Amazon.com Inc (AMZN)

Fixed asset turnover

		Dec 31, 2024	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020
Revenue	US$ in thousands	637,551,000	571,668,000	511,276,000	467,958,000	384,452,000
Property, plant and equipment	US$ in thousands	252,665,000	204,177,000	186,715,000	160,281,000	45,014,000
Fixed asset turnover		2.52	2.80	2.74	2.92	8.54

December 31, 2024 calculation

Fixed asset turnover = Revenue ÷ Property, plant and equipment
= $637,551,000K ÷ $252,665,000K
= 2.52

The fixed asset turnover ratio measures how efficiently a company utilizes its fixed assets to generate revenue. For Amazon.com Inc, the fixed asset turnover ratio declined from 8.54 in December 2020 to 2.92 in December 2021, indicating a significant decrease in the company's ability to generate sales from its fixed assets. This decline could suggest either an increase in the value of fixed assets without a corresponding increase in revenue or a decrease in revenue generation efficiency.

In the subsequent years, the trend continued with the fixed asset turnover ratio further decreasing to 2.74 in December 2022, 2.80 in December 2023, and 2.52 in December 2024. These decreasing values indicate that Amazon.com Inc's fixed assets are being less effectively utilized to generate sales over time. A declining fixed asset turnover ratio may suggest excess capacity in fixed assets, inefficient asset utilization, or an imbalance between asset investments and revenue generation.

Overall, the declining trend in Amazon.com Inc's fixed asset turnover ratio over the years raises potential concerns about the company's operational efficiency and highlights the need for a closer examination of its asset management strategies to improve asset utilization and optimize revenue generation from fixed assets.