Amazon.com Inc. (NASDAQ: AMZN) is an e-commerce platform that has grown into one of the world's largest and most diverse retailers. As of December 2015, Amazon's capital structure relied more heavily on equity financing than debt, though debt capitalization had generally increased as the company grew and matured. Amazon's 2015 debt-to-total-capital ratio fell within historical bounds and was also within the range of its closest peers. The company's enterprise value grew over the three-year period ending April 2016, and was driven primarily by the increasing market value of AMZN shares.

Equity Capital

Equity capital consists of the capital brought in from the issuance of equity and net profits generated by the business that are attributable to shareholders. Preferred stock, common stock, treasury stock, additional paid-in capital, retained earnings and accumulated other comprehensive income are common balance sheet items that contribute to equity capital. As of December 2015, Amazon's total stockholder equity was $13.4 billion, consisting of $13.4 billion of additional paid-in capital, $2.5 billion of retained earnings, $1.8 billion of treasury stock and $723 million of accumulated comprehensive loss. Common and preferred stock at par value was only $5 million.

Amazon's December 2015 total equity capital of $13.4 billion represented an increase from $10.7 billion in 2014 and $9.7 billion in 2013. Over that three-year span, retained earnings varied from $1.9 billion to $2.5 billion. Additional paid-in capital was the most significant contributor to rising shareholder equity, driven primarily by stock-based compensation of $1.5 billion in 2014 and $2.1 billion in 2015.

Debt Capital

Debt capital refers to the value of bonds, notes, term loans and other credit sources that are used to finance business operations. Most definitions of debt capital exclude operating liabilities, though investors and analysts will use broader definitions to include more balance sheet items and off-balance-sheet obligations, which can materially change capital structure analysis. It is far more common to restrict the analysis to formal debt obligations. Amazon carried long-term debt of $8.2 billion as of December 2015, with no short-term debt. This debt consisted primarily of notes with interest rates ranging from 1.2% to 4.95%, and maturity dates ranging from 2017 to 2044. These notes were issued in two rounds, in November 2012 and December 2014.

Amazon's total debt was largely unchanged in 2015 from $8.3 billion in 2014, but the company's indebtedness increased sharply in 2014 after the issuance of more than $6 billion in bonds. Amazon's total debt was only $3.2 billion in 2013 before the bond offering. The offering received diverging ratings from Standard & Poor's and Moody's, due largely to uncertainty around Amazon's ability or willingness to generate profits. Proceeds from the December issuance were intended for general corporate purposes.

Financial Leverage

Financial leverage measures the extent to which debt is present in capital structure. To get a clean comparison of debt capitalization relative to equity capitalization, the debt-to-total-capital ratio is an effective metric, where total capital is the sum of shareholder equity and total debt. As of December 2015, Amazon's debt-to-capital was 0.38, down from 0.44 in 2014 but higher than a ratio of 0.25 in 2013. For comparison, the debt-to-capital for Alibaba Group Holding Limited (NYSE: BABA) was 0.21 as of December 2015, while eBay Inc. (NASDAQ: EBAY) had a ratio of 0.51.

Enterprise Value

Enterprise value (EV) is a measure of a firm's full economic value, based on the market prices for common stock, preferred stock and debt, less cash and marketable investments. To compare the valuation of companies with different capital structures, EV/EBTIDA is often used by analysts. Enterprise value is also an important statistic for evaluating proposed acquisitions. As of April 2016, Amazon's enterprise value was $287 billion, down from the trailing-three-year high of $305 billion, but still well above $114 billion, which was its enterprise value in April 2013. While Amazon did increase its debt in late 2014, the primary driver of EV growth and volatility was the market value of its common stock.