Working Capital Management-Assignment-No1
Ratios Analysis
CBS
Name: Abdul Hamid
Reg ID: 302-1106099
Program: BBA Evening
Class Day: Monday
Term: S -CBS
Course Instructor: [Link]
Date: 22-12-2014
Chevron Corporation
Annual Balance Sheets
For the Fiscal Years 2008 to 2012
2008
2009
2010
2011
2012
1,345.00
3,688.00
1,402.00
1,862.00
8,297.00
569
2,813.00
1,455.00
1,460.00
6,297.00
1,015.00
3,374.00
1,378.00
1,239.00
7,006.00
892
4,035.00
1,431.00
1,584.00
7,942.00
621
4,014.00
1,598.00
1,634.00
7,867.00
Current Assets
Cash and Equivalents
Receivables
Inventories
Other Current Assets
Total Current Assets
Non-Current Assets
Property, Plant & Equipment,
Accum. Depreciation & Depletion
Property, Plant & Equipment, Net
Other Non-Current Assets
54,212.00 51,337.00 49,233.00 46,936.00 48,031.00
28,895.00 27,608.00 26,562.00 25,440.00 26,335.00
25,317.00 23,729.00 22,671.00 21,496.00 21,696.00
7,054.00
6,514.00
5,796.00
5,416.00
4,767.00
Total Non-Current Assets
Total Assets
32,371.00 30,243.00 28,467.00 26,912.00 26,463.00
40,668.00 36,540.00 35,473.00 34,854.00 34,330.00
Liabilities and Shareholder Equity
Accounts Payable
Short Term Debt
Other Current Liabilities
Total Current Liabilities
Non-Current Liabilities
Long Term Debt
Deferred Income Taxes
Other Non-Current Liabilities
Total Non-Current Liabilities
Total Liabilities
Shareholder's Equity
Common Stock Equity
Retained Earnings
Total Equity
Total Liabilities & Stock Equity
Total Common Shares Outstanding
3,103.00
3,434.00
2,352.00
8,889.00
2,170.00
3,165.00
1,831.00
7,166.00
2,735.00
1,637.00
2,574.00
6,946.00
3,502.00
2,706.00
2,699.00
8,907.00
3,294.00
3,806.00
2,345.00
9,445.00
5,485.00
4,393.00
4,431.00
3,988.00
4,521.00
5,010.00
3,645.00
3,215.00
2,851.00
2,433.00
3,535.00
4,302.00
3,409.00
3,485.00
3,576.00
14,030.00 12,340.00 11,055.00 10,324.00 10,530.00
22,919.00 19,506.00 18,001.00 19,231.00 19,975.00
349.00
92.00
287.00
215.00
209.00
17,400.00 16,942.00 17,185.00 15,408.00 14,146.00
17,749.00 17,034.00 17,472.00 15,623.00 14,355.00
40,668.00 36,540.00 35,473.00 34,854.00 34,330.00
656.3 Mil
653.0 Mil
655.9 Mil
653.1 Mil
652.3 Mil
Chevron Corporation
Annual Income Statements
For the Fiscal Years 2008 to 2012
Sales
Cost of Sales
Gross Operating Profit
Selling, General & Admin. Expense
Other Taxes
Depreciation & Amortization
EBIT
Other Income, Net
Interest Expense
Pre-tax Income
Income Taxes
Total Net Income
2008
31,538
23,610
7,928
1,404
676
2,866
2,982
1,138
472
3,648
1,578
2,070
2009
26,187
19,348
6,839
2,239
655
2,320
1,625
614
405
1,834
495
1,339
2010
35,009
25,996
9,013
1,533
733
2,300
4,447
1,367
312
5,502
2,246
3,256
2011
37,580
29,288
8,292
1,377
706
2,216
3,993
1,111
364
4,740
2,133
2,607
2012
31,322
24,379
6,943
1,384
760
3,381
1,418
772
401
1,789
859
930
2.48
0
2.44
0
2.28
0
2.08
0
1.93
0
Dividends Paid per Share
Preferred Dividends
Ratio Analysis
Ratio
2008
Current
Quick
Inventory Turnover
A/R Turnover
Average Collection Period
Fixed Asset Turnover
2009
2010
2011
2012
Liquidity Ratios
0.93x
0.88x
0.78x
0.68x
1.01x
0.81x
0.89x
0.73x
0.83x
0.66x
Efficiency Ratios
16.84x
13.30x
8.55x
9.31x
42.10
38.67
days
days
0.97x
0.87x
18.87x
10.38x
34.70
days
1.23x
20.47x
9.31x
38.65
days
1.40x
15.26x
7.80x
46.13
days
1.18x
Total Asset Turnover
0.78x
0.72x
0.99x
1.08x
0.91x
50.75%
31.16%
55.18%
29.62%
58.19%
30.67%
38.75%
103.03%
63.27%
39.79%
123.09%
66.08%
42.31%
139.15%
73.35%
18.63x
26.01x
14.02x
20.11x
5.46x
13.89x
Profitability Ratios
25.14%
26.12%
25.74%
9.46%
6.21%
12.70%
6.56%
5.11%
9.30%
5.09%
3.66%
9.18%
11.66%
7.86%
18.64%
22.06%
10.63%
6.94%
7.48%
16.69%
22.17%
4.53%
2.97%
2.71%
6.48%
11.66%
16.69%
6.48%
Leverage Ratios
56.36%
53.38%
34.50%
33.77%
Total Debt Ratio
Long-term Debt Ratio
LTD to Total
Capitalization
Debt to Equity
LTD to Equity
44.15%
129.13%
79.05%
42.01%
114.51%
72.44%
Coverage Ratios
8.73x
5.53x
14.80x
11.26x
Times Interest Earned
Cash Coverage Ratio
Gross Profit Margin
Operating Profit Margin
Net Profit Margin
Return on Total Assets
Return on Equity
Return on Common
Equity
7.86%
18.64%
Current ratio
1.2
1.01
1
0.93
0.89
0.88
0.83
0.8
0.6
Current ratio
0.4
0.2
0
2008
ANALAYSIS:
2009
2010
2011
2012
As per the figure shown the company current liabilities are more than company assets, only in the year
2010 it has good sign but in next year it has changed again for the good position the ratio should be above
the one, but her the current ratio is less than one, the assets stabilities are less than liabilities.
2. Quick Ratio
0.78
0.68
0.81
0.73
0.9
0.8
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0.66
Quick ratio
2008
2009
2010
2011
2012
ANALYSIS:
The above graph suggests that the company has more liquid liabilities than liquid assets, it is bad sign for
the company, and the company should not be able to meet the liquid liabilities which are higher as
compare to liquid assets. The company liquid assets are continuously shows negative impact on liquid
assets.
[Link] Turnover
16.84
13.30
18.87
20.47
15.26
Inventory Turonover
25
20.47
18.87
20
16.84
15.26
15
13.3
Inventory Turonover
10
0
2008
ANALAYSIS:
2009
2010
2011
2012
As per the figure shown the company inventory Turnover is having good sign there is little problem as
we see and compare the Graph.
[Link]-term Debt Ratio
34.50%
33.77%
31.16%
29.62%
30.67%
Long Trem Debt Ratio
36
34.5
34
33.77
31.16
32
29.62
30
30.67
Long Trem Debt Ratio
28
26
2008
2009
2010
2011
2012
The long-term Debt to Ratio
For chevron which compared to the baseline
And which the graph shows indicates the value of this ratio
is meeting the company's expectations.
[Link] to Equity
129.13% 114.51% 103.03% 123.09% 139.15%
Debt to Equity Ratio
150
129.13
114.51
123.09
139.15
103.51
100
Debt to Equity Ratio
50
0
2008
2009
2010
2011
2012
Analysis:
The graph shows that company shareholders have lesser contribution than creditors. The huge amount of
debt is the reason behind that, it is not good for the company to increase his debt and not fully utilize the
shareholders funds. High amount of debt increase the interest upon it, indirectly it affect to the income
and profit.
6. A/R Turnover
8.55
9.31
10.38
9.31
7.80
A / R Turnover
12
10
10.38
9.31
8.55
9.31
7.7
8
6
A / R Turnover
4
2
0
2008
2009
2010
2011
2012
The accounts receivable turnover for
chevron which show in graph and
compared to the baseline of each year
suggests this ratio may not be on target
with company objectives.
[Link] Collection
Period
42.10
days
38.67
days
34.70
days
38.65
days
46.13
days
Average Collection Period
50
45
40
35
30
25
20
15
10
5
0
46.13
42.1
38.67
38.65
34.7
Average Collection Period
2008
2009
2010
2011
2012
In here we see that indicates the average collection period for the collection is not looking good
and not having good sign they have care for this.
[Link] Profit Margin
25.14%
26.12%
25.74%
22.06%
22.17%
Gross Profit Margin
28
26
25.14
26.12
25.74
24
22.06
22.17
2011
2012
Gross Profit Margin
22
20
2008
2009
2010
Analysis:
From the above graph the Gross profit ratio shows the decrease trend in the GP which is bad sign for the
company, company should have to increase or maintain its high level of GP .
[Link] Profit
Margin
9.46%
6.21%
12.70%
10.63%
4.53%
Operating Profit Margin
14
12.7
12
10
10.63
9.46
8
6.21
Operating Profit Margin
6
4.53
4
2
0
2008
2009
2010
2011
2012
Analysis:
As shown in graph, in year 2009 the operating net profit ratio Decrease and next year it is back goes high
and again next next year decreases it shows negative direction.
[Link] Profit Margin
6.56%
5.11%
9.30%
6.94%
2.97%
Net Profit Margin
9.3
10
8
6.94
6.56
5.11
2.97
Net Profit Margin
2
0
2008
2009
2010
2011
2012
The graph shows the increase and decrease trend, in first two year it was increasing than it went down, it
indicate decrease in profitability of the shareholders. As compare first two year in last year it has been
boom in decreasing.
[Link] on Assets
5.09%
3.66%
9.18%
7.48%
2.71%
Return On Asset
10
9.18
7.48
8
6
5.09
Return On Asset
3.66
2.71
2
0
2008
2009
2010
2011
2012
Analysis:
The graph shows the trend Decrease in first three years and after that it goes High. In starting years the
return on asset ratio is Decrease. This means that the company is Decreasing their revenue per unit of
asset but then it becomes positive. This is good signs for the company. But overall in last year again it
goes down.
[Link] on Equity
11.66%
7.86%
18.64%
16.69%
6.48%
Return On Equity
18.64
20
16.69
15
11.66
10
7.86
Return On Equity
2.71
0
2008
2009
2010
2011
2012
The figure shows that the returns on equity is Decreasing in the beginning and touches highest level in
the year 2010 and 2011 then it is declining in last year the reason is decrease in company profit.