Amazon.com Inc (AMZN)
Liquidity 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 1.06 | 1.09 | 1.10 | 1.07 | 1.05 | 0.98 | 0.95 | 0.92 | 0.94 | 0.94 | 0.95 | 0.96 | 1.14 | 1.12 | 1.20 | 1.05 | 1.05 | 1.11 | 1.18 | 1.08 |
| Quick ratio | 0.87 | 0.87 | 0.88 | 0.87 | 0.84 | 0.74 | 0.70 | 0.69 | 0.72 | 0.68 | 0.68 | 0.71 | 0.91 | 0.87 | 0.99 | 0.85 | 0.86 | 0.88 | 0.97 | 0.84 |
| Cash ratio | 0.56 | 0.55 | 0.56 | 0.56 | 0.53 | 0.44 | 0.43 | 0.44 | 0.45 | 0.42 | 0.43 | 0.48 | 0.68 | 0.64 | 0.76 | 0.63 | 0.67 | 0.67 | 0.76 | 0.62 |
Amazon.com Inc's liquidity ratios have shown some fluctuations over the past few years. The current ratio, which measures the company's ability to cover its short-term liabilities with its current assets, has generally been above 1, indicating that Amazon has had sufficient current assets to meet its current obligations. However, the current ratio started declining from March 31, 2022, reaching its lowest point at 0.92 on March 31, 2023, before gradually increasing to 1.06 by December 31, 2024.
The quick ratio, a more stringent indicator of liquidity that excludes inventory from current assets, has also exhibited variability. It has generally been below 1, which suggests that Amazon may have had difficulty meeting its short-term obligations without relying on inventory. The quick ratio hit its lowest point of 0.68 on June 30, 2022, before recovering slightly to 0.87 by December 31, 2024.
The cash ratio, which is the most conservative liquidity measure as it only considers cash and equivalents against current liabilities, has displayed a similar trend of fluctuation. It decreased from 0.76 on June 30, 2021, to 0.43 on June 30, 2023, before rising to 0.56 by December 31, 2024. This indicates that Amazon had varying levels of cash reserves relative to its short-term liabilities during the period studied.
Overall, while Amazon's current ratio has been relatively stable around 1 in recent years, the quick ratio and cash ratio have shown more variability, suggesting some fluctuations in the company's ability to quickly cover its short-term obligations with liquid assets. It will be important for Amazon to closely monitor and manage its liquidity position to ensure it can meet its financial commitments in a timely manner.
See also:
Additional liquidity measure
| 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 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -22.07 | -13.81 | -13.84 | -9.53 | -15.29 | -22.80 | -19.79 | -21.21 | -36.51 | -4.99 | -8.06 | -10.37 | -23.60 | -22.32 | -25.98 | -27.14 | -39.84 | -27.52 | -25.34 | -12.69 |
The cash conversion cycle of Amazon.com Inc has seen fluctuations over the period from March 31, 2020, to December 31, 2024. The company has managed to maintain a consistently negative cash conversion cycle, indicating efficiency in managing its working capital.
The cycle started at -12.69 days on March 31, 2020, and hit its lowest point at -39.84 days on December 31, 2020, reflecting a substantial improvement in cash conversion efficiency. From there, the cycle gradually decreased to -4.99 days on September 30, 2022, before experiencing fluctuations in subsequent periods.
Overall, the negative values signify that Amazon.com Inc is able to collect cash from its operating cycle before paying its suppliers, resulting in a shorter cash conversion cycle. This efficient management of cash flow suggests that the company can fund its operations and growth without relying heavily on external financing.