Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Assets
- Analysis of Solvency Ratios
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Common Stock Valuation Ratios
- Enterprise Value (EV)
- Enterprise Value to FCFF (EV/FCFF)
- Price to FCFE (P/FCFE)
- Capital Asset Pricing Model (CAPM)
- Price to Sales (P/S) since 2005
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Profitability Ratios (Summary)
Chevron Corp., profitability ratios
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Return on Sales | ||||||
| Operating profit margin | ||||||
| Net profit margin | ||||||
| Return on Investment | ||||||
| Return on equity (ROE) | ||||||
| Return on assets (ROA) | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The profitability metrics exhibited considerable fluctuation over the five-year period. Initial increases in profitability were followed by declines, suggesting a cyclical pattern potentially influenced by external market conditions. Overall, a decreasing trend in profitability is apparent from 2023 through 2025.
- Operating Profit Margin
- The operating profit margin increased significantly from 14.81% in 2021 to 21.42% in 2022, indicating improved operational efficiency or favorable pricing conditions. However, this margin subsequently decreased to 15.37% in 2023 and continued to decline to 11.53% in 2025. This suggests increasing operating costs or reduced pricing power in later years.
- Net Profit Margin
- Mirroring the trend in operating profit margin, the net profit margin rose from 10.04% in 2021 to 15.05% in 2022. A subsequent decrease was observed, falling to 10.85% in 2023, 9.13% in 2024, and reaching 6.67% in 2025. This decline indicates a weakening ability to translate revenue into profit after accounting for all expenses, including taxes and interest.
- Return on Equity (ROE)
- Return on equity experienced a substantial increase from 11.24% in 2021 to 22.27% in 2022, demonstrating a more effective utilization of shareholder equity to generate profits. The ROE then decreased to 13.28% in 2023, 11.59% in 2024, and further to 6.60% in 2025. This suggests diminishing returns on shareholder investment.
- Return on Assets (ROA)
- The return on assets followed a similar pattern, increasing from 6.52% in 2021 to 13.76% in 2022, indicating improved efficiency in utilizing assets to generate earnings. A decline was then observed, with ROA decreasing to 8.17% in 2023, 6.87% in 2024, and 3.80% in 2025. This indicates a decreasing ability to generate profit from its asset base.
The consistent decline in all four profitability ratios from 2022 to 2025 warrants further investigation to determine the underlying causes. Potential factors could include increased competition, rising input costs, changes in market demand, or shifts in the company’s capital structure.
Return on Sales
Return on Investment
Operating Profit Margin
Chevron Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Operating income | ||||||
| Sales and other operating revenues | ||||||
| Profitability Ratio | ||||||
| Operating profit margin1 | ||||||
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Operating Profit Margin, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Operating profit margin = 100 × Operating income ÷ Sales and other operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The operating profit margin exhibited significant fluctuation over the five-year period. Initial values demonstrated substantial growth, followed by a period of decline.
- Operating Profit Margin Trend
- In 2021, the operating profit margin stood at 14.81%. This figure increased considerably to 21.42% in 2022, representing a peak in the observed period. Subsequently, the margin decreased to 15.37% in 2023 and continued this downward trajectory, reaching 14.63% in 2024. By 2025, the operating profit margin had fallen to 11.53%, indicating a substantial contraction from the 2022 high.
The operating income increased significantly from 2021 to 2022, driving the margin expansion. However, despite a decrease in operating income from 2022 to 2023, the operating profit margin remained relatively stable. The subsequent declines in both operating income and sales and other operating revenues from 2023 to 2025 contributed to the observed reduction in the operating profit margin.
- Relationship to Revenue
- Sales and other operating revenues increased from US$155,606 million in 2021 to US$235,717 million in 2022, coinciding with the peak in operating profit margin. However, revenues then decreased to US$196,913 million in 2023, US$193,414 million in 2024, and further to US$184,432 million in 2025. This revenue decline, coupled with decreasing operating income, suggests increasing pressure on profitability.
The consistent decrease in the operating profit margin from 2022 to 2025 warrants further investigation to determine the underlying causes, such as increased costs of goods sold, heightened operating expenses, or shifts in product mix. The trend suggests a weakening ability to translate sales into operating profits.
Net Profit Margin
Chevron Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Chevron Corporation | ||||||
| Sales and other operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| Net Profit Margin, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
Net profit margin = 100 × Net income attributable to Chevron Corporation ÷ Sales and other operating revenues
= 100 × ÷ =
2 Click competitor name to see calculations.
The net profit margin exhibited significant fluctuation over the five-year period. Initial values demonstrated a substantial increase followed by a consistent decline.
- Overall Trend
- The net profit margin increased notably from 2021 to 2022, peaking at 15.05%. Subsequently, a clear downward trend was observed from 2022 through 2025, culminating in a margin of 6.67%.
- 2021 to 2022
- A considerable improvement in net profit margin occurred between 2021 and 2022, rising from 10.04% to 15.05%. This suggests a significant increase in profitability relative to revenue during this period. This improvement coincided with a substantial increase in sales and other operating revenues.
- 2022 to 2025
- From 2022 to 2025, the net profit margin experienced a consistent decline. It decreased from 15.05% in 2022 to 10.85% in 2023, 9.13% in 2024, and finally to 6.67% in 2025. This indicates that while revenues decreased, profitability decreased at a faster rate.
- Magnitude of Change
- The largest single-year decrease in net profit margin occurred between 2024 and 2025, with a drop of 2.46 percentage points. The initial increase from 2021 to 2022 was the largest single-year increase, at 5.01 percentage points.
The observed trend suggests a weakening ability to translate revenue into profit over the analyzed timeframe. Further investigation into the factors driving revenue and cost changes would be necessary to fully understand the underlying causes of these fluctuations.
Return on Equity (ROE)
Chevron Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Chevron Corporation | ||||||
| Total Chevron Corporation stockholders’ equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| ROE, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROE = 100 × Net income attributable to Chevron Corporation ÷ Total Chevron Corporation stockholders’ equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Equity (ROE) exhibited significant fluctuations over the observed five-year period. Initial values demonstrated substantial growth, followed by a period of decline.
- Overall Trend
- The ROE began at 11.24% in 2021, increased dramatically to 22.27% in 2022, then decreased to 13.28% in 2023, 11.59% in 2024, and finally to 6.60% in 2025. This represents a considerable decrease from the peak in 2022.
- Net Income Influence
- Net income attributable to Chevron Corporation increased substantially from US$15,625 million in 2021 to US$35,465 million in 2022, which likely contributed to the significant increase in ROE during that period. Subsequent declines in net income to US$21,369 million (2023), US$17,661 million (2024), and US$12,299 million (2025) correlate with the observed decreases in ROE.
- Equity Impact
- Total stockholders’ equity generally increased from US$139,067 million in 2021 to US$186,450 million in 2025. However, the rate of equity growth did not consistently offset the changes in net income. The increase in equity from 2022 to 2025, while substantial, was not enough to maintain the high ROE achieved in 2022, as net income decreased more significantly.
- Peak and Decline
- The peak ROE of 22.27% in 2022 suggests a period of particularly efficient profitability relative to shareholder equity. The subsequent decline indicates a diminishing ability to generate profits from the same level of equity investment. The most substantial decrease occurred between 2024 and 2025, with a drop of 4.99 percentage points.
The observed trends suggest that changes in net income have a more pronounced effect on ROE than changes in total equity, at least over this period. Continued monitoring of both net income and equity is recommended to understand the underlying drivers of ROE performance.
Return on Assets (ROA)
Chevron Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income attributable to Chevron Corporation | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| ConocoPhillips | ||||||
| Exxon Mobil Corp. | ||||||
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | ||||||
| ROA, Industry | ||||||
| Energy | ||||||
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
1 2025 Calculation
ROA = 100 × Net income attributable to Chevron Corporation ÷ Total assets
= 100 × ÷ =
2 Click competitor name to see calculations.
The Return on Assets (ROA) exhibited significant fluctuation over the five-year period. Initial values demonstrated a substantial increase, followed by a consistent decline.
- Overall Trend
- The ROA began at 6.52% in 2021 and peaked at 13.76% in 2022, representing a considerable improvement in asset utilization efficiency. However, subsequent years witnessed a steady decrease, falling to 8.17% in 2023, 6.87% in 2024, and ultimately reaching 3.80% in 2025. This indicates a diminishing ability to generate profit from its asset base.
- 2021-2022 Performance
- The marked increase in ROA from 2021 to 2022 suggests a period of heightened profitability relative to the asset base. This improvement coincided with a substantial rise in net income attributable to the corporation, while the growth in total assets was comparatively moderate.
- 2022-2025 Performance
- The period from 2022 to 2025 shows a consistent downward trend in ROA. While net income decreased over this period, total assets experienced varying changes. The increase in total assets from 2024 to 2025, coupled with a further decline in net income, contributed to the most significant drop in ROA during this timeframe. This suggests that the corporation is deploying more capital into assets that are generating comparatively lower returns.
The declining ROA trend from 2022 through 2025 warrants further investigation to determine the underlying causes, such as changes in operational efficiency, asset mix, or industry dynamics.