A Financial Ratio Quarterly Trend Analysis of Exxon

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A Financial Ratio Quarterly Trend Analysis of:

Exxon Mobil Corporation

Stock Symbol: XOM

Listed on New York Stock Exchange

Prepared for:

Dr. Edward Lawrence
Department of Finance and Real Estate
Florida International University

In partial fulfillment of the requirements of Course:

FIN 6406

By:

Nicole Suarez
Panther ID # 1101809

1.0 Introduction

ExxonMobil Corporation and its affiliated companies operate in the United States and most other countries. Headquartered in Irvine, TX, ExxonMobil was formed following the merger of Mobil and Exxon. It is the world’s largest publicly traded international Oil and Gas Company. They hold an industry-leading inventory of global oil and gas resources. They are the world’s largest refiner and marketer of petroleum products, and their chemical company ranks among the world’s largest. They are also a technology company, applying science and innovation to find better, safer and cleaner ways to deliver the energy the world needs. The company has more than 82,000 employees across the world. ExxonMobil’s stock is publicly traded on the New York Stock Exchange (NYSE) under the symbol “XOM.”

This report provides a quarterly trend analysis for ExxonMobil for fiscal year 2011. Financial information was obtained from the company’s website by examining the 10-Q SEC filings for Quarters 1 through 3 and the 10-K SEC filing for Quarter 4. Additional financial information was also found on Yahoo! Finance, MSN Money and Bloomberg. Main areas of focus are liquidity, asset utilization, profitability, debt utilization and market values.

2.0 Financial Ratio Calculation and Analysis

The following table represents the liquidity ratios for ExxonMobil for FY 2011:

Liquidity Ratios| Q1| Q2| Q3| Q4| Annual|
Current Ratio| .98| .97| .93| .94| .94|
Quick Ratio| .76| .71| .70| .75| .75|
Net Working Capital| -.005| -.01| -.02| -.01| -.01|
Current liabilities to inventory | 4.52| 3.91| 4.48| 5.16| 5.16| Cash Ratio| .17| .11| .15| .16| .16|
Operating Ratio| .10| .09| .09| .10| .09|

Current and quick ratios remain stable throughout the year, but both fall below a 1:1, which could indicate XOM’s inability to pay on its short-term debt because of their lack of liquidity. The same applies to net working capital. Because of the company’s lack of liquidity the company could run into a potential problem when considering their short-term debts. Current liabilities to inventory decreased in Q2 and then show positive trends in Q3 and Q4. This was a result of an increase in inventory in Q2 and then a decrease in Q3 and Q4. Cash ratio decreases slightly in Q2 and trends positive in Q3 and Q4. Based on the trends, it appears the company may have used cash in Q2 to purchase additional inventory, which would explain the decrease in the last ratio mentioned. Operating Ratio remained stable throughout 2011.

The following table represents the asset ratios for ExxonMobil for FY 2011:

Asset Ratios| Q1| Q2| Q3| Q4| Annual|
Inventory Turnover | 7.47| 7.58| 8.11| 8.28| 33.36|
Fixed Assets Turnover| .54| .58| .58| .54| 2.18|
Total Assets| .34| .37| .37| .35| 1.41|
Assets to Equity | 2.11| 2.10| 2.08| 2.14| 2.14|

Inventory turnover days increased slightly in Q2 through Q4, which shows a slow-down in turn time. Fixed assets turnover and total assets remain stable over all periods. These ratios measure the company's ability to generate net sales from fixed-asset investments -specifically property, plant and equipment (PP&E) – net of depreciation and total assets, respectively. Assets to equity ratio remain stable with a slight increase in Q4 due to an increase in total assets.

The following table represents the profitability ratios for ExxonMobil for FY 2011:

Profitability Ratios| Q1| Q2| Q3| Q4| Annual|
Return on Assets| .03| .03| .03| .03| .13|
Return...
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