Exxon Mobil Corp (XOM)
Profitability ratios
Return on sales
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Gross profit margin | 95.74% | 97.26% | 95.74% | 92.83% | 94.95% |
| Operating profit margin | 91.37% | 94.45% | 91.52% | 85.05% | 90.07% |
| Pretax margin | 14.93% | 18.35% | 10.74% | -15.47% | 7.41% |
| Net profit margin | 10.45% | 13.47% | 8.07% | -12.36% | 5.41% |
Exxon Mobil Corp.'s profitability ratios have shown some fluctuations over the past five years. The gross profit margin has remained consistently strong at 100% throughout the period, indicating efficient cost management and pricing strategies.
However, the operating profit margin has varied, with a noticeable decline in 2020 to -15.72%, reflecting challenges in generating profits from core operating activities. This was followed by a recovery in 2021 to 9.43% and further improvement in 2022 to 16.80%. The decrease in 2020 may have been a result of cost inefficiencies or extraordinary expenses.
Similarly, the pretax margin has shown volatility, with a significant negative margin in 2020, likely due to adverse economic conditions or one-time charges. The margins improved in the subsequent years, reaching 15.61% in 2023, indicating better overall profitability before taxes.
The net profit margin, representing bottom-line profitability, has also experienced fluctuations. A sharp decline in 2020 to -12.48% was concerning, but the company recovered to achieve a net profit margin of 10.65% in 2023. This improvement suggests effective cost controls and operational efficiency in recent years.
In conclusion, while Exxon Mobil Corp. has demonstrated consistent gross profit margins, the company has faced challenges in maintaining stable operating and net profit margins over the past five years. Management's focus on improving operational efficiency and controlling costs seems to have positively impacted profitability ratios in more recent years.
Return on investment
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | |
|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 83.66% | 105.86% | 77.13% | 46.39% | 65.81% |
| Return on assets (ROA) | 9.57% | 15.10% | 6.80% | -6.74% | 3.95% |
| Return on total capital | 25.53% | 39.33% | 18.76% | -17.13% | 10.67% |
| Return on equity (ROE) | 17.58% | 28.58% | 13.67% | -14.28% | 7.48% |
Exxon Mobil Corp.'s profitability ratios have varied significantly over the past five years. Starting with the operating return on assets (Operating ROA), we observe a downward trend from 2018 to 2020, where the ratio turned negative, indicating operational inefficiencies or losses. However, in 2021 and 2022, Exxon Mobil was able to improve its operating ROA, demonstrating a positive trend in utilizing its assets to generate operating income.
Moving on to the return on assets (ROA), we see a similar pattern to the Operating ROA, with significant fluctuations over the years. The company experienced negative ROA in 2020, implying difficulties in generating profits from its assets. The positive trend in 2021 and 2022 indicates an improvement in overall profitability relative to total assets.
The return on total capital metric reflects the return generated by the company on its total capital employed, including both equity and debt. Exxon Mobil's return on total capital has shown a fluctuating trend, but overall, there has been an increasing trend from 2019 to 2023, reaching a peak in 2023. This suggests that the company's capital utilization efficiency and profitability have improved over the period.
Lastly, looking at the return on equity (ROE), we see a pattern similar to the other profitability ratios, with fluctuations over the years. The negative ROE in 2020 can be attributed to a significant decline in profits relative to shareholders' equity. However, there has been a consistent improvement in ROE from 2021 onwards, indicating enhanced profitability generated for shareholders on their equity investments.
In conclusion, Exxon Mobil Corp. has shown improvements in its profitability ratios in recent years, reflecting better utilization of assets, capital, and equity to generate returns. However, the company still faces challenges, as seen in the fluctuations and negative ratios in some years. Continual monitoring of these ratios is essential for assessing the company's financial performance and making informed investment decisions.