Company Profile

Chevron Corporation is a public multinational energy corporation traded as NYSE:CVX, headquartered in San Ramon, California USA. Chevron and was founded on September 10, 1879. CVX is one of the largest oil companies as of 2019. The company produced fuel products, base oils and process oils, lubricants, chemicals, aviation fuels and marine fuels. The company is engaged in hydrocarbon exploration and production and refining. 

 

Chevron Corp (CVX) Extended Graph Analysis

1. CVX CASH FLOW

	2014	2015	2016	2017	2018	2019
Net cash flow provided by operating activities	31,475,000,000	19,456,000,000	12,846,000,000	20,515,000,000	30,618,000,000	30,808,000,000
Net cash provided by (used for) financing activities	-4,999,000,000	2,815,000,000	25,000,000	-14,554,000,000	-13,699,000,000	-15,243,000,000
Net cash used for investing activities	-29,893,000,000	-23,808,000,000	-16,852,000,000	-8,201,000,000	-12,290,000,000	-13,468,000,000
Capital expenditure	-35,407,000,000	-29,504,000,000	-18,109,000,000	-13,404,000,000	-13,792,000,000	-13,897,000,000
Free cash flow	-3,932,000,000	-10,048,000,000	5,263,000,000	7,111,000,000	16,826,000,000	16,911,000,000

Facts:

• Net cash flow provided by operating activities were $30.8 billion in the trailing twelve months.
• Net cash used for investing activities was -$13.5 billion in the trailing twelve months.
• Cash provided by (used for) financing activities was -$15 billion in the trailing twelve months.
• Capital expenditure was -$13.9 billion in the trailing twelve months.
• Free cash flow was $16.9 billion in the trailing twelve months.

Explanation

• Net income and depreciation have a significant amount in cash provided by operating activities.
• Cash used for investing activities were investment in property, plant and equipment, and purchases of investment.
• Cash provided by (used for) financing activities were debt issued and repayment, and dividend payments.
• Capital expenditure is investment in property, plant and equipment.
• Free cash flow had less one percent increase from 2018 to the trailing twelve months.

Interpretation

CVX was able to provide cash from operations in the last five years. Moreover, the company was able to generate a free cash flow from 2017 to the trailing twelve months.

 

2. CVX BALANCE SHEET

	2014	2015	2016	2017	2018	2019
Total cash	13,215,000,000	11,332,000,000	7,001,000,000	4,822,000,000	10,345,000,000	11,755,000,000
Current Assets	42,232,000,000	35,347,000,000	29,619,000,000	28,560,000,000	34,021,000,000	33,988,000,000
Net property, plant and equipment	183,173,000,000	188,396,000,000	182,186,000,000	177,712,000,000	169,207,000,000	164,363,000,000
Total non-current assets	223,794,000,000	230,756,000,000	230,459,000,000	225,246,000,000	219,842,000,000	222,549,000,000
Total assets	266,026,000,000	266,103,000,000	260,078,000,000	253,806,000,000	253,863,000,000	256,537,000,000
Current liabilities	31,926,000,000	26,464,000,000	31,785,000,000	27,737,000,000	27,171,000,000	30,233,000,000
Non-current liabilities	79,072,000,000	86,923,000,000	82,737,000,000	77,945,000,000	72,138,000,000	70,463,000,000
Total liabilities	110,998,000,000	113,387,000,000	114,522,000,000	105,682,000,000	99,309,000,000	100,696,000,000
Retained earnings	184,987,000,000	181,578,000,000	173,046,000,000	174,106,000,000	180,987,000,000	183,783,000,000
Stockholders equity	155,028,000,000	152,716,000,000	145,556,000,000	148,124,000,000	154,554,000,000	155,841,000,000

Facts:

• Total cash was $11.8 billion in Q3 2019.
• Current assets were $34 billion in Q3 2019.
• Net property, plant and equipment was $164 billion in Q3 2019.
• Total non-current assets were $223 billion in Q3 2019.
• Total assets were $257 billion in Q3 2019.
• Current liabilities were $30 billion in Q3 2019.
• Non-current liabilities were $70 billion in Q3 2019.
• Total liabilities were $107 billion in Q3 2019.
• Retained earnings were $184 billion in Q3 2019.
• Stockholders equity was $156 billion in Q3 2019.

Explanation

• Total cash was erratic in movement in the last five years. It grows 14 percent from 2018. It represents 35 percent of current assets.
• Current assets were erratic in movement in the last five years. It represents 13 percent of total assets.
• Net property, plant and equipment represents 74 percent of total non-current assets.
• Total non-current assets represents 87 percent of total assets.
• Total assets grew 1 percent from 2018.
• Current liabilities represent 30 percent of total liabilities.
• Non-current liabilities represent 70 percent of total liabilities.
• Total liabilities was 39 percent of total liabilities and stockholders equity.
• Retained earnings was 118 percent of equity.
• Stockholders equity represents 61 percent of total liabilities and shareholders equity.

Interpretation

The balance sheet is liquid. The company’s current assets are sufficient for its current obligations. CVX is using more of the shareholders investment than the sources from creditors in the usual business operations. In other words the shareholders have more stake than the creditors in the trailing twelve months.

3. CVX INCOME AND MARKET

	2014	2015	2016	2017	2018	2019
Revenue	200,494,000,000	129,925,000,000	110,215,000,000	134,674,000,000	158,902,000,000	145,629,000,000
EBIT	19,726,000,000	-3,710,000,000	-6,216,000,000	2,480,000,000	14,446,000,000	13,295,000,000
Net Income	19,241,000,000	4,587,000,000	-497,000,000	9,195,000,000	14,824,000,000	13,264,000,000
Market Capitalization	211,347,120,000	169,378,000,000	222,190,000,000	237,783,000,000	207,010,000,000	202,588,000,000
Intrinsic Value	209,073,862,419	212,683,314,721	333,795,619,400	423,503,597,323	716,272,790,115	995,200,421,499

Facts:

• Revenue was $146 billion in the trailing twelve months.
• EBIT was $13 billion in the trailing twelve months.
• Net income was $13 billion in the trailing twelve months.
• The market capitalization was $202.588 billion in the trailing twelve months.
• Intrinsic value was $995 billion in the trailing twelve months.

Explanation:

• Revenue was erratic in movement. It was down 8 percent from 2018.
• EBIT represents 9 percent of revenue in the trailing twelve months.
• Net income was 9 percent of revenue in the trailing twelve months.
• Market capitalization was erratic in movement in the last five years. It shows a decrease of 2 percent from 2018.
• Intrinsic value was higher than the market capitalization by 3x in the trailing twelve months.

Interpretation

The company was able to generate sufficient revenue for the operation of the business in the trailing twelve months.

 

4. CVX FINANCIAL RATIOS

	2014	2015	2016	2017	2018	TTM
Asset turnover (average)	0.77	0.49	0.42	0.52	0.63	0.57
Return on assets %	7.4	1.72	-0.19	3.58	5.84	5.17
Return on equity %	12.65	2.98	-0.33	6.26	9.8	8.57
Debt/Equity	0.15	0.22	0.24	0.23	0.19	0.16
Return on invested capital %	10.92	2.45	-0.2	5.02	8.17	7.31
Interest coverage	0	0	-9.75	31.04	28.51	24.25

Facts:

• Asset turnover was averaging 0.57 in the trailing twelve months.
• Return on asset was 5.17 percent in the trailing months.
• Return on equity was $8.57 percent in the trailing twelve months.
• Debt/Equity was 0.16 in the trailing twelve months.
• Return on invested capital was 7.31 percent in the trailing twelve months.
• Interest coverage was 24.25 in the trailing twelve months.

Explanation

• Asset turnover indicates that for every dollar invested in assets, the company generates 57 cents of sales.
• Return on asset indicates that for every dollar invested in assets, CVX generated 5.17 cents of net income.
• Return on equity indicates that for every dollar of the capital that the shareholders invested, the company generates 8.57 cents profit.
• Debt to Equity indicates that the company has $0.16 debt for every dollar of assets.
• Return on invested capital indicates that the company generated a 7.31 percent return from the company’s investments.
• The interest coverage indicates that the company has the ability to make interest payments on its debt in due date.

Interpretation

The company has the ability to generate cash for its daily business operations. CVX is using more of the investors money than creditors.

 

5. CVX KEY EXECUTIVE COMPENSATION

	2014	2015	2016	2017	2018
Key Executive Compensation	44,239,015	46,489,214	57,690,075	64,632,139	55,846,538
John S. Watson/Chairman of the Board and Chief Executive Officer	25,970,417	22,029,809	24,657,491	24,781,568	1,241,499
Patricia E. Yarrington/Vice President and Chief Financial Officer	9,781,357	7,379,867	6,541,425	8,152,053	7,159,079
Michael K. Wirth/Vice Chairman of the Board and Executive Vice President, Midstream & Development	8,487,241	8,123,840	9,129,645	11,669,681	20,640,623
James William Johnson/Executive Vice President, Upstream		8,955,698	9,416,320	11,024,515	10,925,982
Pierre R. Breber/Executive Vice President, Downstream & Chemicals					8,030,044
Joseph C. Geagea/Executive Vice President, Technology, Projects and Services			7,945,194	9,004,322	7,849,411

Facts:

• Total key executive compensation was $55,846,538 in 2018.
• Chairman of the Board and CEO compensation was $1,241,499 in 2018.
• Vice President and CFO compensation was $7,159,079 in 2018.
• Vice Chairman of the Board and EVP Mainstream & Development compensation was $20,640,623 in 2018.
• EVP Upstream compensation was $10,925,982 in 2018.
• EVP Downstream and Chemicals compensation was $8,030,044 in 2018.
• EVP Technology, Projects and Services compensation was $7,849,411 in 2018.

Explanation:

• The key executive total compensation represents 0.38 percent of net income in 2018.
• Chairman of the Board and CEO compensation represents 2 percent of the total key executive compensation.
• Vice President and CFO compensation represents 13 percent of the total key executive compensation in 2018.
• Vice Chairman of the Board and EVP Mainstream & Development compensation represents 37 percent of the total key executive compensation in 2018.
• EVP Upstream compensation represents 20 percent of the total key executive compensation in 2018.
• EVP Downstream and Chemicals compensation represents 14 percent of the total key executive compensation in 2018.
• EVP Technology, Projects and Services compensation  represents 14 percent of the total key executive compensation in 2018.

Interpretation

The company is spending less than one percent of its net income in its key executive compensation.

 

6. CVX LOBBYING AND CONTRIBUTIONS

PERIOD	USD	PERIOD	USD
2019	9,270,000	2008	12,994,000
2018	9,600,000	2007	9,030,000
2017	9,290,000	2006	7,480,000
2016	7,470,000	2005	9,490,000
2015	7,200,000	2004	5,220,000
2014	8,280,000	2003	4,620,000
2013	10,530,000	2002	4,620,000
2012	9,550,000	2001	1,519,296
2011	9,510,000	2000	1,680,000
2010	13,130,000	1999	2,040,000
2009	20,815,000	1998	2,969,825

Explanation:

The company has been lobbying and contributions to politicians yearly since 1998. A note from Center for Responsive Politics were quoted below:

“NOTE: Figures on this page are calculations by the Center for Responsive Politics based on data from the Senate Office of Public Records. Data for the most recent year was downloaded on January 23, 2020 and includes spending from January 1 – December 31. Prior years include spending from January through December.”

Interpretation

The company’s total lobbying and contributions in 2019 represents 0.07 percent of net income in 2019.

 

7. CVX FINANCIAL STRENGTH

DATA	USD
Working capital	6,850,000,000
Total assets	253,683,000,000
Sales	145,629,000,000
EBIT	13,295,000,000
Market value of equity	211,134,800,000
Book value of total liabilities	99,309,000,000
Retained earnings	180,987,000,000

 

CALCULATION

	Ratio	Score	Result
A – Working Capital / Total Assets	0.0270	1.20	0.03
B – Retained Earnings / Total Assets	0.71	1.40	1.00
C – EBIT / Total Assets	0.05	3.30	0.17
D – Market Value of Equity / Book Value of Total Liabilities	2.13	0.60	1.28
E – Sales / Total Assets	0.57	1.0	0.57
Z-Score			3.05

 

Formula: Z-Score = 1.2A + 1.4B + 3.3C + 0.6D + 1.0E

 

Explanation:

Z-Score is a statistical measurement that compares data points from different sets of data to find correlations. This measurement by Dr. Edward Altman is a significant measure in determining the financial strength of the company because it relies on different weighted financial liquidity and profitability metrics to come up with the overall score. This measure indicates the probability of bankruptcy.

Interpretation

Chevron Corporation. has a Z-Score of 3.05. Dr. Altman’s grading scale of 3.0 and above indicates that the company will not declare bankruptcy in near future. In other terms, the company is not close to insolvency. The main factors of this statistical measurement are profitability, liquidity, leverage and efficiency.

Overview

The company is capable of producing sufficient revenue for the operation of the business and able to produce free cash flow in the last three years.

 

Citation

https://www.chevron.com/about

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=1998&id=D000000015

https://www.morningstar.com/stocks/xnys/cvx/quote

Researched and written by Criselda