This document analyzes the financial condition of Chevron Corp and ExxonMobil from 2004-2006. It summarizes key financial metrics like revenues, ratios, core competencies and investment considerations. Chevron and ExxonMobil both saw large revenue increases over this period and have strong profit margins, returns and debt levels. While generally solid investments, the document suggests they could invest more in renewable energy and embrace future energy needs.
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Financial Condition Assessment Final
1. Financial Condition Assessment: Chevron Corp and ExxonMobil Marc Kirkland – Revenues and income changes Dan Dyer – Ratios and benchmarks Neil Sinay – Core competencies and improvements Matt Ellis – Investment considerations
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Notes de l'éditeur
Both Chevron and ExxonMobil operate today, but are mindful of the future, factoring things such as: World Pop growth: -8 Billion people estimated for world pop in 2030 -over 50% of growth from developing nations -reliable, affordable, cleaner energy will be sought out -60% increase in energy demand in 2030 (compared to 2000) 2. Contrary to public belief, more than adequate oil and natural gas supplies exist: -oil is the transportation fuel of choice, and will remain so for decades to come -estimated liquid energy demand by 2030 is 115 million barrels/day. Resources abound 3. Assets are in place: -operations in over 180 countries -Not a 5 year plan, more like a 25 year plan! -expensive land and production assets and infrastructure dictate a farther look into the future -long distance view ignores short-term trends -continued upstream exploration operations 4. Technological advances: -deep water drilling down to over 28,000 feet! -oil shale, heavy oil refining techniques will unlock proven reserves potential -GTL (gas to liquids) technology ex. Converting natural gas to ultraclean diesel fuel -energy efficiency 5. Alt energy sources coming on line: -biofuels -solar -wind -geothermal
1. -Both Chevron and ExxonMobil outperformed the S&P500 in terms of EPS growth -bordering 30% 2. -Effective management of global organizations. -High ROI reinforces the true stocks’ values -Chevron: -ROI: 22.9% -ROE: 24.6% -ROA: 12.9% -Exxon: -ROI: 30.8% -ROE: 32.6% -ROA: 18.0% -Chevron’s ROA and ROE outperformed S&P500 by almost 10% last year -Exxon’s ROA and ROE outperformed S&P500 by over 2:1 last year 3. -Chevron had 19 years straight of dividend increases -ExxonMobil had an 8.9% div increase over the past 3 years
1. -Chevron’s sales growth increased by 19.9% over 3 years -Exxon’s sales growth increased by 15.2% over 3 years Both profit margins and ROE margins should be positively affected 2. Beta = stability Beta compares stock to the S&P500. S&P500 is a composite of large cap stocks, thought to reflect the market as a whole, thus measuring the US economy. 3. February 1, 2008 both will announce Q4 2007 EPS figures. That’s tomorrow!
IN CONCLUSION: -Chevron and ExxonMobil are not just “Big oil.” They are the arbitors of world development and growth -Both companies look far into the future and plan accordingly for change -Both companies emphasize world energy growth and efficiency as main objectives to conquer -Both companies have strong financials, are stable and tend to operate in a low profit-high volume manner -Our team conveyed 6 critical pieces of information offered as consideration for investment THANK YOU FOR YOUR TIME QUESTIONS?