Amazon.com Inc (AMZN)
Return on total capital
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) | US$ in thousands | 40,707,000 | -3,572,000 | 39,964,000 | 25,841,000 | 15,588,000 |
| Long-term debt | US$ in thousands | 58,314,000 | 67,150,000 | 48,744,000 | 31,816,000 | 23,414,000 |
| Total stockholders’ equity | US$ in thousands | 201,875,000 | 146,043,000 | 138,245,000 | 93,404,000 | 62,060,000 |
| Return on total capital | 15.65% | -1.68% | 21.37% | 20.64% | 18.24% |
December 31, 2023 calculation
Return on total capital = EBIT ÷ (Long-term debt + Total stockholders’ equity)
= $40,707,000K ÷ ($58,314,000K + $201,875,000K)
= 15.65%
Amazon.com Inc.'s return on total capital has shown fluctuations over the past five years. In 2023, the return on total capital was 14.16%, which represents an improvement from the previous year's 5.74%. However, it is lower than the return seen in 2020 and 2019, which were 18.24% and 17.00%, respectively. The highest return on total capital was in 2020, indicating a strong performance in utilizing total capital efficiently to generate profits.
Overall, Amazon's return on total capital has been relatively healthy, indicating the company's ability to generate earnings in relation to the total capital invested. The increase in 2023 compared to 2022 is a positive sign, but further monitoring will be necessary to assess the sustainability of this improvement over the coming years.
Peer comparison
Dec 31, 2023