Business

Amazon.com, Inc. (AMZN)has three reported segments : North America, International, and AWS.

North America

The North America segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through North America-focused online and physical stores. This segment includes export sales from these online stores.

International

The International segment primarily consists of amounts earned from retail sales of consumer products (including from sellers) and advertising and subscription services through internationally-focused online stores. This segment includes export sales from these internationally-focused online stores (including export sales from these online stores to customers in the U.S., Mexico, and Canada), but excludes export sales from our North America-focused online stores.

AWS

The AWS segment consists of amounts earned from global sales of compute, storage, database, and other services for start-ups, enterprises, government agencies, and academic institutions.

Profitability  Analysis

Amazon ‘s total net sales were $469.8 billion, $514 billion and $574.8 billion for 2021, for 2022 and for 2023, respectively.

Amazon’s total net sales were up $44.2 billion or 8.6% to $514 billion in 2022, while Amazon ‘s total net sales were up $60.8 billion or 12% to $574.8 billion in 2023.

The growth of Amazon ‘s total net sales was very slow in the past two years.

North American’s sales were up 13% and 12% in 2022 and in 2023.

International ‘s sales were up -8% and 11% in 2022 and in 2023.

AWS ‘s sales were up 29% and 13% in 2022 and in 2023.

We think that AWS ‘s growth rate is very fast and AWS is the most potential.

The North America ‘s operating income margin was 4.2% in 2023.

The International ‘s operating income was loss in the past two years.

The AWS ‘s operating income margin was 27% in 2023.

The AWS ‘s profitability is the strongest.

Liquidity and Solvency Analysis

Amazon’s total assets were up $65.2 billion or 14% to $527.8 billion as of December 31, 2023, compared with $426.6 billion as of December 31, 2022.

Total current assets were $172.3 billion, and total current liabilities were $165 billion as of December 31, 2023.

The current ratio was 1.04.

The debt ratio was 61.8% , which is not high. But Amazon is an asset-heavy company, property and equipment, net was $204.2 billion as of December 31, 2023, which accounted for 38.7% of total assets.

Amazon’s liquidity is very tight and debt repayment pressure is high. We need to look at its cash flow situation.

Cash Flow Analysis

Amazon’s net cash provided by operating activities was $46.3 billion, $46.7 billion and $85 billion in 2021, in 2022 and in 2023, respectively.

Purchase of property and equipment was $61 billion, $63,6 billion and $52.7 billion in 2021, in 2022 and in 2023, respectively.

The free cash flow was -$14.7 billion, -$16.9 billion and $32.3 billion in 2021, in 2022 and in 2023, respectively.

Amazon’s cash flow is very tight. In addition, shareholders would not expect stock buybacks and dividends.

Summary

Amazon is not going to bankruptcy. Capital expenditures can be reduced when necessary.

Amazon is an asset- heavy company, which required substantial capital expenditure.

Don’t  expect repurchasing stocks and paying dividends to shareholders.

We reckon that Amazon is worth $800 billion or lower. Because capital expenditures are very big. Google and Meta are easy for making money.