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Financial statement analysis of US companies
 

Financial statement analysis of US companies

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    Financial statement analysis of US companies Financial statement analysis of US companies Document Transcript

    • Ratio Description Short-term activity ratio Inventory turnover An activity ratio calculated as revenue divided by inventory. Receivables turnover An activity ratio equal to revenue divided by receivables. Payables turnover An activity ratio calculated as revenue divided by payables. Working capital turnover An activity ratio calculated as revenue divided by working capital. Cash conversion cycle A financial metric that measures the length of time required for a company to convert cash invested in its operations to cash received as a result of its operations Liquidity ratio Current ratio A liquidity ratio calculated as current assets divided by current liabilities. Quick ratio A liquidity ratio calculated as (cash plus short- term marketable investments plus receivables) divided by current liabilities. Cash ratio A liquidity ratio calculated as (cash plus short- term marketable investments) divided by current liabilities. Debt and solvency ratio Debt to equity A solvency ratio calculated as total debt divided by total shareholders' equity. Debt to capital A solvency ratio calculated as total debt divided by total debt plus shareholders' equity. Interest coverage A solvency ratio calculated as EBIT divided by interest payments. Profitability ratio Operating profit margin Net profit margin Return on equity (ROE) Return on assets (ROA) Apache Corporation Apache Corporation, an independent energy company, explores for, develops, and produces natural gas, crude oil, and natural gas liquids. It has exploration and production interests in the Permian, Central, Gulf of Mexico Shelf, Gulf of Mexico Deepwater, and Gulf Coast Onshore in the United States; British Columbia, Alberta, and Saskatchewan provinces in Canada; Egypt; offshore Western Australia in the Carnarvon basin; offshore the United Kingdom in the North
    • Sea; and in the Neuquén, Rio Negro, Tierra del Fuego, and Mendoza provinces of Argentina. The company sells its natural gas to local distribution companies, utilities, end-users, integrated oil companies, and supply aggregators and marketers. As of December 31, 2011, it had total estimated proved reserves of 1,370 million barrels of oil of crude oil, condensate, and NGLs; and 9.7 trillion cubic feet of natural gas. The company was founded in 1954 and is based in Houston, Texas. Short-term activity Ratio Apache Corp. BP Plc. Exxon IndustryDec 31, 2011 Dec 31, 2010 Dec 31, 2009 Inventory turnover 25.66 21.60 16.09 16.58 Receivables turnover 5.46 5.71 5.55 Payables turnover 16.04 15.64 21.60 Working capital turnover 6.26 6.35 5.10 15.95 Cash conversion cycle 58 57 72 23 Apache Corp.'s inventory turnover improved from 2009 to 2010 and from 2010 to 2011. Its receivables turnover improved from 2009 to 2010 but then deteriorated significantly from 2010 to 2011. Apache Corp.'s working capital turnover and cash conversion cycle improved from 2009 to 2010 but then slightly deteriorated from 2010 to 2011. Therefore, its short term activity ratios slightly deteriorated but compared to the industry average and its competitors, it is still leading the league. Liquidity ratio Apache Corp. BP Plc. Exxon IndustryDec 31, 2011 Dec 31, 2010 Dec 31, 2009 Current ratio 0.97 0.99 1.92 1.19 Quick ratio 0.68 0.64 1.50 0.77 Cash ratio 0.06 0.04 0.86 0.27
    • Apache Corp.'s current ratio deteriorated from 2009 to 2010 and from 2010 to 2011. Apache Corp.'s quick ratio deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011. Apache Corp.'s cash ratio deteriorated from 2009 to 2010 but then slightly improved from 2010 to 2011. Debt and solvency ratio Apache Corp. BP Plc. Exxon IndustryDec 31, 2011 Dec 31, 2010 Dec 31, 2009 Debt to equity 0.25 0.33 0.32 0.31 Debt to capital 0.20 0.25 0.24 0.24 Interest coverage 48.61 24.14 2.31 44.31 Apache Corp.'s debt-to-equity ratio and debt-to-capital ratio deteriorated from 2009 to 2010 but then improved from 2010 to 2011 exceeding 2009 level. Apache Corp.'s interest coverage ratio improved from 2009 to 2010 and from 2010 to 2011. Profitability ratio Apache Corp. BP Plc. Exxon IndustryDec 31, 2011 Dec 31, 2010 Dec 31, 2009 Operating profit margin 49.08% 44.61% 6.62% 15.04% Net profit margin 27.27% 24.89% -3.32% 8.60% Return on equity (ROE) 15.81% 12.44% -1.81% 17.87% Return on assets (ROA) 8.81% 6.98% -1.01% 8.62% Apache Corp.'s operating profit margin and net profit margin improved from 2009 to 2010 and from 2010 to 2011. Apache Corp.'s ROE and ROA improved from 2009 to 2010 and from 2010 to 2011. BP Plc. BP p.l.c. provides fuel for transportation, energy for heat and light, lubricants to engines, and petrochemicals products. Its Exploration and Production segment engages in the oil and natural gas exploration, field development, and production; midstream transportation, and storage and processing; and marketing and trading of natural gas, including liquefied natural gas (LNG), and power and natural gas liquids (NGL). This segment has exploration and production activities in Angola, Azerbaijan, Canada, Egypt, Norway, Russia, Trinidad and Tobago, the United Kingdom, and the United States, as well as in Asia, Australasia, South America, north Africa, and the Middle East. It also owns and manages crude oil and natural gas pipelines; processing facilities and export terminals; and LNG processing and
    • transportation, as well as NGL extraction facilities. The company’s Refining and Marketing segment is involved in refining, manufacturing, marketing, transportation, and supply and trading of crude oil, petroleum, and petrochemicals products and related services to wholesale and retail customers primarily under the BP, Castrol, and Aral brands. BP p.l.c. also engages in the alternative energy business, as well as offers shipping and treasury services. The company was founded in 1889 and is headquartered in London, the United Kingdom. Chevron Corporation Chevron Corporation, through its subsidiaries, engages in petroleum, chemicals, mining, power generation, and energy operations worldwide. It operates in two segments, Upstream and Downstream. The Upstream segment is involved in the exploration, development, and production of crude oil and natural gas; liquefaction, transportation, and regasification associated with liquefied natural gas; transportation of crude oil through pipelines; and processing, transportation, storage, and marketing of natural gas, as well as holds an interest in a gas-to-liquids project. The Downstream segment engages in refining crude oil into petroleum products; marketing crude oil and refined products primarily under the Chevron, Texaco, and Caltex names; transporting crude oil and refined products by pipeline, marine vessel, motor equipment, and rail car; and manufacturing and marketing commodity petrochemicals, plastics for industrial uses, and additives for fuel and lubricant additives. The company is also involved in coal and molybdenum mining operations; cash management and debt financing activities; insurance operations; real estate activities; and energy services, and alternative fuels and technology businesses, as well as manages interests in 13 power assets with a total operating capacity of approximately 3,100 megawatts. The company was formerly known as ChevronTexaco Corporation and changed its name to Chevron Corporation in 2005. Chevron Corporation was founded in 1879 and is headquartered in San Ramon, California. Exxon Mobil Corporation Exxon Mobil Corporation engages in the exploration and production of crude oil and natural gas, and manufacture of petroleum products, as well as transportation and sale of crude oil, natural gas, and petroleum products. The company manufactures and markets commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics, and other specialty products. It also has interests in electric power generation facilities. As of December 31, 2011, the company operated 37,692 gross and 31,683 net operated wells. Exxon Mobil Corporation has a strategic agreement with the Rosneft Oil Company for investment into oil and gas fields in the Russia Federation. The company has operations in the United States, Canada/South America, Europe, Africa, Asia, and Australia/Oceania. Exxon Mobil Corporation was incorporated in 1882 and is based in Irving, Texas.