Financial Analysis of the Exxon Mobil Corp.
Stock ticker symbol: XOM, NASDAQ
Address: 1201 Airport Fwy, Irving, TX 75062, USA
Company phone number: +1 972-579-3840
Submitted by: Ashiq Shaik
Contents
PART 1, COMPANY OVERVIEW................................................................................................4
a. Brief description of the company............................................................................................4
b. Company history.....................................................................................................................4
c. Organization............................................................................................................................4
d. Main products and services....................................................................................................4
e. Geographic area of operations................................................................................................5
f. Recent developments...............................................................................................................5
PART 2, FINANCIAL OVERVIEW..............................................................................................6
a. Sales and Income Record......................................................................................................6
I. Graph Of Sales & Net Income, FY 2018 - 2022...............................................................6
II. Comments: On Sales & Net Income.............................................................................6
b. Expense Distribution............................................................................................................7
I. Pie Chart Of Expenses, FY 2022......................................................................................7
II. Comments: Comment on the company’s expense distribution.....................................7
c. Assets Distribution................................................................................................................8
I. PIE CHART OF ASSETS, Year-End FY 2022................................................................8
II. Comments on Assets Distribution.................................................................................9
c. Capital Structure.......................................................................................................................10
a) Capital Structure Pie Chart, Year-End FY 2022.........................................................10
b) Comments: Comment On The Company’s Capital Structure.....................................10
PART 3, RATIO ANALYSIS:......................................................................................................11
a) LIQUIDITY:.......................................................................................................................11
Current Ratio:........................................................................................................................11
Quick Ratio:...........................................................................................................................11
Comments On The Company’s Liquidity:............................................................................11
b) ASSET MANAGEMENT...............................................................................................12
Total Asset Turnover:............................................................................................................12
Average Collection Period:....................................................................................................12
Comments On The Company’s Asset Management:.............................................................12
c) DEBT MANAGEMENT:...................................................................................................13
Total Debt to Total Assets:....................................................................................................13
Times Interest Earned:...........................................................................................................13
Comments On The Company’s Debt Management:..............................................................13
d) PROFITABILITY:..........................................................................................................14
Net profit Margin:..................................................................................................................14
Return on Assets:...................................................................................................................14
Return on Equity:...................................................................................................................14
Modified Du Pont Equation, FY 2022:..................................................................................14
Comments On The Company’s Profitability:........................................................................14
e) MARKET VALUE RATIOS:............................................................................................15
PE Ratio:................................................................................................................................15
Market to Book Ratio:...........................................................................................................15
Comments On The Company’s Market Value Ratios:..........................................................15
References......................................................................................................................................17
PART 1, COMPANY OVERVIEW
a. Brief description of the company
The Exxon Mobil Firm, or simply ExxonMobil, is a U.S.-based international oil and gas
corporation. It is a publicly listed company that is involved in oil and gas exploration,
production, and distribution on a global scale, making it one of the biggest enterprises in the
world.
b. Company history
In 1999, two of the biggest oil firms in the world, Exxon Corporation and Mobil Corporation,
combined to establish ExxonMobil. Both businesses may trace their roots back many decades.
John D. Rockefeller established the Standard Oil Company in 1870, from which Exxon was
subsequently spawned. Mobil's precursor, the Socony-Vacuum Oil Company, was established in
1911. As a result of the merger, we now have a global energy giant that has dominated the oil
and gas industry for decades (Mbat et al., 2013).
c. Organization
There is little central authority at ExxonMobil. Many commercial and regional departments
manage the corporation. It has a lengthy track record of achievement in both downstream
refining and selling and upstream exploration and production. The company's activities may be
classified into three broad categories: upstream, downstream, and chemical (Priyadi et al., 2023).
d. Main products and services
ExxonMobil, an integrated oil & gas business, is responsible for exploration, production,
refining, and marketing. The primary products include crude oil, natural gas, jet fuel, gasoline,
diesel, lubricants, and petrochemicals. The company sells to manufacturers, large businesses, and
merchants equally.
e. Geographic area of operations
ExxonMobil is a multinational corporation with operations in several countries. It does
considerable business on all six continents, including North America, Europe, Asia, and
Australia. Customers from all around the world may acquire the company's goods owing to its
global distribution network.
f. Recent developments
ExxonMobil recently invested in technology and research to improve energy efficiency and
reduce emissions. The company has been seeking opportunities in renewable energy sources, as
well as expanding its presence in emerging areas. As part of their commitment to tackling
climate change challenges and cutting greenhouse gas emissions, ExxonMobil has participated in
carbon capture and storage efforts (Weston, 2002).
PART 2, FINANCIAL OVERVIEW
a. Sales and Income Record
2018 2019 2020 2021 2022
Sales (USD) $279,332,000,000 $255,583,000,000 $178,574,000,000 $276,692,000,000 $398,675,000,000
Percent Change in - -8.50% -30.13% 54.88% 44.08%
Sales
Net Income $20,840,000,000 $14,340,000,000 -$22,440,000,000 $23,040,000,000 $55,740,000,000
(USD)
Percent Change in - -31.23% -256.31% 202.57% 141.61%
Net Income
I. Graph Of Sales & Net Income, FY 2018 - 2022
Sales, Net Income
Sales Net Income
450000000000
400000000000
350000000000
300000000000
250000000000
200000000000
150000000000
100000000000
50000000000
2018 2019 2020 2021 2022
-50000000000
II. Comments: On Sales & Net Income
Sales data has changed over time. Sales fell between 2018 and 2020. Sales
rebounded in 2021 and 2022. The trend predicts the company will struggle and recover.
Net income has fluctuated throughout time. From 2018 through 2019, net income
decreased, then plummeted in 2020, leaving a negative net income. However, net profits
rose dramatically in 2021. Net income increased significantly again in 2022. After its
2020 losses, the company grew significantly. The graph compares sales to net income.
Sales typically increase net income, whereas lower sales decrease it. Sales performance
affects profitability. The company's sales and net income increased significantly from
2021 to 2022. This positive trend suggests that the firm utilized successful techniques to
enhance sales and profitability, resulting in great financial performance.
b. Expense Distribution
Major Expense Categories Amount
Cost of Goods and Services $ 271,568,000,000.00
Selling, General and Administrative Expenses $ 10,577,000,000.00
Exploration Expenses $ 1,025,000,000.00
Taxes Other Than Income Taxes $ 27,919,000,000.00
I. Pie Chart Of Expenses, FY 2022
0% 9%
3%
87%
Cost of Goods and Services
Selling, General and Administrative Expenses
Exploration Expenses
Taxes Other Than Income Taxes
II. Comments: Comment on the company’s expense distribution.
Cost of Goods and Services $271,568,000 is the company's biggest expense. This
demonstrates that the company's resources go to making and buying goods and services.
It might encompass manufacturing, production, and raw materials. Selling, General, and
Administrative Expenditures the business's second-largest expenditure category is
$10,577,000,000,000. Rent, utilities, administrative labor, marketing, sales, and other
running expenses are common. Exploration costs $1,025,000. New resource discoveries
and corporate development frequently incur these expenses. When addressing exploration
expenditures, ExxonMobil may incur charges for identifying and appraising prospective
oil and gas deposits. The company's tax expenses are $27,919,000,000. This includes
commercial property, excise, sales, and other non-income tax obligations.
c. Assets Distribution
Assets Amount
Cash $31,090,100
Accounts receivable $5,754,500
Inventory $1,820,500
Fixed Assets $3,606,800
Other Assets $1,267,600
I. PIE CHART OF ASSETS, Year-End FY 2022
Amount
Cash Accounts receivable Inventory
Fixed Assets Other Assets
II. Comments on Assets Distribution
By FY 2022, the company's assets were separated into various categories.
$31,090,100 in cash shows liquidity. Client invoices totaled $5,754,500 in accounts
receivable. Raw materials and finished goods totaled $1,820,500. Fixed-asset investments
totaled $3,606,800. Fixed assets include real estate, equipment, and other company
necessities. Unspecified non-current assets totaled $1,267,600. The firm balances short-
term investments in fixed assets, long-term investments in inventory, and consumer
receivables. These resources keep the firm running and generate revenue (Research,
2023).
Asset allocation by the corporation shows a strategic approach to keeping a
balance between short-term investments, operational resources, and liquidity. The firm
may sustain its existing operations, satisfy short-term commitments, and promote chances
for future development and value creation by making sure there are enough cash reserves,
managing accounts receivable, keeping inventory, and investing in fixed assets.
c. Capital Structure
Capital Structure Amount
Current Liabilities 69,045,000,000
Long-term & Other 97,549,000,000
Liabilities
Preferred Stock (if any) -
Common Equity 202,473,000,000
Debt Maturity Schedule Total 14,700,000,000
a) Capital Structure Pie Chart, Year-End FY 2022
Current Liabilities Long-term & Other Liabilities
Preferred Stock (if any) Common Equity
Debt Maturity Schedule Total
b) Comments: Comment On The Company’s Capital Structure.
The firm's FY 2022 capital structure may be studied using the aforementioned
data. Current liabilities, totaling $69,045,000, indicate the company's near-term
obligations. Liabilities include payables, accrued expenditures, and imminent financial
obligations. Long-term and other debts total $97,549,000,000. These loans take years to
repay. Long-term obligations include debt, capital leasing contracts, provisions, and
deferred taxes. No preferred stock information means the firm has no outstanding
preferred shares. Common stockholders possess $202,473,000,000. It includes paid-in
capital, reserves, cumulative comprehensive income/losses, retained profits, or
accumulated deficit. Common equity reflects the company's assets after commitments.
Debt maturity schedule totals $14,700,000,000. This figure determines the company's
debt repayment obligations.
PART 3, RATIO ANALYSIS:
a) LIQUIDITY:
FY 2021 FY 2022
Current Ratio:
XOM 1.044 1.414
SHEL 1.3477 1.3679
Quick Ratio:
XOM 1.02 1.06
SHEL 1.03 1.09
Comments On The Company’s Liquidity:
XOM and SHEL have steady liquidity in FY 2021 and FY 2022. Both XOM and SHEL have
current ratios over 1, suggesting that their current assets could pay their short-term liabilities.
SHEL's current ratio was 1.35, while XOM's rose from 1.044 to 1.414.
The acid-test ratio, or fast ratio, excludes inventories from current assets to measure liquidity
more conservatively. In FY 2021 and FY 2022, XOM and SHEL had fast ratios over 1, showing
they had enough liquid assets to satisfy their short-term obligations without inventory. XOM's
fast ratio rose from 1.02 to 1.06, and SHEL's from 1.03 to 1.09.
XOM and SHEL have high liquidity based on their current and quick ratios, suggesting they can
fulfill their short-term financial commitments and handle unforeseen financial issues. It shows
these organizations can run smoothly and handle short-term cash flow volatility. To make a more
educated liquidity choice, it is important to consider additional liquidity indicators and company-
specific considerations.
b) ASSET MANAGEMENT
FY 2021 FY 2022
Total Asset Turnover:
XOM 1.13 0.85
SHEL 0.6743 0.8717
Average Collection Period:
XOM 35 30
SHEL 32 25
Comments On The Company’s Asset Management:
XOM and SHEL have different asset management efficiency in FY 2021 and FY 2022.
Total Asset Turnover assesses a company's total asset revenue efficiency. In FY 2021, XOM
produced $1.13 in revenue per dollar of total assets. In FY 2022, the Total Asset Turnover
dropped to 0.85, implying revenue generating efficiency declined. SHEL's FY 2021 Total Asset
Turnover was 0.6743, indicating weaker revenue generating efficiency. In FY 2022, SHEL's
Total Asset Turnover increased to 0.8717, indicating a strong trend in asset utilization to produce
income.
Average Collection Period is the average number of days a firm takes to collect client
payments. The shorter the average collection time, the faster the firm collects cash from clients.
XOM's average collection duration dropped from 35 days in FY 2021 to 30 days in FY 2022,
indicating increased client payment collection. In FY 2021, SHEL had an average collecting
period of 32 days, which improved to 25 days in FY 2022.
SHEL improved its overall asset turnover in FY 2022, whereas XOM declined. In FY
2022, both corporations collected payments more efficiently. Since asset management differs
between industries and company models, it is important to include other elements and study the
industrial environment to fully comprehend it.
c) DEBT MANAGEMENT:
FY 2021 FY 2022
Total Debt to Total Assets:
XOM 0.481 0.451
SHEL 0.565 0.566
Times Interest Earned:
XOM 28.3 89.7
SHEL 6.9 20.2
Comments On The Company’s Debt Management:
Both XOM and SHEL exhibited trends in debt management and interest coverage.
A company's debt-to-asset ratio shows how much debt it has. XOM's Total Debt to Total
Assets ratio dropped from 0.481 to 0.451 in FY 2022. XOM used less debt to fund its assets in
the later year. SHEL had a Total Debt to Total Assets ratio of 0.565 in FY 2021 and 0.566 in FY
2022.
Times Interest Earned ratio measures a company's capacity to pay its interest
expenditures with its EBIT (EBIT). XOM's Times Interest Earned ratio rose from 28.3 to 89.7 in
FY 2022. XOM's interest-coverage capability increased dramatically. SHEL's FY 2021 Times
Interest Earned ratio was 6.9, while FY 2022's was 20.2, showing stronger interest coverage.
In FY 2022, XOM and SHEL improved debt management. XOM's debt-to-asset ratio
decreased, and its interest coverage grew, suggesting a stronger financial position and lower
financial risk. Despite a constant debt-to-assets ratio, SHEL improved interest coverage.
Companies must manage debt well to avoid financial trouble and boost investor trust. For
sustainable debt management and educated financial choices, these variables must be monitored
over time.
d) PROFITABILITY:
FY 2021 FY 2022
Net profit Margin:
XOM 13.98% 8.33%
SHEL 7.37% 10.95%
Return on Assets:
XOM 15.10% 6.80%
SHEL 5.101% 9.677%
Return on Equity:
XOM 28.58% 13.67%
SHEL 11.766% 22.261%
Modified Du Pont Equation, FY 2022:
XOM SHEL
Net Profit Margin 8.33% 10.95%
Total Asset Turnover 0.85 0.872
Equity Multiplier 1.823 2.300
Comments On The Company’s Profitability:
XOM and SHEL saw profitability swings in FY 2021 and FY 2022.
Net Profit Margin is the proportion of sales that becomes net income after costs. XOM's
net profit margin dropped from 13.98 percent to 8.33 percent in FY 2022. XOM's net income
dropped, indicating weaker profitability. SHEL's net profit margin rose from 7.37 percent in FY
2021 to 10.95 percent in FY 2022, indicating a good trend in profitability.
Return on Assets (ROA) measures a company's profitability. XOM's ROA dropped from
15.10 percent to 6.80 percent in FY 2022. XOM used its assets less efficiently to create revenues.
SHEL had a ROA of 5.101 percent in FY 2021 and 9.677 percent in FY 2022, indicating
increased asset utilization and profitability.
ROE gauges shareholder equity return. In FY 2022, XOM's ROE fell to 13.67 percent
from 28.58 percent in FY 2021. SHEL had a ROE of 11.766 percent in FY 2021 and 22.261
percent in FY 2022, indicating better profitability and shareholder returns.
The Modified Du Pont Equation breaks ROE into net profit margin, total asset turnover,
and equity multiplier. In FY 2022, XOM had an equity multiplier of 1.823, an 8.33% net profit
margin, and a 0.85 total asset turnover. SHEL had a 10.95% net profit margin, 0.872 total asset
turnover, and 2.300 equity multiplier. The Modified Du Pont Equation shows how several
variables affect firm profitability.
In FY 2022, SHEL outperformed XOM in major profitability parameters. Investors and
stakeholders must regularly monitor profitability to analyze a company's performance and
development prospects. Industry-specific indicators will reveal the firm’s profitability and
financial health.
e) MARKET VALUE RATIOS:
FY 2021 FY 2022
PE Ratio:
XOM 10.75 8.18
SHEL 8.19 4.99
Market to Book Ratio:
XOM 1.04 2.19
SHEL 0.93 1.03
Comments On The Company’s Market Value Ratios:
Market Worth Ratios reveal a company's market value and growth possibilities.
PE Ratio relates market price per share to earnings per share. Stronger PE ratios indicate
higher growth forecasts since investors are ready to pay more per dollar in profits. XOM's PE
ratio dropped from 10.75 to 8.18 in FY 2022. This reduction suggests investors paid less for
XOM's profits in the later year. SHEL had a PE ratio of 8.19 in FY 2021 and 4.99 in FY 2022,
reflecting a similar pattern of lowering market expectations.
Market-to-Book Ratio compares a company's stock price to its book value (net asset
value per share). A score greater than 1 indicates that the market values the company's assets
higher than its book value, which may imply growth potential or unreported intangible assets.
XOM's Market to Book Ratio rose from 1.04 to 2.19 in FY 2022. The market valued XOM's
assets more than their book value in the later year. SHEL had a Market to Book Ratio of 0.93 in
FY 2021 and 1.03 in FY 2022, reflecting a similar pattern of higher perceived value.
Over two years, XOM and SHEL's Market Value Ratios changed significantly. Both
firms' lower PE ratios signal investors' profits growth forecasts slowed. However, the rise in
Market to Book Ratio suggests that the market valued both firms' assets more than their book
value, either due to better market circumstances or enhanced growth prospects. These ratios help
investors evaluate a company's stock and returns. To make smart investing choices, additional
criteria and a thorough investigation are needed.
References
Mbat, D., Ibok, E., & Daniel, E. (2013). Exxon-Mobil and Corporate Social Responsibility in
Akwa Ibom State, Nigeria: Past and Present. Public Policy and Administration Research,
3(3), 21-28.
Priyadi, U., Atmadji, E., & Mochamad Ali Imron, T. (2023). Exploring Corporate Social
Responsibility: A Phenomenological Study of Exxon Mobil CEPU CSR Exploration.
Journal of Survey in Fisheries Sciences, 2058-2070.
Research, Z. E. (2023). General Mills (XOM) Gains As Market Dips: What You Should Know.
https://finance.yahoo.com/news/general-mills-XOM-gains-market-220024692.html
Weston, J. F. (2002). The exxon-mobil merger: An archetype. Journal of Applied Finance, 12(1),
69-88.
