improvement in collection efficiency after a period of weakening performance.
- Average Receivable Collection Period
- The average collection period has increased consistently from 14 days in 2020 to 22 days in 2023, reflecting longer time taken to collect receivables. There is a minor improvement in 2024, where the collection period reduces to 20 days. This increase over time correspondingly aligns with the decreasing receivables turnover ratio, signaling a slowdown in cash inflows from receivables during most of the period analyzed.
- Overall Analysis
- The overall pattern indicates a trend of declining efficiency in accounts receivable management over several years, with longer durations required to collect outstanding amounts. The partial rebound observed in 2024 could imply an adjustment or corrective actions aimed at improving collection processes. Monitoring this trend is crucial for maintaining liquidity and optimizing working capital management.
Operating Cycle
Amazon.com Inc., operating cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | ||||||
| Average receivable collection period | ||||||
| Short-term Activity Ratio | ||||||
| Operating cycle1 | ||||||
| Benchmarks | ||||||
| Operating Cycle, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Operating Cycle, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Operating Cycle, Industry | ||||||
| Consumer Discretionary | ||||||
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 cycle = Average inventory processing period + Average receivable collection period
= + =
2 Click competitor name to see calculations.
- Inventory Management
- The average inventory processing period experienced an initial increase from 37 days in 2020 to a peak of 44 days in 2021, indicating a lengthening duration in inventory turnover. Following this peak, the period gradually shortened to 38 days by 2024, suggesting improvements in inventory management efficiency or a strategic change in stock levels over the later years.
- Receivables Collection
- The average receivable collection period steadily increased from 14 days in 2020 to a high of 22 days in 2023, implying that it took longer to collect payments over this time frame. A slight improvement is observed in 2024 with a reduction to 20 days; however, the collection period remains noticeably longer than at the outset of the period, which could indicate changes in customer payment behavior or credit policies.
- Operating Cycle
- The operating cycle extended from 51 days in 2020 to 62 days in both 2022 and 2023, reflecting a combined effect of longer inventory processing and receivables collection. In 2024, the operating cycle shortened to 58 days, driven by the improvements in both inventory management and receivables collection periods, although it remains elevated relative to 2020 figures. This trend suggests some recovery in operational efficiency but still indicates a longer cash conversion cycle compared to earlier years.
Average Payables Payment Period
Amazon.com Inc., average payables payment period calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Payables turnover | ||||||
| Short-term Activity Ratio (no. days) | ||||||
| Average payables payment period1 | ||||||
| Benchmarks (no. days) | ||||||
| Average Payables Payment Period, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Average Payables Payment Period, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Average Payables Payment Period, Industry | ||||||
| Consumer Discretionary | ||||||
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
Average payables payment period = 365 ÷ Payables turnover
= 365 ÷ =
2 Click competitor name to see calculations.
- Payables Turnover
- The payables turnover ratio shows a gradual upward trend from 3.22 in 2020 to 3.63 in 2022, indicating an improvement in the company's efficiency in managing and paying off its accounts payable during the initial years. However, after reaching its peak in 2022, the ratio slightly declined to 3.59 in 2023 and further to 3.46 in 2024, suggesting a mild deceleration in the pace at which the company pays its suppliers in the most recent years.
- Average Payables Payment Period
- The average payables payment period decreased steadily from 113 days in 2020 to 101 days in 2022, reflecting a faster payment cycle corresponding to the higher payables turnover ratio in the same period. Post-2022, the average payment period showed a modest increase to 102 days in 2023 and further to 106 days in 2024, indicating a slight lengthening in the time taken to settle payables.
- Overall Trend and Interpretation
- There is a clear inverse relationship between the payables turnover and average payment period over the observed periods. The initial improvement up to 2022 suggests enhanced operational efficiency in managing payables, enabling quicker settlement of obligations. However, the slight reversal from 2023 onwards may indicate either strategic adjustments in cash flow management or changing supplier terms, resulting in somewhat longer payment periods. Despite this, the values remain close to previous levels, suggesting overall stability with minor fluctuations in payable management practices.
Cash Conversion Cycle
Amazon.com Inc., cash conversion cycle calculation, comparison to benchmarks
No. days
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data | ||||||
| Average inventory processing period | ||||||
| Average receivable collection period | ||||||
| Average payables payment period | ||||||
| Short-term Activity Ratio | ||||||
| Cash conversion cycle1 | ||||||
| Benchmarks | ||||||
| Cash Conversion Cycle, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Cash Conversion Cycle, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Cash Conversion Cycle, Industry | ||||||
| Consumer Discretionary | ||||||
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 conversion cycle = Average inventory processing period + Average receivable collection period – Average payables payment period
= + – =
2 Click competitor name to see calculations.
- Average inventory processing period
- The average inventory processing period increased from 37 days in 2020 to a peak of 44 days in 2021, indicating slower inventory turnover that year. Subsequently, this period showed a gradual decline to 38 days by 2024, suggesting improved efficiency in managing inventory after 2021.
- Average receivable collection period
- The average receivable collection period exhibited a consistent upward trend from 14 days in 2020 to 22 days in 2023. In 2024, there was a slight improvement, decreasing to 20 days. This pattern indicates that it took the company longer to collect receivables over most of the period before a modest recovery in the final year.
- Average payables payment period
- The average payables payment period decreased significantly from 113 days in 2020 to 101 days by 2022, reflecting a faster payment approach. However, this trend reversed slightly in 2023 and 2024, with periods extending to 102 and 106 days respectively, indicating a modest lengthening of payment terms in the most recent years.
- Cash conversion cycle
- The cash conversion cycle remained negative throughout the period, moving from -62 days in 2020 to a less negative -39 days in 2022, indicating a lengthening cash conversion cycle. However, it stabilized around -40 days in 2023 before improving to -48 days in 2024. The consistently negative values suggest that the company continued to maintain a strong liquidity position, efficiently managing its working capital by receiving payments from customers before it needed to pay suppliers.