Chevron Corp (CVX)
Profitability ratios
Return on sales
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Gross profit margin | 32.70% | 30.67% | 30.04% | 29.20% | 24.15% |
| Operating profit margin | 13.56% | 13.32% | 20.38% | 10.40% | -6.45% |
| Pretax margin | 13.56% | 15.02% | 20.17% | 13.91% | -7.89% |
| Net profit margin | 8.71% | 10.85% | 14.40% | 10.04% | -5.87% |
Chevron Corp's gross profit margin has shown a consistent upward trend over the past five years, increasing from 24.15% in December 2020 to 32.70% in December 2024. This indicates the company's ability to efficiently generate profits from its core operations.
The operating profit margin experienced fluctuations during the period under review. The margin was negative in December 2020 at -6.45%, but improved significantly to 20.38% in December 2022, before stabilizing around 13.56% in December 2023 and 2024. This suggests that while Chevron has been able to effectively control its operating expenses, there were variations in its operational efficiency over the years.
The pretax margin reflects the company's profitability before accounting for taxes. Chevron's pretax margin started at -7.89% in December 2020, but steadily increased to 20.17% by December 2022. However, it declined slightly to 13.56% in December 2024, indicating some fluctuations in the company's pre-tax profitability.
The net profit margin, which represents the company's profitability after all expenses are deducted, has followed a similar trend to the pretax margin. Chevron's net profit margin was negative in December 2020 at -5.87% and improved to 14.40% in December 2022. However, it decreased to 8.71% by December 2024, showing a decline in profitability in the latter years.
Overall, Chevron Corp has shown improvements in its profitability margins over the years, with varying degrees of performance in different periods. The company's ability to sustain and improve these margins will be crucial for its long-term financial success.
Return on investment
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 10.71% | 10.03% | 19.48% | 6.75% | -2.54% |
| Return on assets (ROA) | 6.87% | 8.17% | 13.76% | 6.52% | -2.31% |
| Return on total capital | 17.89% | 17.59% | 26.16% | 13.90% | -3.82% |
| Return on equity (ROE) | 11.25% | 13.28% | 18.49% | 9.34% | -3.42% |
Chevron Corp's profitability ratios show an improvement over the years.
1. Operating Return on Assets (Operating ROA):
- Chevron's operating return on assets was negative at -2.54% in December 2020, but it improved significantly to 19.48% by December 2022. In the following years, it remained above 10%.
- This indicates that Chevron's operating activities have become more efficient and effective in generating profits from its assets over time.
2. Return on Assets (ROA):
- Similar to Operating ROA, Chevron's return on assets was negative in December 2020 but increased to 13.76% by December 2022. It then decreased slightly in the subsequent years.
- The trend suggests that Chevron is able to generate better profits relative to its total assets, with 2022 showing the highest return in the period.
3. Return on Total Capital:
- Chevron's return on total capital saw significant improvement from -3.82% in December 2020 to 26.16% in December 2022. Subsequently, it stabilized around 17-18%.
- This ratio reflects the company's ability to generate returns for both debt and equity holders, indicating effective capital utilization and profitability.
4. Return on Equity (ROE):
- Chevron's return on equity was negative in December 2020 but climbed to 18.49% by December 2022 before slightly decreasing in the later years.
- The increasing trend in ROE signifies that Chevron is efficiently generating profits for its shareholders relative to the equity invested.
Overall, Chevron's profitability ratios demonstrate a positive trajectory, indicating improved operational efficiency and profitability, especially in the mid to late years of the analyzed period.