Overview: Profitability Ratio
Name of the Company: ExxonMobil Corporation
10K Report: https://www.sec.gov/Archives/edgar/data/34088/000003408818000015/xom10k2017.htm
Company Website: https://corporate.exxonmobil.com/
Industry name and NAICS Code: Oil and Gas Industry
Profitability ratio is described as the financial metrics, which are used to evaluate the ability of a company to generate earnings based on its revenue, balance sheet, operating costs and shareholder’s equity CITATION Pau18 \p 12 \l 1033 (Patterson 12). It is also show how company can efficiency use its assets to generate revenue. The higher the profitability ratio the better, because it indicates how viable a company is and that attract most investors. The profitability ratio of ExxonMobil Corporation is therefore, listed below:
Ratio 201720162015Industry ratio
Gross Margin Ratio23.1617.8920.49 24.25
Operating profit margin 5.090.434.967.92
Pretax net profit 7.873.658.4711.08
Pretax return on Equity11.104.649.3410.98
Pretax return on Asset5.812.354.71 6
The profitability ratio of ExxonMobil indicates that, ExxonMobil performance has increased steadily over the last decade. ExxonMobil profitability also indicates that the company performance has not been consistent. It fluctuates and this could be as result of several market factors in the oil and gas industry CITATION Jos15 \p 13 \l 1033 (Jurkowski 13). In the FY 2017, ExxonMobil profitability ratio is high compared to the FY 2016 and 2015. In FY 2017, the pretax return on asset was 5.81, return on equity was 11.10 and gross margin ratio was 23.16 against the industry ratio of 6, 10.98 and 24.25 respectively. This means that ExxonMobil was at its optimal during the FY 2017 compared to 2015 and 2016, which registered the lowest result. However, in the FY 2015 and 2016, ExxonMobil registered remarkable improvement in performance, and this means that the company has been performing well over the last three years. It is therefore, important to note that ExxonMobil has been utilizing its assets to generate more revenue. And therefore, it has enough cash flow, which can be used for business expansion.
BIBLIOGRAPHY Jurkowski, Joseph H. "Liquidity And Solvency Financial Analysis Of Oil Companies In Bric Countries." International Journal of Arts and Commerce (2015): 2-15.
Patterson, Paul. "Exxon Mobil Corp. (XOM)." https://www.stock-analysis-on.net/NYSE/Company/Exxon-Mobil-Corp/Ratios/Liquidity/Quarterly-Data (2018): 2-15.
Useful LinksFree Essays About Blog
If you have any queries please write to us
Join our mailing list
@ All Rights Reserved 2023 email@example.com