Amazon Bonds

AMZN -  USA Stock  

USD 3,488  12.45  0.36%

Amazon's financial leverage is the degree to which the firm utilizes its fixed-income securities and uses equity to finance projects. Companies with high leverage are usually considered to be at financial risk. Amazon's financial risk is the risk to Amazon stockholders that is caused by an increase in debt. In other words, with a high degree of financial leverage come high-interest payments, which usually reduce Earnings Per Share (EPS).
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Amazon Total Debt is quite stable at the moment as compared to the past year. The company's current value of Total Debt is estimated at 91.05 Billion. Debt Non Current is expected to rise to about 91.1 B this year, although the value of Issuance Repayment of Debt Securities will most likely fall to (1.2 B).

Amazon Current Financial Burden

Amazon's liquidity is one of the most fundamental aspects of both its future profitability and its ability to meet different types of ongoing financial obligations. Amazon's cash, liquid assets, total liabilities, and shareholder equity can be utilized to evaluate how much leverage the company is using to sustain its current operations. For traders, higher-leverage indicators usually imply a higher risk to shareholders. In addition, it helps Amazon Stock's retail investors understand whether an upcoming fall or rise in the market will negatively affect Amazon's stakeholders.

Asset vs Debt

Equity vs Debt

For most companies, including Amazon, marketable securities, inventories, and receivables are the most common assets that could be converted to cash. However, for the executing running Amazon Inc the most critical issue when dealing with liquidity needs is whether the current assets are properly aligned with its current liabilities. If not, management will need to obtain alternative financing to ensure that there are always enough cash equivalents on the balance sheet in reserve to pay for obligations.
Given that Amazon's debt-to-equity ratio measures a company's obligations relative to the value of its net assets, it is usually used by traders to estimate the extent to which Amazon is acquiring new debt as a mechanism of leveraging its assets. A high debt-to-equity ratio is generally associated with increased risk, implying that it has been aggressive in financing its growth with debt. Another way to look at debt-to-equity ratios is to compare the overall debt load of Amazon to its assets or equity, showing how much of the company assets belong to shareholders vs. creditors. If shareholders own more assets, Amazon is said to be less leveraged. If creditors hold a majority of Amazon's assets, the company is said to be highly leveraged.

Amazon Quarterly Debt to Equity Ratio

2.139Share
Given the importance of Amazon's capital structure, the first step in the capital decision process is for the management of Amazon to decide how much external capital it will need to raise to operate in a sustainable way. Once the amount of financing is determined, management needs to examine the financial markets to determine the terms in which the company can boost capital. This move is crucial to the process because the market environment may reduce the ability of Amazon Inc to issue bonds at a reasonable cost.

Amazon Bond Ratings

Amazon Inc bond ratings play a critical role in determining how much Amazon have to pay to access credit markets, i.e., the amount of interest on their issued debt. The threshold between investment-grade and speculative-grade ratings has important market implications for Amazon's borrowing costs.
Overall Bond Rating
Good
Average S&P Rating
BBB+
Piotroski F Score
5  Healthy
Beneish M Score

Amazon Inc Debt to Cash Allocation

As Amazon Inc follows its natural business cycle, the capital allocation decisions will not magically go away. Amazon's decision-makers have to determine if most of the cash flows will be poured back into or reinvested in the business, reserved for other projects beyond operational needs, or paid back to stakeholders and investors. Many companies eventually find out that there is only so much market out there to be conquered, and adding the next product or service is only half as profitable per unit as their current endeavors. Eventually, the company will reach a point where cash flows are strong, and extra cash is available but not fully utilized. In this case, the company may start buying back its stock from the public or issue more dividends.
The company currently holds 101.52 B in liabilities with Debt to Equity (D/E) ratio of 0.98, which is about average as compared to similar companies. Amazon Inc has a current ratio of 1.03, suggesting that it is in a questionable position to pay out its financial obligations when due.

Amazon Inventories Over Time

Amazon Assets Financed by Debt

The debt-to-assets ratio shows the degree to which Amazon uses debt to finance its assets. It includes both long-term and short-term borrowings maturing within one year. It also includes both tangible and intangible assets, such as goodwill.

Amazon Debt Ratio

    
  26.27   
It seems most of the Amazon's assets are financed through equity. Typically, companies with high debt-to-asset ratios are said to be highly leveraged. The higher the ratio, the greater risk will be associated with the Amazon's operation. In addition, a high debt-to-assets ratio may indicate a low borrowing capacity of Amazon, which in turn will lower the firm's financial flexibility. Like all other financial ratios, an Amazon debt ratio should be compared their industry average or other competing firms.
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Amazon Corporate Bonds Issued

Amazon issues bonds to finance its operations. Corporate bonds make up one of the most significant components of the U.S. bond market and are considered the world's largest securities market. Amazon Inc uses the proceeds from bond sales for a wide variety of purposes, including financing ongoing mergers and acquisitions, buying new equipment, investing in research and development, buying back their own stock, paying dividends to shareholders, and even refinancing existing debt. Most Amazon bonds can be classified according to their maturity, which is the date when Amazon Inc has to pay back the principal to investors. Maturities can be short-term, medium-term, or long-term (more than ten years). Longer-term bonds usually offer higher interest rates but may entail additional risks.
Issue DateMaturityCouponRef Coupon  Rating
AMAZON COM INC11/29/201211/29/20222.52.25
AA-
AMAZON COM INC12/05/201412/05/20213.31.875
AA-
AMAZON COM INC12/05/201412/05/20243.82.25
AA-
AMAZON COM INC12/05/201412/05/20344.85.375
AA-
AMAZON COM INC12/05/201412/05/20444.953.0
NA

Amazon Inc Historical Liabilities

While analyzing the current debt level is an essential aspect of forecasting the current year budgeting needs of Amazon, understanding its historical liability is critical in projecting Amazon's future earnings, especially during periods of low and high inflation and deflation. Many analysts look at the trend in assets and liabilities and evaluate how Amazon uses its financing power over time.

Understaning Amazon Use of Financial Leverage

Amazon financial leverage ratio helps in determining the effect of debt on the overall profitability of the company. It measures Amazon's total debt position, including all of outstanding debt obligations, and compares it with the equity. In simple terms, the high financial leverage means the cost of production, together with running the business day-to-day, is high, whereas, lower financial leverage implies lower fixed cost investment in the business and generally considered by investors to be a good sign. So if creditors own a majority of Amazon assets, the company is considered highly leveraged. Understanding the composition and structure of overall Amazon debt and outstanding corporate bonds gives a good idea of how risky the capital structure of a business and if it is worth investing in it.
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Last ReportedProjected for 2021
Total Debt84.4 B91.1 B
Debt Non Current84.4 B91.1 B
Issuance Repayment of Debt Securities-1.1 B-1.2 B
Long Term Debt to Equity 0.34  0.46 
Debt to Equity Ratio 2.44  3.02 
Amazon.com, Inc. engages in the retail sale of consumer products and subscriptions in North America and internationally. Amazon.com, Inc. was founded in 1994 and is headquartered in Seattle, Washington. Amazon operates under Internet Retail classification in the United States and is traded on NASDAQ Exchange. It employs 1271000 people.

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Pair Trading with Amazon

One of the main advantages of trading using pair correlations is that every trade hedges away some risk. Because there are two separate transactions required, even if Amazon position performs unexpectedly, the other equity can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Amazon will appreciate offsetting losses from the drop in the long position's value.

Amazon Pair Correlation

Equities Pair Trading Analysis

Correlation analysis and pair trading evaluation for Amazon and EBay Inc. Pair trading can be used as a hedging technique within a particular sector or industry or even over random equities to generate better risk-adjusted return
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Please continue to the analysis of Amazon Fundamentals Over Time. Note that the Amazon Inc information on this page should be used as a complementary analysis to other Amazon's statistical models used to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try Commodity Channel Index module to use Commodity Channel Index to analyze current equity momentum.

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When running Amazon Inc price analysis, check to measure Amazon's market volatility, profitability, liquidity, solvency, efficiency, growth potential, financial leverage, and other vital indicators. We have many different tools that can be utilized to determine how healthy Amazon is operating at the current time. Most of Amazon's value examination focuses on studying past and present price action to predict the probability of Amazon's future price movements. You can analyze the entity against its peers and financial market as a whole to determine factors that move Amazon's price. Additionally, you may evaluate how the addition of Amazon to your portfolios can decrease your overall portfolio volatility.
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The market value of Amazon Inc is measured differently than its book value, which is the value of Amazon that is recorded on the company's balance sheet. Investors also form their own opinion of Amazon's value that differs from its market value or its book value, called intrinsic value, which is Amazon's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Amazon's market value can be influenced by many factors that don't directly affect Amazon Inc underlying business (such as pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Amazon's value and its price as these two are different measures arrived at by different means. Investors typically determine Amazon value by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Amazon's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.