QUESTION: Would you recommend an individual invest in this company? Expand each point to explain reasons why this would be a risk for an investor.
QUESTION: Would you recommend an individual invest in this company? Expand each point to explain reasons why this would be a risk for an investor.
1. Sales have decreased by 0.09 % as compared to last year.
2. All expenses have increased as compared to previous year except finance expense. Total expenses have increased by 2.76 %
3. Net Income has also decreased by 0.14%
4. Debt Equity ratio has increased from 0.69 in 2018 to 0.74 in 2019. This increases risk of Equity shareholders.
5. Return on Assets & Equity, both have decreased in 2019 as compared to 2018
See additional info for reference:
Imperial Oil Common-size Consolidated balance sheet - Horizontal Analysis (in millions) At December 31, 2019 2019 2018 2019 2018 YOY Trend i.e. Previous Year Revenues and other S income Revenues 34, 002 34, 964 99.71% 99.62% 0.09% Investment and other 99 135 0.29% 0.38% (0.09%) income Total revenues and other 34, 101 35, 099 100.00% 100.00% 0.00% income Expenses Exploration 47 19 0.14% 0.05% 0.08% Purchases of crude oil and 20, 946 21, 541 51.42% 61.37% 0.05% products Production and 6,520 6, 121 19.12% 17.44% 1.68% manufacturing Selling and general 900 908 2.64% 2.59% 0.05% Federal excise tax and fuel 1,808 1,667 5.30% 4.75% 0.55% charge Depreciation and 1,598 1.555 4.69% 4.43% 0.26% depletion Non-service pension and 143 107 0.42% 0.30% 0.11% postretirement benefit Financing 93 108 D.27% 0.31% (0.03%) Total expenses 32, 055 32, 026 94.00% 91.24% 2.76% Income loss before income 2, 046 3, 073 6.00% 8.76% (2.76%) taxes Income taxes (154) 759 (0.45%) 2.16% [1.71%) Net income (loss) 2, 200 2, 314 6.45% 6.59% (0.14%)Imperial Oil Common-size Consolidated balance sheet - Horizontal Analysis (in millions) At December 31, 2019 2019 2018 2019 2018 YOY Trend i.e. Previous Year Assets S S Current assets Cash 1,718 988 4.07% 2.38% 1.69% Accounts receivable, less 2,699 2,529 6.40% 6.10% 0.03% estimated doubtful counts Inventories of crude oil 1,296 1,297 3.07% 3.13% (0.06%) and products Materials, supplies and 616 541 1.46% 1.30% 0.16% prepaid expenses Total current assets 6,329 5,355 15.00% 12.92% 2.08% Investments and long- 891 857 2.11% 2.07% 0.04% term receivables Property, plant and 34,203 34,225 81.07% 82.56% (1.48%) equipment, less accumulated depreciation and depletion Goodwil 186 186 0.44% 0.45% (0.01% Other assets, including 578 833 1.37% 2.01% (0.64%) intangibles, net Total assets 42.187 41.456 100% 100.00% Liabilities $ S S Current liabilities Notes and loans payable 229 202 0.54% 0.49% 0.06% Accounts payable and 4,260 3,688 10.10% 8.90% 1.20% accrued liabilities Income taxes payable 106 55 0.25% 0.16% 0.09% Total current liabilities 4,595 3,955 10.89% 9.54% 1.35% Long term debt 4,961 4,978 11.76% 12.01% (0.2%) Other long-term 3,637 2,943 8.62% 7.10% 1.52% obligations Deferred income tax 4,718 5,091 11.18% 12.28% (1.1%) liabilities Total liabilities 17,911 16,967 42.46% 40.93% 1.53% Shareholders' equity S S Common shares at stated 1,375 1,446 3.26% 3.49% (0.23%) value Earnings reinvested 24,812 24,560 58.81% 59.24% (0.43%) Accumulated other (1911] (1517) (4.53%) (3.66%) (0.87%) comprehensive income (loss) Total shareholders' equity | 24,276 24,489 57.54% 59.07% (1.53%
