Amazon.com Inc (AMZN)
Liquidity ratios
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Current ratio | 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 | 1.10 | 1.10 | 1.10 | 1.09 |
| Quick ratio | 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 | 0.86 | 0.84 | 0.84 | 0.83 |
| Cash ratio | 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 | 0.63 | 0.60 | 0.60 | 0.58 |
The liquidity ratios of Amazon.com Inc. provide insights into the company's ability to meet its short-term financial obligations.
1. Current ratio: This ratio measures the company's ability to pay its short-term liabilities with its short-term assets. Amazon's current ratio has been fluctuating over the quarters, ranging from 0.92 to 1.05, with the Q4 2023 ratio at 1.05. The current ratio above 1 indicates that the company has more current assets than current liabilities, which is a positive sign for short-term liquidity.
2. Quick ratio: The quick ratio, also known as the acid-test ratio, is a more stringent measure of liquidity as it excludes inventory from current assets. Amazon's quick ratio has also varied over the quarters, with the Q4 2023 ratio at 0.84. A quick ratio below 1 suggests that the company may have difficulty meeting its short-term obligations without relying on inventory sales.
3. Cash ratio: The cash ratio indicates the proportion of a company's current assets held in cash or cash equivalents. Amazon's cash ratio has been relatively stable over the quarters, with the Q4 2023 ratio at 0.53. A cash ratio of 0.53 implies that Amazon has sufficient cash on hand to cover 53% of its current liabilities.
Overall, while Amazon's current ratio indicates short-term solvency, the quick and cash ratios suggest a lower level of immediate liquidity. It is important for investors and stakeholders to monitor these liquidity ratios to assess Amazon's ability to meet its financial obligations in a timely manner.
See also:
Amazon.com Inc Liquidity Ratios (Quarterly Data)
Additional liquidity measure
| 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 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Cash conversion cycle | days | -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 | -19.42 | -8.96 | -11.12 | -8.72 |
The cash conversion cycle of Amazon.com Inc. has varied over the past eight quarters, as per the data provided. The company's cash conversion cycle represents the time it takes for Amazon to convert its investments in inventory and other resources into cash flows from sales.
Looking at the data, Amazon's cash conversion cycle has been predominantly negative, indicating that the company is efficient in managing its working capital and generating cash from its operations. For Q4 2023, the cash conversion cycle was -28.70 days, showing that Amazon was able to convert its investments into cash in less than a month.
Overall, the trend has been mostly favorable over the quarters, with fluctuations in the values. The lowest cash conversion cycle was recorded in Q2 2023 at -13.88 days, suggesting a peak in efficiency during that period.
Based on the data provided, it can be inferred that Amazon has been effective in managing its working capital and turning its investments into cash relatively quickly. This efficient cash conversion cycle is indicative of the company's strong operational performance and robust financial management.