exxon mobil research paper

FINANICAL ANALYSIS OF EXXON MOBIL

FINANICAL ANALYSIS OF EXXON MOBILBusiness Finance

BUS-351Professor Fouad MoussaBeth McGinnisJune 3, 2014

Financial Analysis of Exxon MobilIn 1870, Exxon Mobil Corporation was founded and is headquartered in Irving, Texas. Exxon Mobil Corporation explored and produced for crude oil and natural gas. The company is a manufacturer and marketer of commodity petrochemicals includes olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products, and transports and sells crude oil, natural gas, and petroleum products. In addition, the company has a number of divisions and affiliates with names that include ExxonMobil, Exxon, Esso or Mobil. Divisions and affiliated companies of the Company operate on market products in the United States and other countries of the world. The company has interests in electric power generation facilities. Exxon Mobil Corporation operates in the United States, Canada, South America, Europe, Africa, Asia and Australia/Oceania. Competitors Comparisons between Companies (Cross-sectional Analysis)There are three major oil corporations competition. The direct competitor comparison shows that Exxon Mobil Corporation Market cap is $431.71B. BP Market cap is $156.44B. Chevron Corporation (CVX) Market cap is $233.7B. The industry shows the overall average is $67.65B. Exxon Mobil Corporation is higher all of them. Chevron Corporation (CVX) is still strong business. BP has a long way to go based oil spills near New Orleans and North Florida. Lots of consumers boycotted to buy gas at BP. BP are working hard to improve its business. Exxon Mobil Corporation has number of employees is 75,000 while BP has number of employees is 79,600. Chevron Corporation (CVX) has low number of employees is 64,600. BP has a bit higher number of employees than Exxon Mobil Corporation and Chevron Corporation.

The structure of Exxons financial statementsThe excel model uses ExxonMobils financial statements obtained from Yahoo Finance. All the ratios and measurement are derived from the balance sheet, income and cash flow statement. The only two competitors Exxon Mobil Corp. and Chevron Corp. show their net income. Exxon Mobil Corporations net income is very high. Exxon Mobil Corporation already paid from EBIT (Earnings before Interest Taxes) through EBT (Earnings before taxes). Their net income is very high. Moreover, Chevron Corporation earned only $19.76B net income. Both of their depreciation and amortization are different, Chevron Corp probably lumped together for purposes of financial analysis on the income statement and for other purposes. They probably write off, or allocate, the costs of assets over their useful lives. Exxon Mobil Corporation probably has no cash to be paid out to cover depreciation and amortization. Price/Earnings (P/E) ratioThe price/earnings (P/E) ratio shows how much investor is willing to pay per dollar of reported profits. Exxon Mobil Corporation, BP and Chevron Corporation do not have a report about their price/earnings (P/E) per yahoo finance. The industry has the report for price/earnings (P/E) ratio average in the oil industry. Industrys price/earnings (P/E) ratio reported $14.75B in the oil industry.

Price-sales (P/S) ratio Exxon Mobil Corporations price-sale (P/S) ratio shows 1.11. BPs price sale (P/S) ratio shows 0.42. Chevron Corporations price-sale (P/S) ratio shows 1.12. The industry shows in the oil industry is about 1.24. Exxon Mobil Corporation and Chevron Corporations price-sale (P/S) ratio is below the industry average of 1.24. Income Statement: 2012 & 2011 (APPENDIX A)Exxon Mobil Corporation (XOM)-NYSE Follow100.53 0.74(0.73%) May 30, 4:00PM EDT|After Hours : 100.50 0.03 (0.03%) May 30, 7:53PM EDTTop of FormBottom of FormIncome StatementGet Income Statement for:

View: Annual Data | Quarterly DataAll numbers in thousands

Period EndingDec 31, 2013Dec 31, 2012Dec 31, 2011

Total Revenue 420,836,000 451,509,000 467,029,000

Cost of Revenue284,681,000302,056,000306,802,000

Gross Profit 136,155,000 149,453,000 160,227,000

Operating Expenses

Research Development- - -

Selling General and Administrative76,696,00081,844,00088,459,000

Non Recurring1,976,0001,840,0002,081,000

Others17,182,00015,888,00015,583,000

Total Operating Expenses- - -

Operating Income or Loss 40,301,000 49,881,000 54,104,000

Income from Continuing Operations

Total Other Income/Expenses Net3,492,00014,162,0004,111,000

Earnings Before Interest And Taxes57,720,00079,053,00073,504,000

Interest Expense9,000327,000247,000

Income Before Tax57,711,00078,726,00073,257,000

Income Tax Expense24,263,00031,045,00031,051,000

Minority Interest(868,000)(2,801,000)(1,146,000)

Net Income From Continuing Ops46,507,00059,890,00056,349,000

Non-recurring Events

Discontinued Operations- - -

Extraordinary Items- - -

Effect Of Accounting Changes- - -

Other Items- - -

Net Income 32,580,000 44,880,000 41,060,000

Preferred Stock And Other Adjustments- - -

Net Income Applicable To Common Shares 32,580,000 44,880,000 41,060,000

Balance Sheet: 2012 & 2011 (APPENDIX B)Exxon Mobil Corporation (XOM)-NYSE Follow100.53 0.74(0.73%) May 30, 4:00PM EDT|After Hours : 100.50 0.03 (0.03%) May 30, 7:53PM EDTTop of FormBottom of FormBalance SheetGet Balance Sheet for:



Assets

Current Assets

Cash And Cash Equivalents4,913,0009,923,00013,068,000

Short Term Investments- - -

Net Receivables33,152,00034,987,00038,642,000

Inventory16,135,00014,542,00015,024,000

Other Current Assets5,108,0005,008,0006,229,000

Total Current Assets 59,308,000 64,460,000 72,963,000

Long Term Investments36,328,00034,718,00034,333,000

Property Plant and Equipment243,650,000226,949,000214,664,000

Goodwill- - -

Intangible Assets- - -

Accumulated Amortization- - -

Other Assets7,522,0007,668,0009,092,000

Deferred Long Term Asset Charges- - -

Total Assets 346,808,000 333,795,000 331,052,000

Liabilities

Current Liabilities

Accounts Payable55,916,00060,486,00069,794,000

Short/Current Long Term Debt15,808,0003,653,0007,711,000

Other Current Liabilities- - -

Total Current Liabilities 71,724,000 64,139,000 77,505,000

Long Term Debt11,633,00011,483,0009,322,000

Other Liabilities42,426,00048,943,00046,863,000

Deferred Long Term Liability Charges40,530,00037,570,00036,618,000

Minority Interest6,492,0005,797,0006,348,000

Negative Goodwill- - -

Total Liabilities 172,805,000 167,932,000 176,656,000

Stockholders' Equity

Misc Stocks Options Warrants- - -

Redeemable Preferred Stock- - -

Preferred Stock- - -

Common Stock10,077,0009,653,0009,512,000

Retained Earnings387,432,000365,727,000330,939,000

Treasury Stock(212,781,000)(197,333,000)(176,932,000)

Capital Surplus- - -

Other Stockholder Equity(10,725,000)(12,184,000)(9,123,000)

Total Stockholder Equity 174,003,000 165,863,000 154,396,000

Net Tangible Assets 174,003,000 165,863,000 154,396,000

Cash Flow: 2012 & 2011 (APPENDIX C)Exxon Mobil Corporation (XOM)-NYQ Follow100.53 0.74(0.73%) May 30, 4:00PM EDT|After Hours : 100.50 0.03 (0.03%) May 30, 7:53PM EDT

Top of FormBottom of FormCash FlowGet Cash Flow for:



Net Income 32,580,000 44,880,000 41,060,000

Operating Activities, Cash Flows Provided By or Used In

Depreciation17,182,00015,888,00015,583,000

Adjustments To Net Income482,0003,313,000262,000

Changes In Accounts Receivables(2,803,000)2,542,000974,000

Changes In Liabilities- - -

Changes In Inventories(1,812,000)(1,873,000)(2,208,000)

Changes In Other Operating Activities(1,583,000)(11,381,000)(1,472,000)

Total Cash Flow From Operating Activities 44,914,000 56,170,000 55,345,000

Investing Activities, Cash Flows Provided By or Used In

Capital Expenditures(33,669,000)(34,271,000)(30,975,000)

Investments(3,311,000)952,000(2,547,000)

Other Cash flows from Investing Activities2,779,0007,718,00011,357,000

Total Cash Flows From Investing Activities (34,201,000) (25,601,000) (22,165,000)

Financing Activities, Cash Flows Provided By or Used In

Dividends Paid(11,179,000)(10,419,000)(9,326,000)

Sale Purchase of Stock(15,949,000)(20,671,000)(21,147,000)

Net Borrowings11,604,000(2,908,000)1,957,000

Other Cash Flows from Financing Activities48,000130,000260,000

Total Cash Flows From Financing Activities (15,476,000) (33,868,000) (28,256,000)

Effect Of Exchange Rate Changes(175,000)217,000(85,000)

Change In Cash and Cash Equivalents (4,938,000) (3,082,000) 4,839,000

SymbolExchangeXOM:USXOM*:MMXONA:GREXXO34:BZSao PauloXOM:CB

Analysis of Financial Statements 2013 & 2012

YearRatio LiquidityCurrent assets/Current Liabilities RatioIndustry AverageComment

2013$59.308B/$71.724B= 0.83x= 0.83xRatio 2013 decreased from Ratio 2012; because a current asset is a bit lower than 2012.

2012$64.460B/$64.139B= 1.01xRatio 2012 was higher than Ratio 2013

YearRatio QuickCurrent assets Inventories/Current liabilitiesRatioIndustry Average Comment

2013$59.308B-$16.135B/$71.724B= 0.60x=0.60xRatio 2013 decreased from Ratio 2012; because a current asset is a bit lower than 2012.

2012$64.460B-$14.542B/$64.139B= 0.78xIt is a bit high.

YearRatio Inventory turnoverSales/InventoriesRatioIndustry AverageComment

2013$420.836B/$16.135B= 26.08xn/aNo information on yahoo finance for Exxon Mobil Corp. Ratio 2013 I

2012$451.509B/$14.542B= 31.04xn/aIt is a big high turnover in 2012.

YearRatio Days sales outstanding (DSO)Receivables/Annual sales/365RatioIndustry AverageComment

2013$33.152B/$420.836B/365= 2.16xn/aRatio 2013 and 2012 is very close. It is only .04 differences.

2012$34.987B/$451.509B/365= 2.12xn/aNormal

YearRatio Fixed assets turnoverSales/Net fixed assetsRatioIndustry AverageComment

2013$420.836B/$7.522B= 55.95xn/aIt was 2.93x decrease than in 2012. Business is average.

2012$451.509B/$7.668B= 58.88xn/a Ratio is only 2.93 higher than 2013. However it is still good business.

YearRatio Total assets turnoverSales/Total assetsRatioIndustry Average Comment

2013$420.836B/$346.808B= 1.21x=1.16xOnly .05 increase in ratio. Business is still strong.

2012$451.509B/$333.795B= 1.35x2012 shows a bit high ratio than in 2013. Only .19 higher than Ratio 2012. Both 2013 and 2012 is still strong business.

YearRatio Total debt to total capitalTotal debt/Total capitalRatioIndustry AverageComment

2013$11.633B/$243.650B= 4.77x11.54xRatio is much lower than Industry Average 11.54x. Exxon Mobil is managed with total debt and total capital very good.

2012$11.483B/$226.949B= 5.06xRatio is still lower than Industry Average 11.54x. Both 2012 and 2013 is still strong.

YearRatio Times-interest earned (TIE)EBIT/Interest chargesRatioIndustry Average Comment

2013$57.720B/$9,000= .64xn/aIt shows that Ratio 2012 is higher than 2013. Because Exxon Mobil has low interest expense. In 2012, the corp. has spend so much on interest expense.

2012$79.053B/$327,000= 2.42xn/aThe corp. has spent so much on interest expense.

YearRatio Operating marginOperating income (EBIT)/Sales RatioIndustry AverageComment

2013$57.720B/$420.836B= 13.72x= 11.12xRatio 2013 & 2012 is high than Industry Average. The corp. made lots of money than Industry Average. Its strong business.

2012$79.053B/$451.509B= 17.51x

YearRatio Profit MarginNet Income/SalesRatioIndustry AverageComment

2013$32.580B/$420.836B= .077xn/aIn 2013, net income and sales is a bit lower than 2012. The difference is .022 between the year 2012 and 2013. The business is still strong.

2012$44.880B/$451.509B= .099xn/a

YearRatio Return on total assets (ROA)Net income/Total assetsRatioIndustry AverageComment

2013$32.580B/$346.808B= .09x= 9.57xIt is below Industry average. Net income and total assets is very strong business.

2012$44.880B/$64.460B= .70x

YearRatio Return on invested capital (ROIC)EBIT (1-T)/Total invested capital RatioIndustry AverageComment

2013$46.507B/$243.650B= .19xn/aIn the year of 2013, Ratio .19 is way low than the year of 2012, because they have spent income from continuing operations, total other income and expenses net.

2012 $78.726B/$165.863B= .47x

YearRatio Basic earning power (BEP)EBIT/Total assetsRatioIndustry AverageComment

2013$3.492B/$346.808B= 1.00xn/aIn the year of 2013, Ratio .22 is a bit less than in the year of 2012. They have spent income from continuing operations, total other income and expenses net. Total assets is a bit same.

2012$78.726B/$64.460B= 1.22xn/a

YearRatio Price/Earnings (P/E)Price per share/Earnings per shareRatioIndustry AverageComment

2013n/a= 1.11x= 1.24xPrice per share is only .13 less than Industry Average. Industry Average has P/E for $14.75B. There is a lack of information on P/E for the year of 2013 and 2013 per yahoo finance.

2012 n/an/an/aDitto

YearRatio Market/Book (M/B)Market price per share/Book value per shareRatioIndustry AverageComment

2013 Market price per share (common stock) for $10.077B. However, book value per share is not available on the balance sheet per Exxon Mobil Corp.

2012 Ditto

Analysis of Financial Statements 2013 & 2012

In conclusion, Exxon Mobil has biggest advantage is lies in its capital structure and efficient operations. The company barely carries any debt therefore the interest expense is low and the stability is high. However the cost of capital is higher than optimal. As far as the operations go Exxon generates huge revenue with relatively low costs. The most important thing is that it would identify as challenges are the inventory turnover and operating cycles. It is understandable that a large company is slower in delivering the product and collecting revenue, but still they need to try to reduce the operating cycle as close to the one the competition has they could. It is strongly recommended investors to invest its money for stocks for Exxon Mobil. The Corporation is a stable in oil industry for years and year.

exxon mobil research paper

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