Chevron Case Study

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Case 1: Chevron October 24, 2011 Introduction of the Company Chevron began with the discovery of oil north of Los Angeles in 1879 and was originally named the Pacific Coast Oil Company. Later John D. Rockefeller’s Standard Oil bought Pacific Oil in 1900 to form Standard Oil (California). In 1911, the Sherman Antitrust Act would force the breakup of the parent Standard Oil and Chevron became Standard Oil of California or Socal. Socal would go on to form joint venture with Texaco in 1936 to form Caltex, to develop and market oil in the Middle East and Indonesia. It would then go on to form the Aramco partnership in the Middle East, which composed of Socal, Texaco, Exxon and Mobil but by 1980, Aramco was completely owned by the…show more content…
Each play an important role in Chevron operations to ensure each area of operation is properly addressed and executed successfully. Financial Analysis Chevron is the second largest producer in the U.S. and one of the six largest producers of oil in the world. In 2009, Chevron reported Q3 earnings of $3.83 billion compared to the $7.89 billion reported in Q3 of 2008. Chevron had total revenue of $273 billion, its total cost and expenses were $37 and had a net income of $24 billion in 2008. For the first 9 months of 2009 earnings were $7.41 billion, down 61% from $19.04 billion in the first 9 months of 2008. Chevron’s net profit margin in 2008 was 8.8 percent, slightly lower than the industry average of 10 percent, its debt to equity ratio was only .10 less than the industry average of .25, making it easier for Chevron to borrow more if needed. In 2008 Chevron had a return on equity of 27.6 percent surpassing the industry average of 19 percent and a price per earnings ratio of 8.2 times. Chevron performed well when it came to management efficiency. Their income per employee was 372,758 outperforming the industry standard and S&P and had $4 million in revenue per employee. They had an inventory turnover of 23.2 and an asset turnover of 1.2, again outperforming both the industry average and S&P.
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