Question
Evaluate the financial performance of ExxonMobil and Chevron for the fiscal year 2019 using the following data: ($ millions) ExxonMobil Chevron Net sales $290,212 $159,460
($ millions) | ExxonMobil | Chevron |
Net sales | $290,212 | $159,460 |
Cost of goods sold | $168,789 | $98,734 |
Gross profit | $121,423 | $60,726 |
Operating expenses | $50,900 | $30,470 |
Operating income | $70,523 | $30,256 |
Interest and other (income) expense | $2,500 | $1,800 |
Earnings before provision for income taxes | $68,023 | $28,456 |
Provision for income taxes | $20,407 | $8,260 |
Net earnings | $47,616 | $20,196 |
Required: a. Compute the gross profit margin, operating profit margin, and net profit margin for each company. b. Calculate the return on equity (ROE) and return on assets (ROA) for each company. Assume ExxonMobil's equity is $130,000 million and total assets are $360,000 million, while Chevron's equity is $115,000 million and total assets are $300,000 million. c. Determine the debt-to-equity ratio for each company. d. Compare the profitability of both companies based on your calculations. e. Perform a trend analysis for net earnings by comparing 2018 and 2017 data, which are $45,320 million and $40,220 million for ExxonMobil and $22,450 million and $18,900 million for Chevron, respectively.
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