Financial Analysis for Chevron Inc.

Financial Analysis for Chevron Corp

INTRODUCTION

Chevron Corporation with address in Bolinger Canyong Road , San Ramon California , United States is engaged in the business in the market segment identified as the energy sector . The company 's major products are in the petroleum industries . It has focused its business on the exploration , development , production and selling of its crude oil and natural gases . The following paragraphs show the painstaking computation of the financial statement ratios using the balance sheet and the income statement of Chevron Corp for the years 2004 , 2005 and

2006

BODY

FINANCIAL STATEMENT ANALYSIS

Profit Ratio

2006 2005

Net Income

17 ,138 ,000 0 .08

14 ,099 ,000 0 .07 210 ,118 ,000 198 ,200 ,000 The profit ratio above shows that the net income of 17 ,138 ,000 is only eight percent of the year 2005 , the profit ratio shows that the net income of 14 ,099 ,000 is only seven percent of the statement ratio shows that the year 2006 did better than the prior year 2005

Further , the year 2006 net income of 17 ,138 ,000 is definitely very higher than the net income of the prior year 2005 of 14 ,099 ,000 by 3 ,039 ,000 . This shows an increase of twenty one and 55 /100 percent increase on the 2005 net income data computed as follows 17 ,138 ,000 - 14 ,099 ,000 14 ,099 ,000 21 .55 (Bloom , 2004

Return on Assets 2006 2005

Net Income

17 ,138 ,000 0 .13

14 ,099 ,000 0 .11 132 ,628 ,000 125 ,833 ,000 The above return on Assets shows that the net income for the year 2006 amounting to 17 ,138 ,000 is only thirteen percent of the assets of the company amounting to 132 ,628 ,000 . For the prior year 2005 , the net income of 14 ,099 ,000 is only eleven percent of the assets of 125 ,833 ,000 . This also shows that the company did better in the year 2006 than the year 2005 (Maksy , 2002

Earnings per share 2006 2005

Net Income

17 ,138 ,000 8 .19

14 ,099 ,000 6 .74

Outstanding Shares 2 ,093 ,319 2 ,093 ,319 The above earnings per share ratio shows that the net income of 17 ,138 ,000 when distributed to the outstanding 2 ,093 ,319 shares shows that each stockholder will receive 8 .19 for each share of stock that he or she receives . In the prior year 2005 , the net income of 14 ,099 ,000 when divided by the 2 ,093 ,319 outstanding shares shows that the stockholders will receive 6 .74 for every share of stock that events . This only shows that the year 2006 did better than the prior year 2005 (Maksy , 2002

Inventory turnover

2006 Net Sales 210 ,118 ,000 24 (beg inventory End inventory /2 (4656000 4121000 /2 The above 2006 inventory turnover ratio shows that the 210 ,118 ,000 net sales when

divided by the average inventory will show that the inventory had turned over into...