University of Phoenix Analyzing the balance sheets for Exxon Mobil is telling of where an organization is going in the future, or even where an organization has come from. The following numbers are taking from Forbes.com and are a comparison of three organizations; Exxon Mobil, Chevron, and Valero. They cover the period from March 2011 to December 2011. During 2011, ExxonMobil saw an increase in operating revenue/revenue sales, adjustment to revenue, and cost of sales. They have also seen an increase in accounts receivable but saw a dip in total current assets. Exxon Mobil Corporation is currently rated as having Aggressive Accounting & Governance Risk (AGR). This places them in the 31st percentile among all companies, indicating higher Accounting & Governance Risk (AGR) than 69% of companies. AGR scores are based on statistical analysis of accounting and governance risk factors. Lower scores indicate scores indicate heighten cooperate integrity risk. That normally indicates the likelihood of future class action litigation. High scores by Exxon Mobil indicate that the organization is trustworthy. This is especially important for Exxon Mobil because it wasn??™t want to long ago the organization was reeling from the Exxon Valdez oil spill. The organization continues to make a profit and also continues to find ways to help the environment through some stakeholders (Forbes.com 2012).
Exxon Mobil has researched liquid fuels and oil will continue to be the world??™s largest energy source going into 2040. This will meet at least one third of the demand. The organization estimates that globally, demand for liquid fuel will rise about 30 percent over the next 30 years. Advances in technology will be key to expanding liquid fuel supplies. As conventional crude oil production holds relatively flat through 2040, demand growth will be met by newer sources. The biggest gains will come from global deep-water production, which more than doubles through 2040. This growth illustrates the power of new technologies. Deep-water production was in its infancy just 10 years ago; by 2025, it will provide 10 percent of global liquid fuels supplies.
The composition of liquid fuels is changing, but one fact is not: the world continues to hold significant oil resources. Even by 2040, ExxonMobil estimates that less than half of the worlds oil will have been produced. And it is important to note that as new technologies are developed, estimates of the amount of remaining global resources continue to be revised. Exxon Mobil??™s goal is to continue to use technology in order to tap into the world??™s oil resources. Using these technologies has not created a loss in profit for the company, rather they have seen in increase in profit over the last year. As long as the company sees profit, the use of new technology will never be out of reach for Exxon Mobil (Exxon Mobil).
While Exxon Mobil enjoyed record profits last year, some organizations in the oil business cannot say that they have seen increase in profits. Chevron Corporation provides administrative, financial, management and technology support to U.S. and international subsidiaries that engage operations of petroleum, chemicals, mining, power generation and energy services. When analyzing the balance sheets for Chevron, over the past year the organization has posted huge losses. While Chevron has posted increases in decrease in payables, they have been on a current down slide in areas such as decrease in receivables, decrease in inventories, decrease in other working capital, and an increase in net cash from continuing operations. Most of Chevrons problems have come from problems in the middle east. As of today, Israel is poised to attack Iran which, makes for a very unstable stock market. These uncertainties weigh heavily on investments on organizations (Forbes.com 2012).
The third company that the author compared to Exxon Mobil was Valero. Valero seems to be headed in the same direction as Chevron. They have suffered losses in the same areas as Chevron with losses in net profits for the entire year. Compared to the other big two, Valero is a relatively new company. That being said, the organization has an upside that cannot be ignored. Valero Energy Corporation is an independent refining and marketing company, which owns and operates approximately 15 refineries that produces conventional gasoline??™s, distillates, jet fuel, asphalt, petrochemicals, and lubricants etc. (Forbes.com 2012). Valero now has its sights on alternative means of fuel such as wind and corn ethanol. The organization is young, but they have the leadership and technology to be serious players in the future. But Valero will have quite a way to go if it wants to compete with Exxon on the global stage.
Exxon Mobil has an ownership interest in 46 refineries in 26 countries and distillation capacity of 6.3 million barrels a day. These refineries also have a combined capacity to produce an industry-leading 150,000 barrels of lube base stocks, which are used to make the lubricants that keep engines and equipment running smoothly. A global supply organization coordinates and optimizes the supply of crude and feedstock to the refineries and the off-take of products. It also optimizes a global logistics system that includes ownership interest in crude oil and petroleum-product tankers, more than 25,000 miles of pipelines and some 300 major petroleum products terminals. A number of ExxonMobil refineries are concentrated into regional clusters, which enable further operational and supply optimization. Major refining centers can be found in the United States on the Gulf Coast, northwest Europe, Japan and Southeast Asia. Collectively, these centers represent 60 percent of our total refining capacity (Exxon Mobil).
In closing Exxon Mobil seems to be far ahead of their competitors. This has been shown through balance sheets, cash flow, technology and the efforts put forth in the global sector. Exxon Mobil seems to have learned from the mistakes of the past and have moved on to be a leader in fossil fuels.References
Exxon Mobil Energy and Technology; Supply and Technology
Forbes.com Chevron CORP Income Statement Feb 6, 2012
Forbes.com ExxonMobil Income Statement Feb 6 2012
Forbes.com Valero Income Statement Feb 6 2012