2019
Amazon did not experience any shocks in 2019, demonstrating normal development. With $280,522 in annualized recorded revenue in 2019, Amazon showed no big jump compared with 2018 (Amazon, 2020). Massive movements can be seen in the area of sustainable development and research. One of the principal investment areas was funding for solving climate problems. There are no significant changes in assets and equity accounts; the company slightly increased its profit compared to the previous year. As in previous periods, losses do not exceed profits and are within normal limits (Amazon, 2020). By December 2019, Amazon’s debt-to-equity ratio was 2.63, indicating that the company is successfully balancing its own and investment funds.
The current ratio for the period of interest is 1.10, which does not differ much from previous periods, indicating financial stability. The quick ratio is 0.83, demonstrating that the company is liquid and safe to invest in. The return on equity in 2019 amounted to approximately 21 percent, which is an average value for developing companies, and development is proceeding profitably. The net profit margin is slightly more than 4 percent, indicating that the company still has space to grow.
2020
2020 has been a shocking year for the world, and Amazon is no exception. However, the annual income for this period increased dramatically compared to all previous periods and amounts to $386,064 (Amazon, 2021). This year, the company is paying particular attention to ensuring the safety of employees, and the most significant movement of funds can be seen in the measures to combat COVID-19 (Amazon, 2021). There is a significant increase in assets and equity accounts; the company begins to increase profits sharply. The company’s losses this year are minimal; there is positive growth in a percentage ratio of more than 80% (Amazon, 2021). By December 2020, the debt-to-equity ratio was 2.63, corresponding to the previous period, and the balance is preserved. The current ratio dropped to 1.05, also a characteristic indicator showing that stability is maintained. The quick ratio has not changed much; liquidity has been preserved. Return on equity raised to about 27%, indicating an increase in profitability. The net profit margin has increased by about a percentage point, which is not a bad change, but there is still room for future development.
2021
2021 at Amazon was a period of trying to maintain pandemic growth. The organization succeeded in doing so: the reported annual income amounted to almost $470,000 (Amazon, 2022). However, it was not possible to achieve the same high indicators in terms of the ratio of profit and loss (Amazon, 2022). The most significant movement of funds can again be seen in the area of development and innovation. The debt-to-equity ratio fell to 2.04, but this is not such a sharp drop; the company is successfully coping with difficulties. The current ratio rose to 1.14, showing an increase in financial soundness. The quick ratio and return on equity remained almost unchanged with pandemic indicators; the company maintains its resilience. Net profit margin rose to 7 percent – a significant breakthrough; the company is developing rapidly and becoming more attractive to investors.
Summary
Amazon has shown steady growth over the past three years. Pre-pandemic 2019 is characterized by a slight profit increase and stable preservation of other indicators. The sharp jump in growth in 2020 was due to the demand for the service during the COVID-19 pandemic. Nevertheless, in 2021, Amazon managed to maintain and increase its performance, indicating the correct management. Amazon can be called an attractive company to invest in, as it successfully copes with complexities, is clean in its financial statements, and is overgrowing.
References
Amazon. (2020). Annual Report 2019.
Amazon. (2021). Annual Report 2020.
Amazon. (2022). Annual Report 2021. Web.