ConocoPhillips (NYSE:COP)

The analysis of the financial data reveals a consistent upward trend across all three categories of inventories over the five-year period.

Crude oil and natural gas

This category shows a steady increase from 461 million US dollars in 2020 to 907 million US dollars in 2024. The growth is gradual between 2020 and 2023, but there is a more pronounced rise in 2024, indicating a possible expansion in reserves or valuation increase toward the end of the period.

Materials and supplies

The values in this category exhibit a continuous upward trajectory, beginning at 541 million US dollars in 2020 and rising to 902 million US dollars by 2024. The increase accelerates notably from 2022 onwards, which might suggest increased procurement or accumulation of materials in preparation for higher operational activities.

Inventories

Total inventories reflect a consistent rise from 1002 million US dollars in 2020 to 1809 million US dollars in 2024. The increments show an accelerating pattern, particularly between 2023 and 2024. This growth aligns with the trends in crude oil, natural gas, and materials, indicating expanding inventory holdings over time.

Overall, these trends imply an increase in inventory investment, possibly reflecting strategic stockpiling or response to market conditions that necessitate holding greater resources. The rising inventories may impact working capital and cash flow management considerations.

The financial data over the five-year period reveals consistent growth in both reported and adjusted inventory values. Reported inventories increased from 1,002 million USD in 2020 to 1,809 million USD in 2024. Adjusted inventories, which account for the LIFO reserve, show a similar upward trajectory, rising from 1,089 million USD in 2020 to 1,922 million USD in 2024. This indicates a steady accumulation of inventory assets over the period.

Current assets also demonstrate an overall increase, though with some fluctuations. Reported current assets grew from 12,066 million USD in 2020 to a peak of 18,749 million USD in 2022, then declined to 14,330 million USD in 2023 before a modest recovery to 15,647 million USD in 2024. Adjusted current assets follow the same pattern but at marginally higher values due to LIFO adjustments, highlighting slight differences in inventory valuation effects on current assets.

Total assets show a significant upward trend throughout the period. Reported total assets increased markedly from 62,618 million USD in 2020 to 122,780 million USD in 2024, nearly doubling over five years. Adjusted total assets closely mirror this pattern, indicating that inventory valuation differences have a minimal overall impact on total asset measurement but do slightly increase the asset base.

Common stockholders’ equity exhibits a strong rising trend as well, growing from 29,849 million USD in 2020 to 64,796 million USD in 2024 on a reported basis. Adjusted equity slightly exceeds reported equity at all points, consistent with the recognition of LIFO adjustments increasing equity valuation. This steady equity growth reflects retained earnings accumulation and potentially capital inflows.

Net income attributable to the company shows substantial volatility. In 2020, the company reported a net loss of around 2,700 million USD. This turned into positive and progressively higher earnings in 2021 and 2022, peaking at approximately 18,680 million USD reported in 2022. However, earnings declined in 2023 and 2024 to levels around 9,000 to 11,000 million USD. Adjusted net income closely follows the reported figures, with minor differences likely due to inventory cost accounting adjustments, indicating that inventory valuation methods have limited influence on net profitability trends.

Inventory Trends

Steady increase in inventory values, with adjusted inventories consistently higher than reported, reflecting LIFO reserve adjustments.

Current Assets

Growth with fluctuations in 2023; adjusted current assets are slightly higher than reported due to inventory adjustments.

Total Assets

Marked overall growth, nearly doubling over five years, with minimal divergence between reported and adjusted measurements.

Common Stockholders’ Equity

Considerable increase, with adjusted figures consistently surpassing reported amounts, indicating positive LIFO reserve impact on equity.

Net Income

Significant turnaround from loss in 2020 to strong profit in 2022, followed by a decline in 2023 and 2024; adjusted results closely track reported figures.

In summary, the data indicates robust asset and equity growth alongside volatile net income performance. Inventory and related adjustments modestly elevate asset and equity levels but do not materially affect profit trends. The inventory increases suggest expanding operational scale or inventory holding strategies, while fluctuations in net income possibly reflect market or operational conditions impacting profitability.

Current Ratio

The reported current ratio exhibits a clear declining trend from 2.25 in 2020 to 1.29 in 2024, indicating a progressive decrease in short-term liquidity over this period. The adjusted current ratio, which accounts for inventory LIFO reserve adjustments, closely mirrors the reported figures but remains slightly higher each year, suggesting a minor positive impact of inventory adjustments on perceived liquidity.

Net Profit Margin

There is a notable recovery from a negative net profit margin of approximately -14% in 2020 to a peak of about 23.8% in 2022. Following this peak, the margin declines gradually to around 16.9% by 2024. Adjusted margins track closely with reported values, indicating limited effect of inventory adjustments on profitability metrics. The data reveals a significant rebound in profitability post-2020, followed by a moderate reduction.

Total Asset Turnover

Reported total asset turnover shows an improvement from 0.3 in 2020 to a high point of 0.84 in 2022, indicating enhanced efficiency in asset utilization during this timeframe. However, it declines to 0.45 by 2024, suggesting reduced asset utilization efficiency over the last two years. Adjusted turnover data is almost identical, reinforcing that inventory valuation adjustments have minimal influence on asset turnover ratios.

Financial Leverage

Financial leverage demonstrates a gradual decline from 2.1 in 2020 to 1.89 by 2024, indicating a modest reduction in reliance on debt financing or increased equity financing over time. Adjusted leverage remains almost identical to reported figures, illustrating that inventory adjustments do not affect leverage calculations significantly.

Return on Equity (ROE)

ROE moves from a negative position in 2020 to a significant peak of around 38.9% in 2022, evidencing a strong turnaround in shareholder returns. This peak is followed by a decrease to approximately 14.3% by 2024. Adjusted ROE figures mirror the trends and levels of reported data, suggesting negligible impact from the inventory adjustments on equity profitability.

Return on Assets (ROA)

The ROA follows a similar trajectory as ROE, transitioning from negative values in 2020 to a high near 20% in 2022, then declining to roughly 7.5% in 2024. Both reported and adjusted ROA figures are closely aligned, indicating minimal effect from inventory adjustments on asset profitability.

The analysis of the financial data over the five-year period reveals several notable trends.

Current Assets (Reported and Adjusted)

Reported current assets increased steadily from 12,066 million USD at the end of 2020 to a peak of 18,749 million USD in 2022. Subsequently, there was a decline to 14,330 million USD in 2023, followed by a moderate recovery to 15,647 million USD in 2024.

Adjusted current assets, which account for inventory LIFO reserve adjustments, closely mirror the reported figures. They show the same general trend: an increase from 12,153 million USD in 2020 to 18,898 million USD in 2022, a decline to 14,421 million USD in 2023, and a slight increase again to 15,760 million USD in 2024. The adjusted values are consistently slightly higher than the reported figures throughout the period, emphasizing the impact of inventory accounting adjustments on asset valuation.

Current Ratio (Reported and Adjusted)

The reported current ratio exhibits a marked decline from 2.25 at the end of 2020 to 1.34 in 2021, suggesting a reduction in liquidity relative to current liabilities. Thereafter, there is a modest recovery with values stabilizing around 1.43 to 1.46 between 2022 and 2023, before a slight drop to 1.29 in 2024.

The adjusted current ratio follows a similar trend, beginning at 2.26 in 2020, decreasing sharply to 1.36 in 2021, then stabilizing near 1.44 to 1.47 during 2022 and 2023, and ending slightly lower at 1.30 in 2024. The small but consistent difference between adjusted and reported ratios indicates the effect of LIFO reserve adjustments on liquidity metrics.

Overall, the data reflect an initial period of asset growth and relatively strong liquidity in 2020, followed by a sharp contraction in liquidity despite continued asset growth into 2022. The reversal in asset values and stabilization of liquidity ratios in the subsequent years suggest an adjustment period, potentially reflecting broader market or operational challenges. The consistent proximity between reported and adjusted figures confirms that inventory accounting adjustments have a stable but moderate influence on the reported financial position and liquidity.

Net Income (Loss) Attributable to ConocoPhillips

There is a notable recovery in net income from a significant loss of -2701 million USD in 2020 to a positive 8079 million USD in 2021, followed by a substantial increase to 18680 million USD in 2022. Subsequently, net income declines to 10957 million USD in 2023 and further decreases to 9245 million USD in 2024, indicating a downward trend after the peak in 2022.

Adjusted Net Income (Loss) Attributable to ConocoPhillips

The adjusted net income closely parallels the reported figures, starting at a loss of -2769 million USD in 2020 and rising to 8243 million USD in 2021. It peaks at 18578 million USD in 2022, then experiences a decline to 10899 million USD in 2023 and a slight increase to 9267 million USD in 2024. The minor differences between reported and adjusted figures suggest limited adjustments impact the overall trend.

Reported Net Profit Margin

The reported net profit margin mirrors net income trends, shifting from a negative margin of -14.38% in 2020 to a positive 17.63% in 2021 and then increasing significantly to 23.8% in 2022. Margins subsequently decrease to 19.52% in 2023 and 16.89% in 2024, indicating a reduction in profitability percentage-wise despite remaining positive.

Adjusted Net Profit Margin

The adjusted net profit margin exhibits a pattern consistent with reported margins: it begins at -14.74% in 2020, rises sharply to 17.99% in 2021, peaks at 23.67% in 2022, and then falls to 19.41% in 2023 and 16.93% in 2024. The marginal differences between reported and adjusted margins reflect limited impact from inventory and other LIFO reserve adjustments.

Overall Financial Trends

The data reveals a strong recovery and growth phase between 2020 and 2022 with both net income and profit margins improving markedly. The peak in 2022 is followed by a consistent decline in subsequent years through 2024, although profitability remains positive. Adjustments for inventory LIFO reserve have minimal effect on the overall performance metrics, suggesting the core operational results drive financial outcomes.

The analysis of the reported and inventory LIFO reserve adjusted financial data over the five-year period reveals notable trends in both total assets and total asset turnover ratios.

Total Assets

The reported total assets value shows a consistent upward trend from 62,618 million US dollars in 2020 to 122,780 million US dollars in 2024. This represents a nearly doubling of asset base over the five-year span. The adjusted total assets, which account for inventory LIFO reserve adjustments, follow a very similar pattern, increasing from 62,705 million US dollars in 2020 to 122,893 million US dollars in 2024. The slight premium of adjusted assets over reported assets each year suggests minor LIFO adjustments to inventory values that marginally increase total asset figures.

Total Asset Turnover

Regarding asset efficiency, the reported total asset turnover ratio initially rises sharply from 0.3 in 2020 to a peak of 0.84 in 2022, indicating improved utilization of assets to generate sales or revenue. However, after 2022, the turnover ratio declines to 0.59 in 2023 and further to 0.45 in 2024. This pattern indicates that despite continued growth in asset base, the company experiences diminishing efficiency in asset utilization post-2022. Adjusted total asset turnover ratios mirror the reported figures very closely, suggesting that the inventory LIFO reserve adjustments have negligible impact on turnover calculations.

Insights

The combination of a steadily increasing asset base with declining turnover ratios in the latter years may indicate that while the company is expanding its assets, the growth in revenue or sales is not keeping pace proportionally. This could suggest potential overinvestment in assets or operational inefficiencies emerging after 2022. The nearly parallel behavior of reported versus adjusted figures implies that inventory valuation adjustments related to LIFO reserves do not significantly distort the overall asset or turnover trends.

The financial data presents a comprehensive overview of the company's reported and inventory LIFO reserve adjusted figures over a five-year period ending December 31, 2024. The analysis focuses on total assets, common stockholders’ equity, and financial leverage ratios.

Total Assets

The reported total assets show a consistent upward trajectory, increasing from US$62,618 million in 2020 to US$122,780 million in 2024. This nearly doubles the asset base within five years, with notable growth particularly between 2023 and 2024. The adjusted total assets, which take into account inventory LIFO reserve adjustments, reflect a similar pattern and magnitude of growth, closely aligning with the reported figures but slightly higher in each corresponding year. This suggests relatively minor but consistent upward inventory value adjustments over time.

Common Stockholders’ Equity

Common stockholders’ equity also demonstrates steady growth across the period. The reported equity rises from US$29,849 million in 2020 to US$64,796 million by 2024, more than doubling similarly to total assets. The adjusted equity values, accounting for inventory adjustments, maintain a slightly higher level than the reported figures throughout the timeline. The progression indicates strengthening equity position and retained earnings consistent with asset growth and likely profitable operations or capital increases.

Financial Leverage

The reported financial leverage ratio, defined as total assets divided by common stockholders’ equity, shows a gradual decline from 2.1 in 2020 to 1.89 in 2024. This decline implies a reduction in reliance on debt financing relative to equity, indicating a strengthening capital structure that is becoming less leveraged over time. The adjusted financial leverage ratios mirror this trend very closely, reinforcing the conclusion that after adjusting for LIFO reserves, the company’s financial leverage is similarly decreasing.

Overall, the data reveals a pattern of robust asset and equity growth accompanied by improving financial leverage ratios, reflecting enhanced financial stability and a strong equity base. The close alignment between reported and adjusted measures suggests that LIFO inventory accounting adjustments have a minimal but consistent effect on the financial position metrics, not altering the overall interpretations significantly.

Net Income Trends

The reported net income attributable to the company demonstrates significant volatility, beginning with a substantial loss of -$2,701 million in 2020, followed by a strong recovery to $8,079 million in 2021, and further growth to $18,680 million in 2022. However, this is followed by a decline in the subsequent years, with net income decreasing to $10,957 million in 2023 and $9,245 million in 2024. The adjusted net income follows a very similar trajectory, with minor variations in magnitude, indicating that adjustments for the LIFO reserve have a minimal effect on this profitability metric over the periods examined.

Equity Evolution

Common stockholders’ equity, both reported and adjusted, shows a positive growth pattern throughout the five-year period. Starting at approximately $29,800 million in 2020, equity rises notably each year, with a particularly marked increase observed in 2024, reaching about $64,900 million on an adjusted basis. The adjustments appear to lead to slightly higher equity values each year, but the overall upward trend remains consistent, suggesting steady capitalization or retained earnings growth.

Return on Equity (ROE) Dynamics

Return on equity reflects significant fluctuations aligned with the net income trends. Initially, the company experiences negative ROE values in 2020 (-9.05% reported and -9.25% adjusted), indicating unprofitable operations or losses relative to shareholder equity. This is succeeded by a sharp improvement in 2021 and 2022, with ROE peaking in 2022 at around 39% (reported and adjusted), reflecting highly profitable years. Subsequently, ROE declines in 2023 and 2024 to roughly 14–22%, consistent with the decreasing net income in those years. The adjusted ROE closely mirrors the reported ROE, validating that inventory reserve adjustments exert minimal influence on profitability ratios.

Overall Observations

The financial data reveals a recovery and growth phase between 2021 and 2022, followed by a reduction in profitability in the last two years. Equity growth remains strong and continuous throughout the period, indicating a solid financial foundation despite fluctuations in income and return measures. The consistency between reported and LIFO reserve-adjusted figures suggests that inventory accounting methodology changes do not substantially alter the company’s financial performance assessment.

The financial analysis reveals several notable trends across the five-year period ending in 2024. Net income, both reported and adjusted, demonstrates significant volatility but overall shows an improving trend following a negative result in 2020.

Net Income Analysis

Reported net income attributable to the company moves from a loss of $2,701 million in 2020 to a substantial profit peaking at $18,680 million in 2022, before declining to $9,245 million in 2024. Adjusted net income mirrors this pattern closely, with slightly higher values, suggesting that inventory LIFO reserve adjustments do not drastically alter the profitability picture.

Total Assets

Total assets exhibit consistent growth throughout the period. Reported total assets rise from $62,618 million in 2020 to $122,780 million in 2024, nearly doubling over five years. Adjusted total assets reflect a very similar trajectory, indicating that LIFO reserve adjustments have minimal impact on the total asset base.

Return on Assets (ROA)

The reported ROA follows the earnings trend, improving significantly from -4.31% in 2020 to 19.91% in 2022, then declining to 7.53% in 2024. The adjusted ROA values present a similar trend with slight deviations, corroborating the patterns observed in net income. This indicates that operational efficiency and profitability on asset investment peaked in 2022 before softening.

Overall, the data reveals a recovery from 2020 losses to strong profitability and asset growth in subsequent years, peaking in 2022. The decline in profitability and ROA after 2022 may reflect market conditions or company-specific challenges. Inventory LIFO reserve adjustments appear to have a minimal effect on the overall financial performance and asset valuation trends.