Amazon.com Inc (AMZN)

Activity ratios

Short-term

Turnover ratios

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Inventory turnover	11.92	11.07	11.54	12.53	11.63	7.31	6.98	7.36	7.18	9.87	9.21	9.92	10.45	10.59	13.19	12.68	11.85	10.76	12.19	11.81
Receivables turnover	11.49	11.98	12.01	12.30	10.94	12.68	13.40	13.86	12.07	13.82	13.90	14.64	14.23	15.96	16.48	17.20	15.68	16.64	16.10	16.54
Payables turnover	4.32	4.72	4.81	5.34	4.56	3.60	3.67	3.76	3.10	5.34	4.94	5.06	4.34	4.58	4.82	4.73	3.89	4.38	4.68	5.56
Working capital turnover	55.69	43.22	39.77	53.31	76.90	—	—	—	—	—	—	—	24.23	31.41	19.18	69.60	60.62	31.36	18.84	47.03

Inventory Turnover Analysis:

Amazon's inventory turnover has shown a fluctuating trend over the years. It peaked in June 2021 at 13.19 times but has since declined gradually to 11.92 by December 2024. This indicates that the company is selling through its inventory at a slower rate compared to previous periods.

Receivables Turnover Analysis:

The receivables turnover for Amazon has been gradually decreasing from 17.20 in March 2021 to 11.49 in December 2024. This suggests that Amazon is taking longer to collect its accounts receivables, which could potentially impact its cash flow and liquidity.

Payables Turnover Analysis:

Amazon's payables turnover has shown some fluctuations but has been relatively stable over the years. It ranged from a low of 3.10 in December 2022 to a high of 5.56 in March 2020. Generally, a higher payables turnover ratio indicates that the company is managing its trade payables efficiently.

Working Capital Turnover Analysis:

The working capital turnover ratio provides a measure of how well a company effectively manages its working capital. Amazon's working capital turnover ratio has varied significantly, with a peak of 76.90 in December 2023. The ratio dropped to 39.77 by June 2024, indicating a decline in the efficiency of working capital management during that period.

Overall, it is essential for Amazon to closely monitor these activity ratios as they provide valuable insights into the company's operational efficiency and financial health. Improvements in these ratios can lead to better cash flow management and overall profitability for the company.

Average number of days

		Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Days of inventory on hand (DOH)	days	30.63	32.98	31.62	29.13	31.38	49.90	52.32	49.62	50.82	36.97	39.61	36.81	34.93	34.48	27.66	28.77	30.81	33.93	29.94	30.91
Days of sales outstanding (DSO)	days	31.78	30.47	30.38	29.67	33.36	28.78	27.24	26.33	30.24	26.40	26.27	24.93	25.65	22.87	22.15	21.22	23.28	21.93	22.68	22.06
Number of days of payables	days	84.48	77.26	75.84	68.33	80.03	101.48	99.35	97.16	117.57	68.36	73.94	72.11	84.19	79.67	75.80	77.13	93.92	83.38	77.96	65.67

Activity ratios provide insights into how efficiently a company manages its assets and liabilities. Let's analyze the activity ratios of Amazon.com Inc based on the provided data:

1. Days of Inventory on Hand (DOH):
- Amazon's DOH has shown fluctuations over the years, ranging from a low of 27.66 days in June 2021 to a high of 52.32 days in June 2023.
- Higher DOH values indicate that inventory is taking longer to sell, potentially tying up capital.
- The significant increase in DOH in December 2022 and June 2023 might suggest inventory management challenges during those periods.

2. Days of Sales Outstanding (DSO):
- Amazon's DSO has also varied, with levels between 21.22 days in March 2021 and 33.36 days in December 2023.
- Lower DSO values reflect faster collection of receivables, showing efficient credit and collection policies.
- The increase in DSO in December 2023 might indicate a delay in collecting sales proceeds during that period.

3. Number of Days of Payables:
- Amazon's payables period ranged from 65.67 days in March 2020 to 117.57 days in December 2022.
- A longer payables period could indicate favorable financing terms but might also signal strained supplier relationships.
- The significant increase in payables days in December 2022 reflects extended payment terms during that period.

By analyzing these activity ratios, it appears that Amazon has experienced fluctuations in the efficiency of managing its inventory, receivables, and payables over the years. Further examination of trends and industry benchmarks would provide deeper insights into Amazon's working capital management and operational efficiency.

Long-term

	Dec 31, 2024	Sep 30, 2024	Jun 30, 2024	Mar 31, 2024	Dec 31, 2023	Sep 30, 2023	Jun 30, 2023	Mar 31, 2023	Dec 31, 2022	Sep 30, 2022	Jun 30, 2022	Mar 31, 2022	Dec 31, 2021	Sep 30, 2021	Jun 30, 2021	Mar 31, 2021	Dec 31, 2020	Sep 30, 2020	Jun 30, 2020	Mar 31, 2020
Fixed asset turnover	2.52	2.60	2.73	2.80	2.80	2.80	2.76	2.74	2.74	2.82	2.78	2.82	2.92	3.10	3.31	8.01	8.55	3.47	3.71	3.79
Total asset turnover	1.02	1.06	1.08	1.11	1.08	1.13	1.12	1.12	1.11	1.17	1.15	1.16	1.11	1.19	1.23	1.29	1.20	1.23	1.24	1.33

The analysis of Amazon.com Inc's long-term activity ratios reveals a fluctuating trend in both the Fixed Asset Turnover and Total Asset Turnover ratios over the years.

Starting with the Fixed Asset Turnover ratio, we observe a downward trend from 3.79 in March 2020 to 2.52 in December 2024. This indicates that the company's ability to generate sales from its fixed assets has been declining over the period, though there was a significant spike in the ratio in December 2020 and March 2021. This may suggest inefficiencies in the utilization of fixed assets or changes in the asset base of Amazon.

Looking at the Total Asset Turnover ratio, we notice a somewhat inconsistent pattern with a peak of 1.33 in March 2020 followed by a general decrease to 1.02 by December 2024. A lower Total Asset Turnover ratio implies that Amazon is generating fewer sales relative to its total assets, which could be attributed to various factors such as changes in the business model, expansions, or acquisitions.

Overall, the declining trend in both Fixed Asset Turnover and Total Asset Turnover ratios may raise concerns about Amazon's asset utilization efficiency and the effectiveness of its investment in assets to generate revenue. Further analysis and comparison with industry benchmarks would be beneficial to gain more insights into the company's long-term operational performance.