This website uses cookies to ensure you have the best experience. Learn more

Why Should Not Invest In Exxon – A Comparative Analysis

1780 words - 8 pages

Comparative analysis:
Analysing the ratio of one with the other in the industry provides for better understanding about the performance of the company in market. An investor has to make a comparative analysis before making any investment decision.

In this case, the direct competitor of Exxon is Chevron, ratios is being computed for the recent four quarters which is being used for comparative analysis.

Current ratio:
This is an essential ratio which discloses about the liquidity position of a company. It is determined by dividing the current assets and current liabilities of the company. In this case, the Exxon’s current ratio is decreasing which indicates about the decreasing liquidity of the company. Current ratio of Chevron is far ahead than Exxon. This ratio is fluctuating for Chevron, but the fluctuation is minor and not drastic. Exxon ratios are fluctuating within 1.0 to 0.84, whereas Chevron ratio is always greater than 1.50. This clearly indicates that Chevron is in better position in meeting its obligations when compared to Exxon. If this decline continues for Exxon then there are chances where the company cannot meet up its short-term obligations and lead to financial distress.

Quick ratio:
It is another indicator of liquidity which is determined by subtracting inventory from the current assets and dividing by current liabilities. Inventories are less liquid asset, so it is eliminated in determining this ratio. This ratio is already very less and every quarter it is decreasing which indicates about the poor financial health of the company. But in case of Chevron this ratio is far ahead and fluctuates between 1.35 to 1.46, whereas Exxon values are fluctuating within the range of 0.79 and 0.61. Chevron liquidity position is far ahead and is stronger when compared to Exxon. This clearly indicates about Exxon poor financial health.

Accounts receivables days:
Generally, collection days indicates about the ability of the company to convert the generated sales into cash which is essential for any company. This ratio is determined by dividing the accounts receivables by average daily sales. In this the number of collection days is significantly higher and it has increased from 97.87 days in 4th quarter of 2012 to 110.37 in the 3rd quarter of 2013, this number reached peak during 2nd quarter of 2013 to 123.69 days. On the other hand, for Chevron the accounts receivable days are far higher than Exxon with 121 days as the minimum and 137 as its maximum during 3rd quarter of 2013. This provides for an indication about the industrial trend that is in this industry the collection periods are generally higher. This indicates that the collection efficiency of the company is poor. Generally, this will add more pressure to the working capital requirements of the company and in turn will reduce the liquidity and the creditworthiness.

Inventory turnover ratio:
Inventory turnover ratio indicates about the speed in which the inventory is converted...

Find Another Essay On Why should not invest in Exxon – A comparative Analysis

Why Children should not be in Beauty Pagents

872 words - 3 pages shouldn't be permissible.Some mothers live through their daughters. Let's call this mother Sue. When Sue was younger, her mom would not allow Sue to enter a pageant. So when Sue grows up she lives through her daughter forcing her to become this perfect princess. Why not just let the kid be a kid? Parents should stop treating their kids like some kind of machine. More than 100,000 children under the age of 12 compete in about 3,000 child beauty pageants

Why Women Should Not Be Allowed In Combat Occupations?

1502 words - 7 pages it’s not just the physical differences, there is also the risk of sexual assault. Due to the detrimental impact on the military, soldiers, and society, women should not be allowed to be in combat occupations. The Women's Armed Services Integration Act created in 1948 formed a force of women in all the military departments. This was considered a step in the right direction while also being responsible for current combat restrictions. The act

Why the United States should not get involved in Ukraine

822 words - 4 pages While many see Russia’s movement to admit Crimea as an attempt recreate a communist USSR-like ‘supercountry’ and the Russian government and their Pro-Russian Ukrainian counterparts have committed multiple crimes against humanity, the United States should not intervene in the Russia-Ukraine conflict. Tight sanctions risk severing ties with Russia and military intervention may very well ignite World War III. This may be seen as even more

Should there be limits to growth in order to prevent environmental degradation? Why or why not?

1885 words - 8 pages should have paid attention. Creating sustainable systems does not happen overnight. It requires looking ahead decades. But if you tell a society that it is addicted to growth and it will be better off giving it up, it would laugh at you.In 1972, global population and consumption were still below the planet's long-term carrying capacity. It was only necessary to slow down and then stop. Now, they are far above, about 35% above according to

why americans should not use credit cards

1121 words - 5 pages bewildering confusion of credit cards. There has to be a change in this some way. As parents we teach our children to not do drugs, to practice safe sex, follow the rules and to go to college. We never think to educate them on the many dangers of credit card debt. No one really reads the literature that comes with the credit cards only because it is like reading another language. If there is going to be credit usage then there should be a

Why College Athletes Should NOT be Paid

1997 words - 8 pages themselves in a position to achieve one. I do not want them [the National Labor Relations Board] to change a part of that” (Mixed Reviews). Education of athletes is just as important as the education of any student at a university. The focus should stay in the core, in school, and should not be destroyed by payment of athletes. College athletes are way more than the value of their jersey; they are valuable from the knowledge they learn. In addition

Why Smoking Should Not Be Banned

675 words - 3 pages Why Smoking Should Not Be BanSmoking is a source of great controversy, and most individuals either support it or oppose it. Almost no middle ground exists on the topic of tobacco smoking, and individuals against smoking have taken great strides to promote the cessation of smoking in public places. Unfortunately, this has led to the formation of numerous laws that forbid smoking in specific public places like restaurants, bars, parks, and in some

Reasons Why Abortion Should Not Remain Legal

819 words - 4 pages , but it is a form of sin across numerous religions. Another argument commonly used, as a justification as to why abortion should not remain legal is that if abortion was not made readily available most women with unwarranted pregnancy would be encouraged to choose the human and moral adoption route. Paradoxically, there are numerous women who cannot or have difficulty conceiving a child of their own. Due to the costly expenses necessary for in

Why Illegal Immigrants Should Not Be Deported

2079 words - 8 pages the opportunity to a better job, wouldn't take the minimum wage paying job. In the farming industry citizens were having many trouble and problems getting people to do these jobs. These jobs are something people don't like to settle with. It is not until when immigrants started coming into the united states that these jobs had workers willing to do the job. Why argue against immigrants having jobs if people aren't willing to take them anyway

Why MMA should not be banned

1979 words - 8 pages Evan McMorran-CarreAP English 3The Importance of Mixed Martial Arts and why it should not be bannedThere are many great benefits in Mixed Martial Arts, although some would disagree with this statement. Mixed Marital Arts is an extremely beneficial tool, not only for the mind, body and spirit. but it also serves as a self defense mechanism to use in the real world if presented with a given situation in which a person would need to protect

Why Marijuana Should Not be Legalized

1657 words - 7 pages legalization through taxation. However, drugs like marijuana are addicting and should not be legalized. Marijuana should not be legalized because it can cause overwhelming damage to the society as a whole. As Bennett says, “Drug use- especially heavy drug use- destroys human character. It destroys dignity and autonomy, it burns away the sense of responsibility, it subverts productivity, it makes a mockery of virtue” (Husak 663). People

Similar Essays

Investing In The Future: Why The Medical Field Should Invest In Wireless Networks

1140 words - 5 pages technology will become more common even if the current technology is inferior. Wireless networks will be the future trend. Because of greater investment the technology will continue to improve so institutions in the medical field should invest in the technology of the future: wireless networks. Pros and Cons of Wired Networks: Almost all computers can be wired to one another by using network cables. David Nield, a technology journalist, emphasizes a

Investing In The Future: Why The Medical Field Should Invest In Wireless Networks

1073 words - 5 pages any access to the network. Encryption is a common measure against illegal interception and user authentication is also useful to control unauthorized access. If system administrators upgrade their wireless access point software with third party version or their private version, they should allow for adjusting the output power of wireless access points. For example, if a wireless user connects his/her phone to a wireless access point in a private

Investing In The Future: Why The Medical Field Should Invest In Wireless Networks

926 words - 4 pages wireless networks. As wireless technology continues to advance, hospitals more and more have started using it for emergency care. WiMAX emergency systems can help emergency room doctors diagnose patients’ conditions and provide medical instruction during ambulance transportation. Lives have been saved because of this technology and more lives will be saved in both urban and rural hospital networks. As we have seen in the statistics as well as the examples, wireless technology is not only a helpful tool for institutions in the medical field but increasingly it’s become necessary.  

Investing In The Future: Why The Medical Field Should Invest In Wireless Networks 1264 Words

1264 words - 6 pages . It would cost more money to reinstall wired networks. This report offers a recommendation to the IT specialists and business managers in hospitals for wireless network as the preferred investment. Wireless Benefits the Radiology Department: Wireless networks have the advantage of convenience. Wireless access points can support many wireless users at the same time, so enterprises are not required to build multiple network ports. Employees can