Amazon.com Inc. (NASDAQ:AMZN)

The financial data reveals notable fluctuations and trends over the analyzed periods. Net operating profit after taxes (NOPAT) experienced significant volatility, beginning with a substantial amount in 2020, followed by an increase in 2021. However, 2022 showed a sharp decline, transitioning into a negative territory, which was then reversed with recovery and growth in 2023 and a substantial increase in 2024, reaching the highest value recorded in the dataset.

Cost of capital demonstrated slight variations but remained relatively stable over the years, with values fluctuating narrowly around the 15% mark. This indicates a consistent cost structure for capital financing, with a minor dip in 2022 and a gradual increase back to the highest rate observed in 2024.

Invested capital consistently increased every year, with a steady upward trajectory over the entire period. The capital base more than doubled from 2020 to 2024, reflecting ongoing investments and possibly expansion initiatives.

Economic profit portrays a complex picture. It started positive but modest in 2020 and increased significantly in 2021, suggesting effective value creation above the cost of capital. In 2022, economic profit plunged deeply into negative figures, indicating value destruction during that year. Although there was improvement in 2023, economic profit remained negative, signaling ongoing challenges. By 2024, the economic profit approached breakeven levels, but remained minimal compared to earlier positive years, highlighting a cautious recovery in value generation.

Net Operating Profit After Taxes (NOPAT)

Initial growth from 2020 to 2021, a sharp decline in 2022 to a negative figure, followed by recovery and strong growth through 2023 and 2024.

Cost of Capital

Relatively stable within a narrow range around 15%, with minor decreases and increases but no dramatic shifts over the five-year period.

Invested Capital

Consistent year-on-year increase reflecting expanding asset base or investments, more than doubling from 2020 through 2024.

Economic Profit

Positive and growing in 2020 and 2021, sharply negative in 2022, some recovery yet still negative in 2023, and near breakeven by 2024.

Overall, the data suggests a period of strong profitability and value creation through 2021, followed by a challenging year in 2022 with losses and value destruction. The subsequent years show recovery efforts, with financial metrics indicating growing profitability and capital investment but with economic profit still only marginally positive by 2024. This implies that, despite increased operating performance and capital deployment, the returns relative to cost of capital were under pressure and only beginning to normalize by the final period.

Net Income (Loss)

The net income fluctuated significantly over the five-year period. Beginning at $21,331 million in 2020, there was a substantial increase to $33,364 million in 2021. However, 2022 marked a notable downturn with a net loss of $2,722 million. This negative performance rebounded sharply in the subsequent years, reaching $30,425 million in 2023 and further rising to $59,248 million in 2024. The data indicates a strong recovery and growth trajectory after the loss experienced in 2022.

Net Operating Profit After Taxes (NOPAT)

NOPAT followed a similar pattern to net income, starting at $24,183 million in 2020 and rising to $37,525 million in 2021. It then experienced a sharp decline to a negative $5,619 million in 2022, deeper than the net income loss in the same year, indicating challenges in operating profitability. However, a significant recovery occurred in 2023 with NOPAT increasing to $31,856 million, followed by a strong increase to $58,988 million in 2024. This suggests an improvement in the company's core operational efficiency and profitability in the last two years.

Overall Analysis

The financial results reveal volatility, with a peak in 2021, a pronounced downturn in 2022, and substantial recovery and growth by 2024. The presence of negative figures in 2022 for both net income and NOPAT indicates operational and profitability challenges during that year. The subsequent rebound in 2023 and 2024 demonstrates strong adaptive or strategic measures resulting in enhanced earnings and operating profit, achieving new highs at the end of the evaluated period.

Provision (benefit) for income taxes, net

The net provision for income taxes showed considerable volatility over the observed periods. In 2020 and 2021, the provision increased significantly from 2,863 million USD to 4,791 million USD. However, the year 2022 presented an unusual pattern with a net tax benefit of -3,217 million USD, indicating a reversal or tax benefit situation rather than a conventional tax expense. Subsequently, the provision rose again sharply to 7,120 million USD in 2023 and further to 9,265 million USD in 2024, reflecting a substantial increase in tax obligations or adjustments during these years.

Cash operating taxes

Cash operating taxes exhibited a steadily increasing trend from 3,844 million USD in 2020 to 5,646 million USD in 2021, followed by a more moderate rise to 5,689 million USD in 2022. In 2023, there was a notable surge to 13,583 million USD, nearly doubling the previous year's amount. This upward momentum continued in 2024 with cash operating taxes reaching 14,023 million USD. The substantial increase observed in the last two years suggests significant growth in actual tax payments, potentially correlated with rising taxable income or changes in tax rates and regulations.

Total reported debt & leases

Over the five-year period, total reported debt and leases exhibited an overall increasing trend from 100,504 million US dollars in 2020 to a peak of 154,972 million in 2022. This increase suggests a significant rise in the company's leverage or obligations during these years. However, this peak level of debt was relatively maintained in 2023, with a slight decrease to 154,556 million, followed by a further moderate reduction to 147,838 million in 2024. The slight decline in the last two years might indicate strategic deleveraging or improved debt management efforts.

Stockholders’ equity

Stockholders' equity demonstrated strong and consistent growth throughout the period under review. Starting at 93,404 million US dollars in 2020, equity levels increased markedly year over year, reaching 138,245 million in 2021 and continuing upward to 146,043 million in 2022. This growth accelerated significantly during 2023 and 2024, culminating in a sizable equity base of 285,970 million by the end of 2024. The substantial rise in equity in the final years suggests enhanced retained earnings, possible equity issuances, or asset revaluations, which strengthen the company's net asset position and financial stability.

Invested capital

Invested capital showed a continuous and pronounced increase across the five years. Beginning at 150,160 million US dollars in 2020, it increased substantially to 202,836 million in 2021, then accelerated its upward trajectory to 269,358 million in 2022. The growth sustained momentum through 2023 and 2024, reaching 326,668 million and 375,421 million respectively. This pattern indicates significant expansion in the company's total capital employed in operations, possibly due to investments in long-term assets, acquisitions, or business growth initiatives.

The financial data reveals significant fluctuations in the company's economic profit over the analyzed five-year period. Starting from a positive economic profit of $815 million in 2020, there was a substantial increase to $6,503 million in 2021, indicating a period of strong profitability. However, this trend reversed dramatically in subsequent years, with economic profit turning negative to -$45,267 million in 2022 and -$18,318 million in 2023, before marginally recovering to a near breakeven point with $166 million in 2024.

The invested capital consistently increased throughout the period, more than doubling from $150.16 billion in 2020 to $375.42 billion in 2024. This steady growth in invested capital indicates ongoing investments and potentially expansion efforts within the company.

The economic spread ratio reflects the company's ability to generate returns above its cost of capital. The ratio improved from 0.54% in 2020 to a peak of 3.21% in 2021, aligning with the peak in economic profit. Subsequently, the ratio experienced substantial deterioration, turning deeply negative in 2022 at -16.81%, and remaining negative at -5.61% in 2023. By 2024, the ratio nearly returned to zero at 0.04%, signaling minimal economic spread and suggesting the company barely covered its cost of capital that year.

Economic Profit

Fluctuated from a moderate profit in 2020, peaking in 2021, followed by significant losses in 2022 and 2023, before returning close to breakeven in 2024.

Invested Capital

Demonstrated consistent and substantial growth each year, indicating ongoing capital investments or asset accumulation.

Economic Spread Ratio

Showed positive but low returns in 2020 and 2021, then sharply declined into negative territory in 2022 and 2023, with a recovery close to neutral in 2024.

Overall, the data reflects a period of aggressive investment accompanied by challenging profitability performance, notably in the middle years, with signs of stabilization towards the end of the period under review.

Adjusted net sales

The adjusted net sales exhibit a consistent upward trend over the five-year period. Starting at $387,482 million in 2020, sales increased to $472,241 million in 2021, followed by further growth to $516,083 million in 2022. This upward trajectory continued into 2023 with sales reaching $579,585 million, culminating in $641,635 million in 2024. This steady increase suggests sustained revenue growth each year.

Economic profit

The economic profit displayed a varied pattern across the years. There was a notable increase from $815 million in 2020 to $6,503 million in 2021, indicating improved profitability or value creation during this period. However, the metric then sharply declined to a significant negative value of -$45,267 million in 2022, followed by a lesser but still negative figure of -$18,318 million in 2023. In 2024, economic profit improved slightly to $166 million, near breakeven. This fluctuating pattern suggests increased challenges or costs impacting profitability in the middle years, with some recovery by the final year.

Economic profit margin

The economic profit margin mirrors the pattern seen in economic profit. It grew from a modest 0.21% in 2020 to 1.38% in 2021, indicating enhanced profitability relative to sales. Thereafter, it declined sharply to -8.77% in 2022 and improved to -3.16% in 2023, both negative values reflecting periods of economic loss relative to revenues. By 2024, the margin returned close to zero, reaching 0.03%, suggesting minimal economic profit relative to sales in that year.

Overall Analysis

The data indicates a strong and consistent growth in adjusted net sales over the analyzed period, demonstrating successful revenue expansion. However, economic profit and the associated margin reveal volatility and significant profitability challenges after 2021, with substantial losses in 2022 and 2023. The slight recovery in 2024 hints at potential improvements in operational efficiency or cost management, but profitability remains marginal. The divergence between robust sales growth and fluctuating economic profit underscores the importance of evaluating cost structures, investments, and other underlying factors affecting value creation during these years.