Amazon.com Inc (AMZN)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 32.16% | 27.22% | 27.12% | 26.68% | 24.25% |
| Operating profit margin | 6.45% | 2.40% | 5.32% | 5.96% | 5.21% |
| Pretax margin | 6.56% | -1.16% | 8.15% | 6.29% | 5.02% |
| Net profit margin | 5.32% | -0.53% | 7.13% | 5.55% | 4.15% |
Amazon.com Inc. has shown a consistent improvement in its profitability ratios over the past five years.
The gross profit margin has increased steadily from 40.99% in 2019 to 46.98% in 2023. This indicates that the company has been able to effectively manage its cost of goods sold and generate more profit from its sales.
The operating profit margin has also shown a marked improvement, increasing from 5.18% in 2019 to 6.41% in 2023. This suggests that Amazon has been able to control its operating expenses and improve its operational efficiency.
The pretax margin has fluctuated over the years but has shown an overall positive trend, reaching 6.53% in 2023. This indicates that the company has been able to generate more profit before taxes as a percentage of its total revenue.
The net profit margin has demonstrated a significant improvement, moving from 4.13% in 2019 to 5.29% in 2023. This suggests that Amazon has been successful in managing its overall expenses and increasing its bottom line profitability.
Overall, the improving trend in profitability ratios reflects Amazon's ability to grow its revenue while effectively managing its costs and expenses, ultimately leading to increased profitability.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 6.98% | 2.65% | 5.92% | 7.13% | 6.46% |
| Return on assets (ROA) | 5.76% | -0.59% | 7.93% | 6.64% | 5.14% |
| Return on total capital | 15.65% | -1.68% | 21.37% | 20.64% | 18.24% |
| Return on equity (ROE) | 15.07% | -1.86% | 24.13% | 22.84% | 18.67% |
Amazon.com Inc.'s profitability ratios show some fluctuations over the past five years. The Operating return on assets (Operating ROA) has been inconsistent, ranging from 2.65% in 2022 to 7.11% in 2020, with a moderate increase to 6.98% in 2023. The Return on assets (ROA) also displayed variability, with a negative figure of -0.59% in 2022, a substantial increase to 7.93% in 2021, and a decrease to 5.76% in 2023.
In terms of Return on total capital, 2020 saw the highest figure at 18.24%, followed by a decline to 14.16% in 2023. Additionally, the Return on equity (ROE) was negative at -1.86% in 2022, with a notable increase to 24.13% in 2021, and a subsequent decrease to 15.07% in 2023.
Overall, the profitability ratios of Amazon.com Inc. exhibit some volatility, indicating variations in the company's ability to generate profits relative to assets, capital, and equity over the past five years. This highlights the importance of consistent performance and effective management of resources to sustain and enhance profitability in the long term.