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ConocoPhillips (COP) Extended Graph analysis

March 14th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

COP logo

ConocoPhillips is one of the largest American multinational energy Corporations engaged in the exploration, production, transportation and marketing of crude oil, gas, petroleum  and other products. ConocoPhillip is a public company traded as NYSE: COP. The company was founded in 1875 by Frank Phillips, headquartered in Houston Energy Corridor, Houston Texas, USA.

 

ConocoPhillips (COP) Extended Graph Analysis

1. COP CASH FLOW

COP CASH FLOW

2015 2016 2017 2018 2019 TTM
Net cash flow provided by operating activites 7,572,000,000 4,403,000,000 7,077,000,000 12,934,000,000 11,104,000,000 11,104,000,000
Net cash used for investing activities -8,655,000,000 -3,859,000,000 7,762,000,000 -3,843,000,000 -6,618,000,000 -6,618,000,000
Net cash provided by (used for) financing activities -1,429,000,000 764,000,000 -12,356,000,000 -9,359,000,000 -5,229,000,000 -5,229,000,000
Capital expenditure -10,050,000,000 -4,869,000,000 -4,591,000,000 -6,750,000,000 -6,636,000,000 -6,636,000,000
Free cash flow -2,478,000,000 -466,000,000 2,486,000,000 6,184,000,000 4,468,000,000 4,468,000,000
Working Capital -467,000,000 1,700,000,000 7,115,000,000 5,879,000,000 9,870,000,000 9,870,000,000

Facts:

  • Cash provided by operating activities was $11.104 billion in the trailing twelve months.
  • Cash used for investing activities were -$6.6 billion in the trailing twelve months.
  • Net cash used for financing activities were -$5 billion in the trailing twelve months.
  • Capital expenditures were -$6.6 billion in the trailing twelve months.
  • Free cash flow was $4.5 billion in the trailing twelve months.
  • Working capital was $9.87 billion in the trailing twelve months.

Explanation:

  • Cash provided by operating activities is erratic in movement in the last five years. It has a negative growth of 14% from 2018.
  • Cash used for investment activities are investment in property, plant and equipment.
  • Cash provided by financing activities are debt repayment, common stock repurchased and dividends paid.
  • Capital expenditures are investment in property, plant and equipment.
  • Free cash flow was erratic in movement in the last five years and has a negative growth of 28% from 2018.
  • Working capital grew 68% in the last five years.

Interpretation

The cash flow statements were stable although there was negative growth within five years period. The company has the ability to provide cash from operations in five years and has not seen any negative cash from operations in five years.

 

2. COP BALANCE SHEET

COP BALANCE SHEET

2015 2016 2017 2018 2019
Total cash 2,368,000,000 3,660,000,000 10,097,000,000 7,625,000,000 10,227,000,000
Current Assets 8,789,000,000 8,609,000,000 16,512,000,000 13,274,000,000 16,913,000,000
Net property, plant and equipment 66,446,000,000 58,331,000,000 45,683,000,000 45,698,000,000 42,269,000,000
Total non-current assets 88,695,000,000 81,163,000,000 56,850,000,000 56,706,000,000 53,601,000,000
Total assets 97,484,000,000 89,772,000,000 73,362,000,000 69,980,000,000 70,514,000,000
Current liabilities 9,256,000,000 6,909,000,000 9,397,000,000 7,395,000,000 7,043,000,000
Non-current liabilities 48,466,000,000 47,889,000,000 33,358,000,000 30,646,000,000 28,490,000,000
Total liabilities 57,722,000,000 54,798,000,000 42,755,000,000 38,041,000,000 35,533,000,000
Retained earnings 36,414,000,000 31,548,000,000 29,391,000,000 34,010,000,000 39,742,000,000
Stockholders equity 39,762,000,000 34,974,000,000 30,607,000,000 31,939,000,000 34,981,000,000

Facts:

  • Cash was $10 billion in 2019.
  • Current assets were $16.9 billion in 2019.
  • Net property, plant and equipment was $42 billion in 2019.
  • Non-current assets were $53.6 billion in 2019.
  • Total assets were $70.5 billion in 2019.
  • Current liabilities were $7 billion in 2019.
  • Non-current liabilities $28 billion in 2019.
  • Total liabilities were $35.5 billion in 2019.
  • Retained earnings were $39.7 billion in 2019.
  • Stockholders equity was $35 billion in 2019.

Explanation

  • Cash represents 15% of total assets.
  • Current assets represent 24% of total assets.
  • Net property, plant and equipment represent 60% of total assets.
  • Non-current assets represent 76% of total assets.
  • Total assets grew 0.76% in one year, 2018 to 2019.
  • Current liabilities represent 20% of the total liabilities.
  • Non-current liabilities represent 80% of the total liabilities.
  • Total liabilities represents 50% of the total liabilities and stockholders equity.
  • Stockholders equity represents 50% of the total liabilities and equity.

Interpretation

The company is liquid and financially healthy. The balance sheet is strong and stable.

 

3. COP INCOME AND MARKET

COP INCOME AND MARKET

2015 2016 2017 2018 2019 TTM
Revenue 29,564,000,000 23,693,000,000 29,106,000,000 36,417,000,000 32,567,000,000 32,567,000,000
EBIT -5,440,000,000 -4,634,000,000 2,360,000,000 8,859,000,000 7,278,000,000 7,278,000,000
Net Income -4,428,000,000 -3,615,000,000 -855,000,000 6,257,000,000 7,189,000,000 7,189,000,000
EBITDA 2,794,000,000 4,777,000,000 5,328,000,000 16,664,000,000 16,392,000,000 16,392,000,000
Market Capitalization 57,709,000,000 62,125,000,000 65,622,000,000 70,976,000,000 70,549,000,000 52,348,000,000
Intrinsic Value 106,536,316,910 184,383,385,632 323,869,764,451 218,122,508,960 115,498,848,453 167,935,607,654

Facts:

  • Revenue was $33 billion in the trailing twelve months.
  • EBIT was $7 billion in the trailing twelve months.
  • Net income was $7 billion the trailing twelve months.
  • EBITDA was $16 billion in the trailing twelve months.
  • Market capitalization was $52.348 billion in the trailing twelve months.
  • Intrinsic value was $168 billion in the trailing twelve months.

Explanation

  • Revenue was down by 11% from 2018 to 2019.
  • EBIT represents 22% of revenue.
  • Net income represents 22% of revenue.
  • EBITDA represents 50% of revenue.
  • Market capitalization was down 28% from 2019 to the trailing twelve months.
  • Intrinsic value was up by more than 200% of the market capitalization.

Interpretation

The earnings of the company shows improvements in the last three years. Bottomline was impressive.

 

4. COP FINANCIAL RATIOS

COP FINANCIAL RATIOS

2015 2016 2017 2018 2019 TTM
Asset turnover (average) 0.28 0.25 0.36 0.51 0.46 0.46
Return on assets % -4.14 -3.86 -1.05 8.73 10.23 10.23
Return on equity % -9.66 -9.67 -2.61 20.01 21.49 21.49
Debt/Equity 0.59 0.75 0.56 0.47 0.42 0.42
Return on invested capital % -5.61 -4.49 -0.47 13.7 15.82 15.82
Interest coverage -6.87 -3.44 -1.38 14.57 13.24 13.24

Facts:

  • Asset turnover was averaging 0.46 in the trailing twelve months.
  • Return on assets was 10.23% in the trailing twelve months.
  • Return on equity was 21.49% in the trailing twelve months
  • Debt/Equity was 0.42 in the trailing twelve months.
  • Return on invested capital was 15.82% in the trailing twelve months.
  • Interest coverage was 13.24 in the trailing twelve months.

Explanation

  • Asset turnover indicates that for every $1 invested in assets, COP generated 46 cents of sales.
  • Return on assets indicates that every $1 invested in assets, the company produced 10.23 cents of net income.
  • Return on equity indicates that for every $1 invested in equity, it generated 21.49 cents of earnings.
  • Debt/Equity means that for every dollar in equity COP has 42 cents in leverage. 
  • Return on invested capital means the percent of return on the invested capital.
  • Interest coverage means the company has the ability to pay its current interest in cash 13 times more on due date.

Interpretation

The company’s financial ratios were impressive. The company is healthy and profitable.

 

5. COP KEY EXECUTIVE COMPENSATION

COP Key Executive Compensation

2014 2015 2016 2017 2018
Key Executive Compensation
Salary 5,653,527 5,671,032 5,818,782 5,868,032 6,046,315
Bonus 0 0 0 0 200,000
Annual other income 0 0 0 0 0
Restricted Stock Award 15,271,390 15,906,476 15,850,148 17,274,323 30,769,372
Securities options 13,426,434 13,892,148 10,602,130 11,492,442 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 8,992,090 6,457,004 6+904518 12,568,554 12,679,435
Other compensation 1,021,157 798,083 590,167 853,753 4,097,176
Total 60,785,066 49,678,375 48,458,456 55,612,133 67,594,977
Ryan M. Lance/Chairman of the Board and CEO
Salary 1,700,000 1,700,000 1,700,000 1,700,000 1,700,000
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 6,116,797 6,630,693 6,607,217 6,993,660 11,006,296
Securities options 5,790,798 5,790,780 4,419,261 4,652,424 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 3,568,640 2,524,160 2,638,400 4,596,800 4,868,800
Other compensation 467,776 301,786 245,437 327,393 372,815
Total 27,577,071 21,339,719 19,212,038 21,848,930 23,405,270
Don E Wallette/Executive VP and CFO
Salary 874,000 874,000 939,550 961,400 985,444
Bonus 0 0 0 0 1
Annual other income 0 0 0 0 0
Restricted Stock Award 1,800,494 1,951,740 1,944,837 2,264,449 3,563,725
Securities options 1,704,492 1,704,798 1,301,146 1,506,438 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,102,988 811,072 911,364 1,720,906 1,763,945
Other compensation 1,333,181 85,414 61,530 109,606 109,403
Total 7,878,314 6,518,635 7,406,824 9,498,081 10,272,497
Alan Hirshberg/EVP, Production Drilling & Projects
Salary 1,085,667 1,096,000 1,178,200 1,205,600 1,205,600
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 3,219,979 2,761,283 2,751,504 3,203,706 5,040,839
Securities options 2,016,711 2,411,712 1,840,685 2,131,596 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,602,444 1,169,651 1,314,282 2,481,728 2,343,084
Other compensation 146,230 159,072 121,457 170,957 156,827
Total 11,747,432 8,787,738 9,468,653 9,632,808 12,970,551
Matthew J. Fox/EVP and COO
Salary 1,241,000 1,241,000 1,241,000 1,241,000 1,241,000
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 2,884,300 3,126,619 3,115,552 3,297,776 5,189,837
Securities options 2,730,645 2,730,348 2,083,774 2,194,020 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 1,872,421 1,324,395 1,384,336 2,625,956 2,554,599
Other compensation 177,039 159,327 91,371 149,519 150,731
Total 9,323,404 8,707,373 8,330,391 9,946,434 9,394,458
Janet L Carrig/Former Senior VP, Legal General Counsel & Corporate ecretary
Salary 752,860 760,032 760,032 760,032 672,333
Bonus 0 0 0 0 0
Annual other income 0 0 0 0 0
Restricted Stock Award 1,249,820 1,436,141 1,431,038 1,514,732 2,383,843
Securities options 1,183,788 1,254,510 957,264 1,007,964 0
LTIP Payout 0 0 0 0 0
Non-Equity Compensation 845,597 627,726 656,136 1,143,164 806,641
Other compensation 96,931 92,484 70,372 96,278 3,281,368
Total 4,258,845 4,324,910 4,040,550 4,685,880 7,144,185
Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary
Salary 241,938
Bonus 200,000
Annual other income 0
Restricted Stock Award 3,583,832
Securities options 0
LTIP Payout 0
Non-Equity Compensation 342,366
Other compensation 26,031
Total 4,407,016

Facts:

  • The total key executive compensation was $67.594,977 in 2018.
  • Ryan M. Lance, Chairman of the Board and CEO compensation was $23,405,270 in 2018.
  • Don E. Wallette, EVP and CFO compensation was $10,292,497 in 2018.
  • Alan Hirshberg, EVP Production Drilling and Project compensation was $12,970,551 in 2018.
  • Mathew J. Fox, EVP and COO compensation was $9,394,458 in 2018.
  • Janet L. Carrig, Former Senior VP, Legal General Counsel & Corporate Secretary compensation was $7,144,185 in 2018.
  • Kelly Brunetti Rose/Senior VP, Legal General Counsel & Corporate Secretary compensation was $4,407,016 in 2018.

Explanation

  • The total key executive compensation represents 0.94% of the net income.
  • CEO compensation represents 35% of the total key executive compensation.
  • CFO compensation represents 15% of the total key executive compensation.
  • EVP Production Drilling and Project compensation represents 19% of the total key executive compensation.
  • EVP and COO compensation represents 14% of the total key executive compensation.
  • Former Senior VP, Legal General Counsel & Corporate Secretary compensation represents 11% of the total key executive compensation.
  • Senior VP, Legal General Counsel & Corporate Secretary compensation represents 7% of the total key executive compensation.

Interpretation

The key executive compensation was  less than 1 percent which is fair enough for the compensation of the executives.

 

6. COP LOBBYING AND CONTRIBUTIONS

COP LOBBYING AND CONTRIBUTIONS

Period Amount Period Amount
2020 1,473,459 2008 8,459,053
2019 4,870,000 2007 4,089,568
2018 3,080,000 2006 2,038,291
2017 3,010,000 2005 5,218,084
2016 2,498,000 2004 2,670,438
2015 3,135,583 2003 1,380,000
2014 3,969,840 2002 1,157,000
2013 4,242,353 2001 878,639
2012 3,863,736 2000 1,235,159
2011 20,557,043 1999 1,340,812
2010 19,626,382 1998 10,000
2009 18,069,858

Explanation

ConocoPhillips has been spending annual lobbying and contributions since 1998. The amount varies annually. A Note from OpenSecrets is quoted as follows:

“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.”

Source: OpenSecret.org Center for Responsive Politics

 

7. COP FINANCIAL STRENGTH

COP FINANCIAL STRENGTH

DATA

Working capital 9,870,000,000
Total assets 70,514,000,000
Sales 32,567,000,000
EBIT 7,278,000,000
Market value of equity $52,348,000,000
Book value of total liabilities 35,533,000,000
Retained earnings 39,742,000,000

CALCULATION

Ratio Score Result
A – Working Capital / Total Assets 0.1400 1.20 0.17
B – Retained Earnings / Total Assets 0.56 1.40 0.79
C – EBIT / Total Assets 0.10 3.30 0.34
D – Market Value of Equity / Book Value of Total Liabilities 1.47 0.60 0.88
E – Sales / Total Assets 0.46 1.0 0.46
Z-Score 2.64

 

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

The Z-Score of COP was 2.64.  According to Dr. Edward Altman a grading scale of 1.8 – 3.0 is more likely to declare bankruptcy. The figures used above are based on the latest financial reports. The Altman score weights different profitability and liquidity metrics to arrive at the overall score. This measurement is not calculated for the purpose of estimating the company will declare bankruptcy but it helps in comparing other companies that have become insolvent.

Hence, this measurement categorized the profitability or return on investment, liquidity, leverage and the efficiency in operating.

Conclusion

ConocoPhillips has been in the industry for more than a century and has been managed successfully. The company is stable and has a strong balance sheet and is  profitable. 

CITATION

http://www.conocophillips.com/

https://www.opensecrets.org/federal-lobbying/clients/summary?cycle=2019&id=D000000303

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

Researched and written by Criselda

Chevron Corp (CVX) Extended Graph Analysis

February 20th, 2020 Posted by Extended Analysis No Comment yet

Company Profile

CVX logo

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

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

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

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

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

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

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

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

Note:

Research Reports can be found under the company tab.