The Financial Health Of Chevron: Case Study: Financial Management

KeAnna Holley
FINC 619- Financial Management
Case Study #1
Table of Contents
Executive Summary 3
Background 4
Analysis 4
Revenue 4
Profit Analysis 6
Capital Efficiency Analysis 7
Liquidity 8
Financial Leverage 8
Market-Based Ratios 9
DuPont Analysis 9
Recommendations 10
References 12

Executive Summary

This report is to analyze the financial health of Chevron based upon several different measures including revenue, profit analysis, capital efficiency analysis, liquidity, financial leverage, market-based ratios, and finally the DuPont Analysis. Though a general observation can be made based on numbers/percentages alone, it is important to do a comparison with other companies in the oil and gas industry to get a better understanding of how we rank. In this report, I will use Exxon Mobil, Occidental Petroleum, and Conoco Philips as the peer group.
Chevron is a strong competitor in the oil and gas industry and came in second for revenue, gross profit, and ROA, with Exxon Mobil taking the number one spot. Chevron does rank number one in quick ratio or liquidity which will be examined later in the report. We are third in debt-to-asset ratio, right above Occidental Petroleum. Even though Chevron was at the bottom of the pack for P/E ratio in 2011, we showed improvement in 2013 and if can keep that momentum, 2014 will be a great year for the company.
The goal of this report is to see how Chevron compares to its peer group and highlight areas of improvement. Within the next six months, our goal is to increase sales, improve operational efficiency, protect and grow market share and have customer retention. As we remain optimistic that the economy will improve, we are also optimistic that there will be growth in every ...

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• Our Businesses. Retrieved April 26, 2014 http://www.chevron.com/about/ourbusiness/ • Investopedia, Compound Annual Growth Rate - CAGR. Retrieved April 26, 2014. http://www.investopedia.com/terms/c/cagr.asp • Investopedia, DuPont Analysis. Retrieved April 26, 2014 http://www.investopedia.com/terms/d/dupontanalysis.asp • U.S Bank, Maximize your return on assets: six steps to getting more profits from your property, plant, and equipment assets. Retrieved May 1, 2014. http://www.usbankconnect.com/article/maximize-return-assets-six-steps-profits-property-plant-equipment-assets • Newman, Pam, 7 Ways to Improve Liquidity. Retrieved May 1, 2014. http://www.entrepreneur.com/article/187606# • Keythman, Bryan, Debt-to-Total Assets Ratio. Retrieved May 1, 2014.
http://budgeting.thenest.com/debttototal-assets-ratio-24308.html