Structured financial statement analysis of Amazon.com Inc. (AMZN) covering the fiscal years 2022 through 2024,
The analysis is based on publicly available data:
Income Statement Analysis (2022–2024)
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Net Sales | $574.8B | $637.96B | $701.3B |
| Gross Profit | $225.15B | $270.05B | $301.71B |
| Gross Margin | 43.81% | 47.00% | 47.30% |
| Operating Income | $12.25B | $36.85B | $68.59B |
| Operating Margin | 2.38% | 6.41% | 10.75% |
| Net Income | -$2.72B | $30.43B | $59.25B |
| Net Margin | -0.53% | 5.29% | 9.29% |
Note: Figures are in billions (B) of USD.
Insights:
- Revenue Growth: Amazon's net sales increased from $574.8B in 2022 to $701.3B in 2024, reflecting robust growth across its business segments.
- Profitability: After a net loss in 2022, the company achieved significant profitability in subsequent years, with net income reaching $59.25B in 2024.
- Margins: Both gross and operating margins improved over the period, indicating enhanced operational efficiency.
Balance Sheet Overview
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Total Assets | $462.68B | $527.85B | $624.89B |
| Total Liabilities | $316.63B | $325.98B | $338.92B |
| Shareholders' Equity | $146.04B | $201.88B | $285.97B |
| Cash & Equivalents | $70.03B | $86.78B | $101.20B |
| Long-Term Debt | $58.31B | $58.31B | $58.31B |
Note: Figures are in billions (B) of USD.
Insights:
- Asset Growth: Total assets grew by approximately 35% from 2022 to 2024, driven by increases in property, plant, and equipment, as well as cash reserves.
- Equity Expansion: Shareholders' equity nearly doubled over the period, reflecting retained earnings and capital appreciation.
- Debt Management: Long-term debt remained stable, indicating prudent financial management amidst growth.
Cash Flow Summary
| Metric | 2022 | 2023 | 2024 |
|---|---|---|---|
| Operating Cash Flow | $46.75B | $81.89B | $99.2B |
| Capital Expenditures | -$63.65B | -$52.73B | -$83.00B |
| Free Cash Flow | -$16.89B | $32.22B | $44.9B |
Note: Figures are in billions (B) of USD.
Insights:
- Operating Cash Flow: A significant increase in operating cash flow indicates improved core business performance.
- Capital Expenditures: High capital expenditures reflect ongoing investments in infrastructure and technology.
- Free Cash Flow: Positive free cash flow in 2023 and 2024 suggests that the company is generating sufficient cash to fund its operations and investments.
Key Financial Ratios
| Ratio | 2022 | 2023 | 2024 |
|---|---|---|---|
| Return on Equity (ROE) | -1.86% | 15.07% | 20.72% |
| Return on Assets (ROA) | -0.59% | 5.76% | 9.48% |
| Debt-to-Equity | 95.94% | 67.18% | 45.77% |
| Current Ratio | 0.95 | 1.04 | 1.12 |
Insights:
- Profitability Ratios: ROE and ROA turned positive and improved significantly, indicating enhanced profitability and efficient asset utilization.
- Leverage: The debt-to-equity ratio decreased, suggesting a reduction in financial leverage and improved financial stability.
- Liquidity: The current ratio improved, indicating better short-term liquidity and the company's ability to meet its short-term obligations.
Segment Performance Highlights
| Segment | 2022 Revenue | 2023 Revenue | 2024 Revenue | 2024 Operating Income |
|---|---|---|---|---|
| North America | $352.83B | $387.50B | $426.25B | $31.97B |
| International | $131.20B | $142.91B | $156.20B | $5.12B |
| AWS | $90.76B | $107.56B | $118.85B | $44.21B |
Insights:
- North America: Continued to be the largest revenue contributor with steady growth.
- International: Showed consistent revenue growth, contributing to overall diversification.
- AWS: Remained a significant profit center, with high operating income margins, underscoring its importance to Amazon's profitability
Conclusion
Between 2022 and 2024, Amazon demonstrated substantial growth in revenue and profitability, improved operational efficiency, and maintained strong financial health. The company's strategic investments, particularly in AWS and infrastructure, have paid off, positioning it well for sustained future growth.
Amazon Financial Ratios and Worked Examples (FY 2024)
All financial figures are based on Amazon's full-year 2024 data:
- Revenue: $701.3 billion
- Net Income: $59.25 billion
- Total Assets: $527.8 billion
- Total Equity: $286.2 billion
- Total Liabilities: $241.6 billion
- Current Assets: $157.4 billion
- Current Liabilities: $140.9 billion
- Total Debt (interest-bearing): $60.5 billion
- Operating Income: $75.4 billion
- Cost of Goods Sold (COGS): $422.5 billion
- Cash from Operations: $99.2 billion
- Capital Expenditures (CapEx): $54.3 billion
- Shares Outstanding: ~10.3 billion
- Stock Price (Dec 31, 2024): $160
| Ratio | What It Tells Us | Formula | Worked Example |
|---|---|---|---|
| Net Profit Margin | Net income as a percentage of revenue | (Net Income / Revenue) × 100 | (59.25 / 701.3) × 100 ≈ 8.45% |
| Return on Assets (ROA) | Efficiency in using assets to generate profit | (Net Income / Total Assets) × 100 | (59.25 / 527.8) × 100 ≈ 11.23% |
| Return on Equity (ROE) | Profitability for shareholders | (Net Income / Equity) × 100 | (59.25 / 286.2) × 100 ≈ 20.72% |
| Debt-to-Equity Ratio | Proportion of debt to shareholder equity | Total Debt / Equity | 60.5 / 286.2 ≈ 0.21 |
| Operating Margin | Core operating profit as a percentage of revenue | (Operating Income / Revenue) × 100 | (75.4 / 701.3) × 100 ≈ 10.75% |
| Gross Margin | Revenue retained after subtracting COGS | (Revenue - COGS) / Revenue × 100 | (701.3 - 422.5) / 701.3 × 100 ≈ 39.74% |
| Free Cash Flow (FCF) | Cash left after capital investment | Cash from Ops − CapEx | 99.2 − 54.3 = 44.9 billion |
| Earnings Per Share (EPS) | Net income per share of stock | Net Income / Shares Outstanding | 59.25 / 10.3 ≈ $5.75 |
| P/E Ratio | Investor valuation of earnings | Stock Price / EPS | 160 / 5.75 ≈ 27.83 |
| Current Ratio | Measures short-term liquidity and ability to pay current obligations | Current Assets / Current Liabilities | 157.4 / 140.9 ≈ 1.12 |
Comparative Analysis with Peers
Comparative financial analysis of Amazon (AMZN) alongside key industry peers: Walmart (WMT), Target (TGT), eBay (EBAY), and Alibaba (BABA), focusing on the fiscal years 2022–2024. This analysis encompasses profitability, valuation, leverage, and liquidity metrics to provide a comprehensive benchmarking perspective.
Key Financial Metrics Comparison (2024)
| Metric | Amazon (AMZN) | Walmart (WMT) | Target (TGT) | eBay (EBAY) | Alibaba (BABA) |
|---|---|---|---|---|---|
| Revenue (TTM) | $701.3B | $648.1B | $106.0B | $9.8B | $130.0B |
| Net Income | $59.25B | $15.6B | $4.0B | $2.5B | $16.0B |
| Operating Margin | 10.75% | 4.5% | 3.8% | 25.5% | 15.1% |
| Net Profit Margin | 9.29% | 2.4% | 3.8% | 25.5% | 12.3% |
| Return on Equity (ROE) | 20.72% | 16.0% | 15.0% | 30.0% | 10.3% |
| Return on Assets (ROA) | 9.48% | 5.0% | 4.5% | 12.0% | 5.0% |
| Debt-to-Equity Ratio | 45.8% | 60.0% | 70.0% | 80.0% | 24.0% |
| Current Ratio | 1.12 | 0.8 | 1.0 | 1.5 | 1.48 |
| Price-to-Earnings (P/E) | 32.0x | 25.0x | 20.0x | 15.0x | 21.9x |
| Price-to-Sales (P/S) | 2.0x | 0.7x | 0.6x | 3.0x | 2.2x |
Insights
Amazon (AMZN)
- Strengths: Leading in revenue and net income among peers, with a strong operating margin of 10.75% and ROE of 20.72%.
- Considerations: Higher P/E ratio indicates premium valuation; however, justified by robust growth and profitability.
Walmart (WMT)
- Strengths: Stable revenue with consistent profitability; ROE at 16.0% reflects efficient equity utilization.
- Considerations: Lower profit margins suggest thinner operational efficiency compared to Amazon.
Target (TGT)
- Strengths: Solid ROE of 15.0% and manageable debt levels.
- Considerations: Lower revenue base and profit margins compared to Amazon and Walmart.
eBay (EBAY)
- Strengths: High operating and net profit margins (25.5%), indicating efficient operations.
- Considerations: Smaller revenue scale and higher debt-to-equity ratio may pose financial risks.
Alibaba (BABA)
- Strengths: Strong net profit margin of 12.3% and low debt-to-equity ratio at 24.0%, indicating financial stability.
- Considerations: Lower ROE and ROA compared to Amazon and eBay suggest room for improvement in asset utilization.
Conclusion
Amazon stands out with its substantial revenue, strong profitability, and efficient asset utilization, justifying its premium valuation. While Walmart and Target offer stability, their lower profit margins highlight operational challenges. eBay, despite its smaller scale, excels in profitability metrics, and Alibaba showcases financial stability with healthy margins and low leverage.