Exxon Mobil Financial Analysis

1272 WordsDec 2, 20096 Pages
Exxon Mobil By analyzing Exxon Mobil’s financial statements we obtained financial ratios which led me to the conclusion that Exxon Mobil is mildly profitable, however they have some areas that might require attention. We can support this conclusion by analyzing what the implications of certain ratios are, and how they apply to Exxon Mobil. To make things brief will pick out a prominent ratio from four different categories (liquidity/short term debt ratios, turnover ratios, long-term debt ratios, and profitability ratios). The first ratio of importance is the current ratio (current assets/current liabilities) and it is a liquidity /short-term debt ratio that measures a company's ability to pay short-term obligations. Generally speaking a…show more content…
Exxon Mobil’s ROE (Net Income/Average Shareholder’s Equity) for the most recent year, 2008, was 40.03. This is a striking statistic as the average is between 15-20%; this also shows the profitability of Exxon-Mobil. One final ratio to take a look at is the long-term debt ratio, debt/equity ratio (short-term debt + long-term debt/stockholders equity). For Exxon Mobil the value of the ratio for the most recent year ended 2008, was 0.08. This value here again attests to the profitability of Exxon Mobil as evidenced by its small amount of debt in comparison to its stockholder’s equity. of A conclusion that can be drawn from analyzing ratios is that overall Exxon Mobil is in fact mildly profitable, however the areas that warrant improvement lead me to believe that Exxon Mobil should be Given a Hold rating until there circumstances merit otherwise. According to http://finance.yahoo.com/q/ao?s=XOM, an average of 12 different analysts yields a 2.7 rating for Exxon Mobil, with 1.0 representing a strong buy/outperform/overweight, a 5.0 representing a strong sell/underperform/underweight, and a 2.5 representing a hold/equal weight/perform. More recently Exxon Mobil has experienced a string of downgrades. For example, on April 14th 2009, Oppenheimer downgraded Exxon Mobil from outperform to perform. In addition to this, on March 27th 2009, Benchmark downgraded Exxon Mobil from hold to sell. If that

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