Amazon.com Inc (AMZN)
Financial leverage ratio
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Total assets | US$ in thousands | 527,854,000 | 462,675,000 | 420,549,000 | 321,195,000 | 225,248,000 |
| Total stockholders’ equity | US$ in thousands | 201,875,000 | 146,043,000 | 138,245,000 | 93,404,000 | 62,060,000 |
| Financial leverage ratio | 2.61 | 3.17 | 3.04 | 3.44 | 3.63 |
December 31, 2023 calculation
Financial leverage ratio = Total assets ÷ Total stockholders’ equity
= $527,854,000K ÷ $201,875,000K
= 2.61
The financial leverage ratio for Amazon.com Inc. has shown a decreasing trend over the past five years, declining from 3.63 in 2019 to 2.61 in 2023. This indicates that the company's reliance on debt financing relative to equity has been decreasing. A lower financial leverage ratio suggests a lower level of financial risk and a greater proportion of equity in the company's capital structure.
The improvement in the financial leverage ratio could signify that Amazon.com Inc. has been reducing its debt levels or increasing its equity base, which may have a positive impact on its overall financial stability and solvency. However, it is essential to consider other factors such as the cost of debt and the potential impact on profitability when analyzing changes in the financial leverage ratio. Overall, the decreasing trend in the financial leverage ratio for Amazon.com Inc. suggests a more conservative capital structure over the years.
Peer comparison
Dec 31, 2023