Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
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Long-term Activity Ratios (Summary)
Amazon.com Inc., long-term (investment) activity ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Net fixed asset turnover | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset) | ||||||
| Total asset turnover | ||||||
| Equity turnover |
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
An examination of long-term investment activity ratios reveals consistent declines across several key metrics between 2021 and 2025. These trends suggest a decreasing efficiency in utilizing assets to generate revenue.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio decreased from 2.93 in 2021 to 2.01 in 2025. This indicates a diminishing ability to generate sales from fixed asset investments over the period. The rate of decline appears to be accelerating, with a more pronounced decrease from 2023 to 2025.
- Net Fixed Asset Turnover (Including Operating Lease, Right-of-Use Asset)
- Including operating leases and right-of-use assets, the turnover ratio also demonstrates a downward trend, moving from 2.17 in 2021 to 1.62 in 2025. While lower than the standard net fixed asset turnover, this metric mirrors the overall trend of decreasing efficiency when considering total fixed asset commitments. The decline is consistent year-over-year, though also appears to be accelerating in the later years.
- Total Asset Turnover
- The total asset turnover ratio experienced a decline from 1.12 in 2021 to 0.88 in 2025. This suggests a reduced ability to generate sales from the company’s entire asset base. The decrease is gradual through 2023, but becomes more significant in 2024 and 2025.
- Equity Turnover
- The equity turnover ratio shows the most substantial decrease, falling from 3.40 in 2021 to 1.74 in 2025. This indicates a significant reduction in sales generated per dollar of equity. The decline is consistent and accelerating, suggesting a weakening relationship between equity financing and revenue generation.
Collectively, these ratios point to a consistent and intensifying trend of decreasing asset utilization efficiency. The accelerating declines in the later years of the period warrant further investigation to determine the underlying causes and potential implications for future performance.
Net Fixed Asset Turnover
Amazon.com Inc., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Property and equipment, net | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Net Fixed Asset Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Net Fixed Asset Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover = Net sales ÷ Property and equipment, net
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio demonstrates a declining trend over the five-year period. While net sales consistently increased, the growth in property and equipment, net, outpaced sales growth, resulting in a decreasing ratio.
- Net Sales
- Net sales exhibited a consistent upward trajectory, increasing from US$469,822 million in 2021 to US$716,924 million in 2025. This indicates a sustained growth in revenue generation.
- Property and Equipment, Net
- Property and equipment, net, also increased steadily throughout the period, rising from US$160,281 million in 2021 to US$357,025 million in 2025. However, the rate of increase in net fixed assets accelerated, particularly between 2023 and 2025.
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio began at 2.93 in 2021. It decreased to 2.75 in 2022, experienced a slight recovery to 2.82 in 2023, and then continued its decline, reaching 2.52 in 2024 and 2.01 in 2025. This suggests a diminishing efficiency in generating sales from its fixed asset base. The substantial drop in 2025 is particularly noteworthy, indicating a significant increase in investment in fixed assets relative to the sales generated.
The observed trend suggests that the company is investing heavily in property and equipment. While increased investment can support future growth, the declining net fixed asset turnover ratio indicates that the current fixed asset base is becoming less efficient at generating revenue. Further investigation into the nature of these investments and their expected returns would be beneficial.
Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Amazon.com Inc., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Property and equipment, net | ||||||
| Operating leases | ||||||
| Property and equipment, net (including operating lease, right-of-use asset) | ||||||
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | ||||||
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property and equipment, net (including operating lease, right-of-use asset)
= ÷ =
2 Click competitor name to see calculations.
The net fixed asset turnover ratio, alongside its component figures of net sales and net property, plant, and equipment (including operating leases and right-of-use assets), exhibits a discernible pattern over the five-year period. Net sales demonstrate consistent growth annually, increasing from US$469,822 million in 2021 to US$716,924 million in 2025. Simultaneously, net property, plant, and equipment have also increased each year, albeit at a varying rate, rising from US$216,363 million in 2021 to US$443,079 million in 2025.
- Net Sales Trend
- Net sales experienced robust growth throughout the period, with the largest absolute increase occurring between 2023 and 2024 (US$63,174 million). The rate of growth appears to be accelerating, with larger year-over-year increases in later periods.
- Net Fixed Asset Trend
- The growth in net property, plant, and equipment was substantial, particularly between 2024 and 2025 (US$114,273 million). This suggests significant investment in fixed assets during that period. The increase in fixed assets outpaced the increase in sales in 2025, contributing to the decline in the turnover ratio.
- Net Fixed Asset Turnover Ratio Trend
- The net fixed asset turnover ratio initially decreased from 2.17 in 2021 to 2.03 in 2022, then showed a slight recovery to 2.08 in 2023. However, a more pronounced downward trend is observed in subsequent years, with the ratio declining to 1.94 in 2024 and further to 1.62 in 2025. This indicates that the company is generating less sales revenue for each dollar invested in fixed assets. The accelerating growth of fixed assets relative to sales is the primary driver of this decline.
The decreasing net fixed asset turnover ratio warrants further investigation. While increased investment in fixed assets can support future growth, the current trend suggests diminishing returns on those investments, at least in the short term. Potential factors contributing to this trend could include inefficiencies in asset utilization, over-investment in capacity, or a shift in business strategy requiring more capital-intensive operations.
Total Asset Turnover
Amazon.com Inc., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Total assets | ||||||
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | ||||||
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Total Asset Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Total Asset Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Total asset turnover = Net sales ÷ Total assets
= ÷ =
2 Click competitor name to see calculations.
The total asset turnover ratio demonstrates a declining trend over the five-year period. Initially, the ratio stood at 1.12 in 2021, and subsequently decreased to 0.88 in 2025.
- Net Sales Trend
- Net sales exhibited consistent growth throughout the period, increasing from US$469,822 million in 2021 to US$716,924 million in 2025. This indicates increasing revenue generation.
- Total Assets Trend
- Total assets also increased consistently, rising from US$420,549 million in 2021 to US$818,042 million in 2025. However, the growth in assets outpaced the growth in net sales.
- Total Asset Turnover Analysis
- The observed decline in the total asset turnover ratio, despite increasing net sales, suggests a decreasing efficiency in utilizing assets to generate revenue. From 2021 to 2023, the decrease was gradual, moving from 1.12 to 1.09. The rate of decline accelerated between 2023 and 2025, with the ratio falling to 0.88. This implies that a larger asset base is now required to generate each dollar of revenue.
- The ratio’s movement indicates a potential shift in operational strategy, possibly involving investments in long-term assets that do not immediately contribute to sales, or an accumulation of less productive assets. Further investigation into the composition of asset growth is warranted to understand the underlying drivers of this trend.
In summary, while the company demonstrates revenue growth, its ability to efficiently convert assets into sales is diminishing. The accelerating decline in the total asset turnover ratio from 2023 to 2025 warrants further scrutiny.
Equity Turnover
Amazon.com Inc., equity turnover calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | ||||||
| Stockholders’ equity | ||||||
| Long-term Activity Ratio | ||||||
| Equity turnover1 | ||||||
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Home Depot Inc. | ||||||
| Lowe’s Cos. Inc. | ||||||
| TJX Cos. Inc. | ||||||
| Equity Turnover, Sector | ||||||
| Consumer Discretionary Distribution & Retail | ||||||
| Equity Turnover, Industry | ||||||
| Consumer Discretionary | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Equity turnover = Net sales ÷ Stockholders’ equity
= ÷ =
2 Click competitor name to see calculations.
An examination of the provided financial information reveals a declining trend in equity turnover over the five-year period. While net sales consistently increased, the rate at which stockholders’ equity is being used to generate those sales has decreased.
- Equity Turnover
- The equity turnover ratio decreased from 3.40 in 2021 to 1.74 in 2025. This indicates a diminishing efficiency in utilizing equity financing to support sales generation. The most significant decline occurred between 2022 and 2023, dropping from 3.52 to 2.85, and continued with further reductions in subsequent years.
Net sales exhibited consistent growth throughout the period, increasing from US$469,822 million in 2021 to US$716,924 million in 2025. However, this growth in sales was accompanied by a substantial increase in stockholders’ equity, rising from US$138,245 million in 2021 to US$411,065 million in 2025. The disproportionate growth in equity, relative to sales, is the primary driver of the declining equity turnover ratio.
- Relationship between Net Sales and Stockholders’ Equity
- The increasing stockholders’ equity suggests potential reinvestment of earnings, share issuances, or other equity-increasing activities. While increased equity can provide financial flexibility, the decreasing equity turnover suggests that these increases are not immediately translating into proportional sales growth. This could indicate a shift in investment strategy, a period of slower asset utilization, or potentially, an accumulation of equity without corresponding operational efficiency gains.
The observed trend warrants further investigation to understand the underlying reasons for the declining equity turnover. Analyzing the components of equity and the specific investments being made with those funds would provide a more comprehensive understanding of this dynamic.