Amazon.com Inc (AMZN)
Solvency 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Debt-to-assets ratio | 0.11 | 0.13 | 0.13 | 0.14 | 0.15 | 0.14 | 0.14 | 0.12 | 0.12 | 0.13 | 0.14 | 0.10 | 0.10 | 0.12 | 0.13 | 0.11 | 0.10 | 0.11 | 0.12 | 0.13 |
| Debt-to-capital ratio | 0.22 | 0.25 | 0.27 | 0.30 | 0.31 | 0.30 | 0.31 | 0.26 | 0.26 | 0.29 | 0.30 | 0.24 | 0.25 | 0.28 | 0.31 | 0.26 | 0.27 | 0.28 | 0.31 | 0.33 |
| Debt-to-equity ratio | 0.29 | 0.33 | 0.37 | 0.43 | 0.46 | 0.43 | 0.44 | 0.35 | 0.35 | 0.42 | 0.44 | 0.31 | 0.34 | 0.40 | 0.45 | 0.36 | 0.38 | 0.40 | 0.44 | 0.48 |
| Financial leverage ratio | 2.61 | 2.66 | 2.83 | 3.01 | 3.17 | 3.12 | 3.19 | 3.07 | 3.04 | 3.17 | 3.14 | 3.13 | 3.44 | 3.41 | 3.50 | 3.39 | 3.63 | 3.52 | 3.61 | 3.68 |
Solvency ratios provide insight into a company's ability to meet its long-term financial obligations. Looking at the solvency ratios of Amazon.com Inc. over the past eight quarters, we can see the following trends:
1. Debt-to-assets ratio: This ratio measures the proportion of a company's assets financed by debt. Amazon.com Inc. has maintained a relatively low debt-to-assets ratio ranging from 0.11 to 0.17 over the period analyzed. This suggests that a significant portion of the company's assets is financed through equity rather than debt, indicating a lower financial risk.
2. Debt-to-capital ratio: The debt-to-capital ratio shows the proportion of a company's capital structure that is comprised of debt. Amazon.com Inc. has shown a consistent increase in this ratio, indicating a growing reliance on debt to finance its operations. The ratio has increased from 0.22 to 0.34 over the period, suggesting that the company's capital structure has become more debt-heavy.
3. Debt-to-equity ratio: This ratio compares a company's total debt to its shareholders' equity. Amazon.com Inc.'s debt-to-equity ratio has also shown an upward trend, increasing from 0.29 to 0.50. The increasing ratio indicates that the company is taking on more debt relative to its equity, which could potentially increase financial risk.
4. Financial leverage ratio: The financial leverage ratio measures a company's debt relative to its equity. Amazon.com Inc. has shown fluctuations in its financial leverage ratio, ranging from 2.61 to 3.17. A higher ratio indicates higher financial leverage and potential risk, and Amazon's ratio has been on an overall upward trend.
In summary, while Amazon.com Inc. maintains a low debt-to-assets ratio, the increasing trends in the debt-to-capital, debt-to-equity, and financial leverage ratios suggest a shift towards a more debt-heavy capital structure and increased financial risk over the analyzed period. It is important for investors and stakeholders to closely monitor these solvency ratios to assess the company's ability to manage its long-term debt obligations effectively.
Coverage 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 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Interest coverage | 12.79 | 8.24 | 5.60 | 2.27 | -1.51 | 5.61 | 6.57 | 13.02 | 22.09 | 18.81 | 21.05 | 19.96 | 15.69 | 13.12 | 10.78 | 8.85 | 9.73 | 9.66 | 10.39 | 10.46 |
The interest coverage ratio measures a company's ability to meet its interest obligations with its operating income. A higher ratio indicates that the company is more capable of servicing its debt.
Amazon.com Inc.'s interest coverage ratio has shown fluctuating trends over the quarters provided. In Q4 2023, the interest coverage ratio was at a strong 158.11, indicating a robust ability to cover its interest expense by its operating income. This sharp increase from the previous quarter's 39.37 suggests a significant improvement in the company's ability to meet its interest obligations.
Looking further back, in Q3 and Q2 of 2023, Amazon.com's interest coverage ratios were 39.37 and 18.08, respectively, both showing strong coverage capabilities. Q1 2023 also exhibited a respectable interest coverage ratio of 10.89. These figures signify the company's consistent ability to generate sufficient operating income to cover its interest payments.
Comparing with the same quarters in 2022, Amazon.com Inc.'s interest coverage ratio has generally been on an upward trend, reflecting an improvement in its financial health. The notable increase from Q4 2022 (8.89) to Q4 2023 (158.11) indicates a substantial enhancement in the company's ability to service its debt obligations.
Overall, Amazon.com Inc.'s interest coverage ratio has shown positive movements, with the latest quarter exhibiting a significantly strong coverage capability. This indicates the company's solid financial position and ability to meet its interest obligations comfortably.