Financial Analysis of the Exxon Mobil Corp.

Stock ticker symbol: XOM, NASDAQ

Address: 1201 Airport Fwy, Irving, TX 75062, USA

Company phone number: +1 972-579-3840

Submitted by: Ashiq Shaik

Contents

PART 1, COMPANY OVERVIEW................................................................................................4

a. Brief description of the company............................................................................................4
b. Company history.....................................................................................................................4
c. Organization............................................................................................................................4
d. Main products and services....................................................................................................4
e. Geographic area of operations................................................................................................5
f. Recent developments...............................................................................................................5
PART 2, FINANCIAL OVERVIEW..............................................................................................6
a. Sales and Income Record......................................................................................................6
I. Graph Of Sales & Net Income, FY 2018 - 2022...............................................................6
II. Comments: On Sales & Net Income.............................................................................6
b. Expense Distribution............................................................................................................7
I. Pie Chart Of Expenses, FY 2022......................................................................................7
II. Comments: Comment on the company’s expense distribution.....................................7
c. Assets Distribution................................................................................................................8
I. PIE CHART OF ASSETS, Year-End FY 2022................................................................8
II. Comments on Assets Distribution.................................................................................9
c. Capital Structure.......................................................................................................................10
a) Capital Structure Pie Chart, Year-End FY 2022.........................................................10
b) Comments: Comment On The Company’s Capital Structure.....................................10
PART 3, RATIO ANALYSIS:......................................................................................................11
a) LIQUIDITY:.......................................................................................................................11
Current Ratio:........................................................................................................................11
Quick Ratio:...........................................................................................................................11
Comments On The Company’s Liquidity:............................................................................11
b) ASSET MANAGEMENT...............................................................................................12
Total Asset Turnover:............................................................................................................12
Average Collection Period:....................................................................................................12
Comments On The Company’s Asset Management:.............................................................12
c) DEBT MANAGEMENT:...................................................................................................13
Total Debt to Total Assets:....................................................................................................13
Times Interest Earned:...........................................................................................................13
 Comments On The Company’s Debt Management:..............................................................13
d) PROFITABILITY:..........................................................................................................14
Net profit Margin:..................................................................................................................14
Return on Assets:...................................................................................................................14
Return on Equity:...................................................................................................................14
Modified Du Pont Equation, FY 2022:..................................................................................14
Comments On The Company’s Profitability:........................................................................14
e) MARKET VALUE RATIOS:............................................................................................15
PE Ratio:................................................................................................................................15
Market to Book Ratio:...........................................................................................................15
Comments On The Company’s Market Value Ratios:..........................................................15
PART 4, CONCLUSIONS AND RECOMMENDATIONS.........................................................16
Conclusion.................................................................................................................................16
Recommendations......................................................................................................................18
References......................................................................................................................................20
 PART 1, COMPANY OVERVIEW

a. Brief description of the company

The Exxon Mobil Firm, or simply ExxonMobil, is a U.S.-based international oil and gas

corporation. It is a publicly listed company that is involved in oil and gas exploration,

production, and distribution on a global scale, making it one of the biggest enterprises in the

world.

b. Company history

In 1999, two of the biggest oil firms in the world, Exxon Corporation and Mobil Corporation,

combined to establish ExxonMobil. Both businesses may trace their roots back many decades.

John D. Rockefeller established the Standard Oil Company in 1870, from which Exxon was

subsequently spawned. Mobil's precursor, the Socony-Vacuum Oil Company, was established in

1911. As a result of the merger, we now have a global energy giant that has dominated the oil

and gas industry for decades (Mbat et al., 2013).

c. Organization

There is little central authority at ExxonMobil. Many commercial and regional departments

manage the corporation. It has a lengthy track record of achievement in both downstream

refining and selling and upstream exploration and production. The company's activities may be

classified into three broad categories: upstream, downstream, and chemical (Priyadi et al., 2023).
d. Main products and services

ExxonMobil, an integrated oil & gas business, is responsible for exploration, production,

refining, and marketing. The primary products include crude oil, natural gas, jet fuel, gasoline,

diesel, lubricants, and petrochemicals. The company sells to manufacturers, large businesses, and

merchants equally.

e. Geographic area of operations

ExxonMobil is a multinational corporation with operations in several countries. It does

considerable business on all six continents, including North America, Europe, Asia, and

Australia. Customers from all around the world may acquire the company's goods owing to its

global distribution network.

f. Recent developments

ExxonMobil recently invested in technology and research to improve energy efficiency and

reduce emissions. The company has been seeking opportunities in renewable energy sources, as

well as expanding its presence in emerging areas. As part of their commitment to tackling

climate change challenges and cutting greenhouse gas emissions, ExxonMobil has participated in

carbon capture and storage efforts (Weston, 2002).

 PART 2, FINANCIAL OVERVIEW

a. Sales and Income Record

2018 2019 2020 2021 2022

Sales (USD) $279,332,000,000 $255,583,000,000 $178,574,000,000 $276,692,000,000 $398,675,000,000
Percent Change in - -8.50% -30.13% 54.88% 44.08%
Sales
Net Income $20,840,000,000 $14,340,000,000 -$22,440,000,000 $23,040,000,000 $55,740,000,000
(USD)
Percent Change in - -31.23% -256.31% 202.57% 141.61%
Net Income

I. Graph Of Sales & Net Income, FY 2018 - 2022

Sales, Net Income

Sales Net Income
450000000000
400000000000
350000000000
300000000000
250000000000
200000000000
150000000000
100000000000
50000000000

2018 2019 2020 2021 2022

-50000000000

II. Comments: On Sales & Net Income

Sales data has changed over time. Sales fell between 2018 and 2020. Sales

rebounded in 2021 and 2022. The trend predicts the company will struggle and recover.

Net income has fluctuated throughout time. From 2018 through 2019, net income

decreased, then plummeted in 2020, leaving a negative net income. However, net profits

rose dramatically in 2021. Net income increased significantly again in 2022. After its
 2020 losses, the company grew significantly. The graph compares sales to net income.

Sales typically increase net income, whereas lower sales decrease it. Sales performance

affects profitability. The company's sales and net income increased significantly from

2021 to 2022. This positive trend suggests that the firm utilized successful techniques to

enhance sales and profitability, resulting in great financial performance.

b. Expense Distribution

Major Expense Categories Amount

Cost of Goods and Services $ 271,568,000,000.00

Selling, General and Administrative Expenses $ 10,577,000,000.00

Exploration Expenses $ 1,025,000,000.00

Taxes Other Than Income Taxes $ 27,919,000,000.00

I. Pie Chart Of Expenses, FY 2022

0% 9%
3%

87%

Cost of Goods and Services

Selling, General and Administrative Expenses
Exploration Expenses
Taxes Other Than Income Taxes

II. Comments: Comment on the company’s expense distribution.

Cost of Goods and Services $271,568,000 is the company's biggest expense. This

demonstrates that the company's resources go to making and buying goods and services.
 It might encompass manufacturing, production, and raw materials. Selling, General, and

Administrative Expenditures the business's second-largest expenditure category is

$10,577,000,000,000. Rent, utilities, administrative labor, marketing, sales, and other

running expenses are common. Exploration costs $1,025,000. New resource discoveries

and corporate development frequently incur these expenses. When addressing exploration

expenditures, ExxonMobil may incur charges for identifying and appraising prospective

oil and gas deposits. The company's tax expenses are $27,919,000,000. This includes

commercial property, excise, sales, and other non-income tax obligations.

c. Assets Distribution

Assets Amount

Cash $31,090,100

Accounts receivable $5,754,500

Inventory $1,820,500

Fixed Assets $3,606,800

Other Assets $1,267,600

I. PIE CHART OF ASSETS, Year-End FY 2022

 Amount

Cash Accounts receivable Inventory

Fixed Assets Other Assets

II. Comments on Assets Distribution

By FY 2022, the company's assets were separated into various categories.

$31,090,100 in cash shows liquidity. Client invoices totaled $5,754,500 in accounts

receivable. Raw materials and finished goods totaled $1,820,500. Fixed-asset investments

totaled $3,606,800. Fixed assets include real estate, equipment, and other company

necessities. Unspecified non-current assets totaled $1,267,600. The firm balances short-

term investments in fixed assets, long-term investments in inventory, and consumer

receivables. These resources keep the firm running and generate revenue (Research,

2023).

Asset allocation by the corporation shows a strategic approach to keeping a

balance between short-term investments, operational resources, and liquidity. The firm

may sustain its existing operations, satisfy short-term commitments, and promote chances

for future development and value creation by making sure there are enough cash reserves,

managing accounts receivable, keeping inventory, and investing in fixed assets.

c. Capital Structure

Capital Structure Amount

Current Liabilities 69,045,000,000

Long-term & Other 97,549,000,000

Liabilities

Preferred Stock (if any) -

Common Equity 202,473,000,000

Debt Maturity Schedule Total 14,700,000,000

a) Capital Structure Pie Chart, Year-End FY 2022

Current Liabilities Long-term & Other Liabilities

Preferred Stock (if any) Common Equity
Debt Maturity Schedule Total

b) Comments: Comment On The Company’s Capital Structure.

The firm's FY 2022 capital structure may be studied using the aforementioned

data. Current liabilities, totaling $69,045,000, indicate the company's near-term

obligations. Liabilities include payables, accrued expenditures, and imminent financial

 obligations. Long-term and other debts total $97,549,000,000. These loans take years to

repay. Long-term obligations include debt, capital leasing contracts, provisions, and

deferred taxes. No preferred stock information means the firm has no outstanding

preferred shares. Common stockholders possess $202,473,000,000. It includes paid-in

capital, reserves, cumulative comprehensive income/losses, retained profits, or

accumulated deficit. Common equity reflects the company's assets after commitments.

Debt maturity schedule totals $14,700,000,000. This figure determines the company's

debt repayment obligations.

PART 3, RATIO ANALYSIS:

a) LIQUIDITY:
FY 2021 FY 2022
Current Ratio:

XOM 1.044 1.414

SHEL 1.3477 1.3679

Quick Ratio:

XOM 1.02 1.06

SHEL 1.03 1.09

Comments On The Company’s Liquidity:

XOM and SHEL have steady liquidity in FY 2021 and FY 2022. Both XOM and SHEL have

current ratios over 1, suggesting that their current assets could pay their short-term liabilities.

SHEL's current ratio was 1.35, while XOM's rose from 1.044 to 1.414.

The acid-test ratio, or fast ratio, excludes inventories from current assets to measure liquidity

more conservatively. In FY 2021 and FY 2022, XOM and SHEL had fast ratios over 1, showing

they had enough liquid assets to satisfy their short-term obligations without inventory. XOM's
fast ratio rose from 1.02 to 1.06, and SHEL's from 1.03 to 1.09.

XOM and SHEL have high liquidity based on their current and quick ratios, suggesting they can

fulfill their short-term financial commitments and handle unforeseen financial issues. It shows

these organizations can run smoothly and handle short-term cash flow volatility. To make a more

educated liquidity choice, it is important to consider additional liquidity indicators and company-

specific considerations.

b) ASSET MANAGEMENT
FY 2021 FY 2022
Total Asset Turnover:

XOM 1.13 0.85

SHEL 0.6743 0.8717

Average Collection Period:

XOM 35 30
SHEL 32 25

Comments On The Company’s Asset Management:

XOM and SHEL have different asset management efficiency in FY 2021 and FY 2022.

Total Asset Turnover assesses a company's total asset revenue efficiency. In FY 2021, XOM

produced $1.13 in revenue per dollar of total assets. In FY 2022, the Total Asset Turnover

dropped to 0.85, implying revenue generating efficiency declined. SHEL's FY 2021 Total Asset

Turnover was 0.6743, indicating weaker revenue generating efficiency. In FY 2022, SHEL's

Total Asset Turnover increased to 0.8717, indicating a strong trend in asset utilization to produce

income.

Average Collection Period is the average number of days a firm takes to collect client

payments. The shorter the average collection time, the faster the firm collects cash from clients.

XOM's average collection duration dropped from 35 days in FY 2021 to 30 days in FY 2022,
indicating increased client payment collection. In FY 2021, SHEL had an average collecting

period of 32 days, which improved to 25 days in FY 2022.

SHEL improved its overall asset turnover in FY 2022, whereas XOM declined. In FY

2022, both corporations collected payments more efficiently. Since asset management differs

between industries and company models, it is important to include other elements and study the

industrial environment to fully comprehend it.

c) DEBT MANAGEMENT:
FY 2021 FY 2022
Total Debt to Total Assets:

XOM 0.481 0.451

SHEL 0.565 0.566

Times Interest Earned:

XOM 28.3 89.7

SHEL 6.9 20.2

Comments On The Company’s Debt Management:

Both XOM and SHEL exhibited trends in debt management and interest coverage.

A company's debt-to-asset ratio shows how much debt it has. XOM's Total Debt to Total

Assets ratio dropped from 0.481 to 0.451 in FY 2022. XOM used less debt to fund its assets in

the later year. SHEL had a Total Debt to Total Assets ratio of 0.565 in FY 2021 and 0.566 in FY

2022.

Times Interest Earned ratio measures a company's capacity to pay its interest

expenditures with its EBIT (EBIT). XOM's Times Interest Earned ratio rose from 28.3 to 89.7 in

FY 2022. XOM's interest-coverage capability increased dramatically. SHEL's FY 2021 Times

Interest Earned ratio was 6.9, while FY 2022's was 20.2, showing stronger interest coverage.

In FY 2022, XOM and SHEL improved debt management. XOM's debt-to-asset ratio
decreased, and its interest coverage grew, suggesting a stronger financial position and lower

financial risk. Despite a constant debt-to-assets ratio, SHEL improved interest coverage.

Companies must manage debt well to avoid financial trouble and boost investor trust. For

sustainable debt management and educated financial choices, these variables must be monitored

over time.

d) PROFITABILITY:
FY 2021 FY 2022
Net profit Margin:

XOM 13.98% 8.33%

SHEL 7.37% 10.95%

Return on Assets:

XOM 15.10% 6.80%

SHEL 5.101% 9.677%

Return on Equity:

XOM 28.58% 13.67%

SHEL 11.766% 22.261%

Modified Du Pont Equation, FY 2022:

XOM SHEL
Net Profit Margin 8.33% 10.95%
Total Asset Turnover 0.85 0.872
Equity Multiplier 1.823 2.300

Comments On The Company’s Profitability:

XOM and SHEL saw profitability swings in FY 2021 and FY 2022.

Net Profit Margin is the proportion of sales that becomes net income after costs. XOM's

net profit margin dropped from 13.98 percent to 8.33 percent in FY 2022. XOM's net income

dropped, indicating weaker profitability. SHEL's net profit margin rose from 7.37 percent in FY

2021 to 10.95 percent in FY 2022, indicating a good trend in profitability.

 Return on Assets (ROA) measures a company's profitability. XOM's ROA dropped from

15.10 percent to 6.80 percent in FY 2022. XOM used its assets less efficiently to create revenues.

SHEL had a ROA of 5.101 percent in FY 2021 and 9.677 percent in FY 2022, indicating

increased asset utilization and profitability.

ROE gauges shareholder equity return. In FY 2022, XOM's ROE fell to 13.67 percent

from 28.58 percent in FY 2021. SHEL had a ROE of 11.766 percent in FY 2021 and 22.261

percent in FY 2022, indicating better profitability and shareholder returns.

The Modified Du Pont Equation breaks ROE into net profit margin, total asset turnover,

and equity multiplier. In FY 2022, XOM had an equity multiplier of 1.823, an 8.33% net profit

margin, and a 0.85 total asset turnover. SHEL had a 10.95% net profit margin, 0.872 total asset

turnover, and 2.300 equity multiplier. The Modified Du Pont Equation shows how several

variables affect firm profitability.

In FY 2022, SHEL outperformed XOM in major profitability parameters. Investors and

stakeholders must regularly monitor profitability to analyze a company's performance and

development prospects. Industry-specific indicators will reveal the firm’s profitability and

financial health.

e) MARKET VALUE RATIOS:

FY 2021 FY 2022
PE Ratio:

XOM 10.75 8.18

SHEL 8.19 4.99

Market to Book Ratio:

XOM 1.04 2.19

SHEL 0.93 1.03
Comments On The Company’s Market Value Ratios:

Market Worth Ratios reveal a company's market value and growth possibilities.

PE Ratio relates market price per share to earnings per share. Stronger PE ratios indicate

higher growth forecasts since investors are ready to pay more per dollar in profits. XOM's PE

ratio dropped from 10.75 to 8.18 in FY 2022. This reduction suggests investors paid less for

XOM's profits in the later year. SHEL had a PE ratio of 8.19 in FY 2021 and 4.99 in FY 2022,

reflecting a similar pattern of lowering market expectations.

Market-to-Book Ratio compares a company's stock price to its book value (net asset

value per share). A score greater than 1 indicates that the market values the company's assets

higher than its book value, which may imply growth potential or unreported intangible assets.

XOM's Market to Book Ratio rose from 1.04 to 2.19 in FY 2022. The market valued XOM's

assets more than their book value in the later year. SHEL had a Market to Book Ratio of 0.93 in

FY 2021 and 1.03 in FY 2022, reflecting a similar pattern of higher perceived value.

Over two years, XOM and SHEL's Market Value Ratios changed significantly. Both

firms' lower PE ratios signal investors' profits growth forecasts slowed. However, the rise in

Market to Book Ratio suggests that the market valued both firms' assets more than their book

value, either due to better market circumstances or enhanced growth prospects. These ratios help

investors evaluate a company's stock and returns. To make smart investing choices, additional

criteria and a thorough investigation are needed.

PART 4, CONCLUSIONS AND RECOMMENDATIONS

Conclusion
XOM should prioritize raising Total Asset Turnover and the Average Collection Period

in order to get the most out of their assets and generate the most income. Methods of achieving
this goal include making astute financial decisions, streamlining inventory management, and

speeding up the collecting process.

Second, long-term financial success requires that XOM reverse its falling net profit

margin, return on assets, and return on equity. Some examples of this include reducing expenses,

looking into new markets with larger profit margins, and capitalizing on other sources of growth.

Reducing Debt Ratios Both companies should maintain effective debt management and

work to reduce their overall debt to total assets ratios. Debt reduction may improve financial

agility and reduce exposure to risk.

Since the energy and consumer goods sectors are constantly evolving, both companies

should consider diversification and innovation initiatives. This may include exploring new

product or market prospects for SHEL, as well as investing in sustainability and renewable

energy initiatives for XOM.

5. Proactively Disseminate Strategy-Related Initiatives Sustainability, technological

adoption, and market expansion are all areas where the two companies might benefit from

coordinating their efforts. Communicating openly with stakeholders may help win over investors'

confidence and support.

6. Measure your progress toward your financial and operational goals by conducting

regular performance evaluations. As a consequence, managers will be alerted to opportunities for

growth and may swiftly adjust their approach.

7. Keeping an eye on external factors entails tracking the state of the market, the

regulatory environment, and the industry as a whole for any signs of change that might have an
impact on the company's bottom line. Addressing external challenges head-on may help mitigate

risks and capitalize on opportunities.

In sum, both ExxonMobil and SHEL are stable companies with significant growth

potential. With the help of financial research and strategic recommendations, these companies

may boost their financial performance and solidify their positions as market leaders in their

respective industries. Long-term success requires management to be vigilant and flexible in the

face of a dynamic business climate.

Recommendations
To get the most out of their assets and income, XOM should prioritize boosting their

Total Asset Turnover and Average Collection Period. Methods that may help you reach your

goal include making smart financial decisions, improving your inventory management, and

working faster to collect payments.

Second, XOM's long-term financial performance depends on reversing the company's

falling net profit margin, return on assets, and return on equity. Some ways to achieve this goal

include reducing expenses, investigating untapped areas with better profit margins, and using

non-traditional growth opportunities.

Reduced Debt-to-Income Ratios Maintaining sound debt management and working to

reduce their respective debt-to-assets ratios are priorities for both companies. Debt reduction

may improve financial agility and reduce vulnerability.

Given the dynamic nature of both the energy and consumer goods markets, it would be

wise for both companies to consider expanding their product offerings and actively seeking out
new areas of innovation. This may include, for example, XOM's funding of sustainability and

renewable energy initiatives and SHEL's exploration of untapped markets.

5. Proactively Market Strategy-Related Projects It is possible that the two companies may

advance together in the areas of sustainability, technological adoption, and market expansion via

a concerted effort. Gaining the confidence and backing of financiers might be aided by candid

communication with all relevant parties.

Perform frequent performance evaluations to monitor your progress toward your financial

and operational goals. This will allow managers to be aware of growth opportunities and make

swift adjustments to their approach.

Seven, keeping an eye on external factors entails maintaining tabs on the state of the

market, the regulatory environment, and the business sector as a whole for any signs of change

that might affect the company's bottom line. Taking on external challenges head-on may help

reduce risk and maximize opportunities.

In sum, both ExxonMobil and SHEL are stable companies with substantial growth

potential. Companies in these industries may benefit from financial analysis and strategic

counsel to boost profits and keep them at the forefront of their fields. In order to succeed overall,

management must keep an eye on, and respond to, the changing conditions of the business world.
References

Mbat, D., Ibok, E., & Daniel, E. (2013). Exxon-Mobil and Corporate Social Responsibility in
Akwa Ibom State, Nigeria: Past and Present. Public Policy and Administration Research,
3(3), 21-28.
Priyadi, U., Atmadji, E., & Mochamad Ali Imron, T. (2023). Exploring Corporate Social
Responsibility: A Phenomenological Study of Exxon Mobil CEPU CSR Exploration.
Journal of Survey in Fisheries Sciences, 2058-2070.
Research, Z. E. (2023). General Mills (XOM) Gains As Market Dips: What You Should Know.
https://finance.yahoo.com/news/general-mills-XOM-gains-market-220024692.html
Weston, J. F. (2002). The exxon-mobil merger: An archetype. Journal of Applied Finance, 12(1),
69-88.