Movement in Chevron's Key Financial Statements Items

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Table 1 demonstrates the growth pattern of certain Chevron Corporation fundamentals over the last three years. As seen in figure 1 and table 1 below, the company's revenues have decreased, resulting in a decrease in net profits. Net revenues fell by 7% to $211,970 million in 2014, from $ 228,848 million in 2013, before falling by 35% to $138,477 million in 2015. Net profits fell from $21,423 million in 2013 to $19,241 million in 2014 (a 10% decrease), and then fell another 76% in 2015 to $4,587 million. Using the net profit margin, which narrows the focus on profitability by indicating the firm_x0092_s ability to realize revenues as well as its effectiveness in cost control, the efficiency of Chevron Corporation in controlling expenses was relatively the same in 2013 and 2014 leading to a net margin of around 9%. These results could be attributed to the company_x0092_s consistency in capital discipline and control over the operating costs across the business cycle (Chevron Corporation 1). However, the company performed dismally in 2015 to record a net profit margin of 3.31%.

The decline in the sales revenues was attributed to the difficult market conditions. Primarily, the drop in sales was due to the decline in the crude oil prices, which has been significantly falling since mid-2014 (Chevron Corporation 10). In 2015, the company_x0092_s Chairman and CEO, John Watson, stated that the low commodity price made the year a challenge for the firm in particular and the whole oil and gas industry in general (Chevron Corporation 2). The net incomes were also affected by the lower crude oil and natural gas prices as well as the increase in the operating costs due to repair and maintenance activities, increased depreciation and impairments (Chevron Corporation17). The effects of the decline in the net profits are also shown by the drop in the return on total assets ratio and the earnings per share as indicated in table 1 below.

The current assets were dropping whereas the fixed assets were rising, leading to an overall rise in the total assets ($203,503 million, $223,794 million, and $230,756 million in 2013, 2014 and 2015 respectively). As indicated below, non-current liabilities were increasing ($70,308 million in 2013, $77,909 million in 2014, and $85,753 million in 2015). The current liabilities had a sloping trend - $33,018 million in 2013, $31,926 million in 2014 and $26,464 million in 2015. The increase in assets and debts are further explained by the debt ratio, which was computed by expressing the entire liabilities value as a proportion of gross assets. These increases were due to the company_x0092_s capital investment program as it was undertaking several large projects (Chevron Corporation 20).

Table 1. 2013-2015 performance of Chevron Corporation

Amounts in $ millions, except EPS and ratios 2013 2014 2015 Sales 228,848.00 211,970.00 138,477.00 Net income 21,423.00 19,241.00 4,587.00 Net profit margin 9.36% 9.08% 3.31% Current assets 50,250.00 42,232.00 35,347.00 Fixed assets 203,503.00 223,794.00 230,756.00 Total assets 253,753.00 266,026.00 266,103.00 Current liabilities 33,018.00 31,926.00 26,464.00 Non-current liabilities 70,308.00 77,909.00 85,753.00 Total liabilities 103,326.00 109,835.00 112,217.00 current ratio 1.52 1.32 1.34 Debt ratio 40.72% 41.29% 42.17% Return on assets 8.44% 7.23% 1.72% Earnings per share 11.18 10.21 2.46



Figure 1. Sales and net incomes

Source: Student, 2017

Stocks_x0092_ Trend

Figure 2 below indicates the share price movement for Chevron and its two chosen competitors, BP, Plc. and Exxon. The prices captured are for two days a week (Tuesdays and Thursdays) and which have also been presented in quarters. Generally, the prices were rising, and could be attributed to improvement in the economic environment through the rise in the prices of crude oil. _x000c_

Figure. Share price trend

Source: Student, 2017

Table 2. Share prices during the 1st and 2nd quarters, 2016

Date Chevron Exxon BP Plc. Date Chevron Exxon BP Plc. 1/5/2016 84.97679 74.77113 28.1849 4/5/2016 88.9932 79.39997 26.92034 1/7/2016 78.72751 72.96216 26.81803 4/7/2016 91.02908 79.5545 27.10645 1/12/2016 77.9025 71.9763 26.10726 4/12/2016 93.64117 81.46682 29.03265 1/14/2016 81.05084 75.72827 28.09378 4/14/2016 94.09252 82.50991 28.7721 1/19/2016 77.29559 73.12487 26.3533 4/19/2016 96.51253 83.26325 29.55375 1/21/2016 76.85938 70.92346 26.84537 4/21/2016 97.37682 83.82342 29.53514 1/26/2016 79.77064 73.412 28.01177 4/26/2016 98.23151 84.63471 31.16358 1/28/2016 81.47757 73.68957 29.0597 4/28/2016 98.33715 85.02104 31.16358 1/29/2016 81.99914 74.51271 29.4971 5/3/2016 97.3 85.0983 30.29818 2/2/2016 77.03955 71.39245 26.44442 5/5/2016 97.39603 85.0307 29.93794 2/4/2016 80.406 76.40783 27.89331 5/10/2016 97.25198 86.91404 30.03274 2/9/2016 78.63268 77.34278 26.38063 5/12/2016 98.06826 87.33283 30.20338 2/11/2016 78.69906 76.87918 25.71995 5/17/2016 97.77539 87.19648 30.54466 2/16/2016 81.44505 78.44381 27.04131 5/19/2016 96.90196 87.76137 30.31714 2/18/2016 83.28888 79.63176 27.7113 5/24/2016 97.23192 87.33283 30.18442 2/23/2016 81.54109 78.45347 26.98548 5/26/2016 98.50325 87.45945 30.9049 2/25/2016 81.91561 79.20681 26.6691 5/31/2016 98.01801 86.69977 29.7673 3/1/2016 82.71268 78.50176 27.57172 6/2/2016 97.56188 86.22254 29.88106 3/3/2016 84.05713 79.58348 28.72558 6/7/2016 100.2695 88.34573 31.35046 3/8/2016 85.21912 79.80561 27.98115 6/9/2016 99.77457 88.30677 31.32202 3/10/2016 90.21281 79.371 27.75782 6/14/2016 98.28974 88.07302 29.32174 3/15/2016 90.52971 79.98912 27.58102 6/16/2016 98.08594 88.84243 30.36454 3/17/2016 93.04576 81.22537 29.34904 6/21/2016 100.1919 89.14435 32.37431 3/22/2016 91.71091 81.24469 28.79072 6/23/2016 101.3564 89.40732 32.82935 3/24/2016 91.0867 81.10947 28.30684 6/28/2016 98.6294 88.54052 31.51163 3/29/2016 91.53805 81.64067 28.2417 6/30/2016 101.7349 91.29675 33.66359 3/31/2016 91.61488 80.7328 28.08351

Table 3. Share prices during the 3rd and 4th quarters, 2016

Date Chevron Exxon BP Plc. Date Chevron Exxon BP Plc. 7/5/2016 100.5121 90.59551 34.03331 10/4/2016 99.31558 84.71831 34.44256 7/7/2016 100.0075 90.53708 33.55931 10/6/2016 100.208 85.49428 34.70319 7/12/2016 103.6274 92.47521 34.9908 10/11/2016 101.0514 86.18184 34.53909 7/14/2016 103.5497 92.47521 34.659 10/13/2016 98.84485 85.0228 34.44256 7/19/2016 102.9092 92.00773 34.15655 10/18/2016 99.82555 85.22907 34.73215 7/21/2016 102.2784 91.40388 33.97643 10/20/2016 99.904 85.66126 34.79972 7/26/2016 99.64841 89.14435 32.79143 10/25/2016 98.82523 85.17996 34.79007 7/28/2016 98.78468 87.84902 32.22263 10/27/2016 97.99163 85.3764 34.75146 8/2/2016 96.64963 84.77138 31.71071 11/1/2016 104.425 82.16448 32.92701 8/4/2016 97.42602 85.19992 31.8555 11/3/2016 103.3561 82.1743 32.66637 8/9/2016 98.32856 86.38811 32.22233 11/8/2016 105.2194 84.53698 32.89909 8/11/2016 98.4062 85.17996 32.47331 11/10/2016 105.7098 86.26122 33.3511 8/16/2016 99.59018 86.35865 33.02354 11/15/2016 106.8572 86.0333 33.02683 8/18/2016 101.5516 87.33107 33.44828 11/17/2016 107.0949 84.45771 32.91874 8/23/2016 99.71767 86.1622 32.94631 11/22/2016 109.5712 85.89457 33.94069 8/25/2016 99.92362 85.90682 33.03319 11/25/2016 109.9476 86.33058 33.67538 8/30/2016 99.73728 85.96575 32.91735 11/29/2016 108.3033 85.12164 32.93839 9/1/2016 98.27604 85.29782 32.49261 12/1/2016 112.2159 86.44949 34.77594 9/6/2016 100.4532 86.9971 33.48689 12/6/2016 111.6909 86.76659 34.95282 9/8/2016 102.1106 87.46858 33.86337 12/8/2016 114.078 87.51971 35.56206 9/13/2016 97.51109 83.69677 32.33816 12/13/2016 116.3067 91.74111 36.15165 9/15/2016 97.57974 83.56908 32.44435 12/15/2016 115.9402 90.06642 35.22796 9/20/2016 95.81448 81.07419 31.92308 12/20/2016 116.8317 89.61059 35.88634 9/22/2016 98.05048 82.05643 33.0718 12/22/2016 117.6439 90.0466 36.26957 9/27/2016 97.06978 81.76176 32.44435 12/27/2016 117.0991 89.92769 36.4661 9/29/2016 99.31558 84.92457 33.84406 12/29/2016 116.7029 89.53131 36.75107 _x000c_Financial advisor_x0092_s Recommendations on Chevron Corporation's stock

Figure 2 below shows the financial analysts_x0092_ recommendations over Chevron Corporation_x0092_s stock. According to The Financial Times Ltd, the consensus recommendation of 27 polled investment analysts stated that the firm will outperform the market. Over a year ago, the analysts recommended investors to hold. There are also analysts advising investors to purchase this stock. It is clear that this stock is a good investment opportunity as there is no single analyst recommending its disposal, and the potential investors can commit their money.



Figure 2. Recommendations on Chevron Corporation's stock

Source: The Financial Times Ltd

_x000c_Works Cited

Chevron Corporation . 2015 Annual report. Financial report. San Ramon, CA: Chevron Corporation, 2015.

Chevron Corporation. 2014 annual report. Financial report. San Ramon, CA: Chevron Corporation, 2014.

The Financial Times Ltd. 2017. https://markets.ft.com/data/equities/tearsheet/forecasts?s=CVX:NYQ. Accessed 30 March 2017

_x000c_Appendices

Appendix I. Consolidated Income Statements (2013, 2014 and 2015)



_x000c_Appendix II. Consolidated Statement of Financial Position (2014 and 2015)



_x000c_Appendix III. Consolidated Sattement of Financial Position (2013 and 2014)



November 09, 2022
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