ConocoPhillips (COP)

ConocoPhillips has several valuation methods for the various types of inventories and consistently uses the following methods for each type of inventory. ConocoPhillips' commodity-related inventories are recorded at cost primarily using the last-in, first-out (LIFO) basis. ConocoPhillips measures these inventories at the lower-of-cost-or-market in the aggregate. Any necessary lower-of-cost-or-market write-downs at year end are recorded as permanent adjustments to the LIFO cost basis. LIFO is used to better match current inventory costs with current revenues. Costs include both direct and indirect expenditures incurred in bringing an item or product to its existing condition and location, but not unusual/nonrecurring costs or research and development costs. Materials, supplies and other miscellaneous inventories, such as tubular goods and well equipment, are valued using various methods, including the weighted-average-cost method, and the first-in, first-out (FIFO) method, consistent with industry practice.

Source: ConocoPhillips, Annual Report

ConocoPhillips, Statement of Financial Position, Inventory

USD $ in millions

Source: Based on data from ConocoPhillips Annual Reports

Item	Description	The company
Crude oil and natural gas	The aggregate carrying amount as of the balance sheet date of unrefined petroleum and the liquid hydrocarbon components recovered from natural gas.	ConocoPhillips's crude oil and natural gas increased from 2015 to 2016 and from 2016 to 2017.
Materials and supplies	Aggregated amount of unprocessed materials to be used in manufacturing or production process and supplies that will be consumed.	ConocoPhillips's materials and supplies declined from 2015 to 2016 and from 2016 to 2017.
Inventories	Carrying amount (lower of cost or market) as of the balance sheet date of inventories less all valuation and other allowances. Excludes noncurrent inventory balances (expected to remain on hand past one year or one operating cycle, if longer).	ConocoPhillips's inventories declined from 2015 to 2016 but then slightly increased from 2016 to 2017.

Adjusting LIFO Inventory to FIFO (Current) Cost

USD $ in millions

ConocoPhillips's inventory value on Dec 31, 2017 would be $1,184  (in millions) if the FIFO inventory method was used instead of LIFO. ConocoPhillips's inventories, valued on a LIFO basis, on Dec 31, 2017 were $1,060 . ConocoPhillips's inventories would have been $124  higher than reported on Dec 31, 2017 if the FIFO method had been used instead.

ConocoPhillips, adjusted ratios

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	ConocoPhillips's adjusted current ratio improved from 2015 to 2016 and from 2016 to 2017.
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	ConocoPhillips's adjusted net profit margin improved from 2015 to 2016 and from 2016 to 2017.
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	ConocoPhillips's adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	ConocoPhillips's adjusted financial leverage increased from 2015 to 2016 but then declined significantly from 2016 to 2017.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	ConocoPhillips's adjusted ROE improved from 2015 to 2016 and from 2016 to 2017.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	ConocoPhillips's adjusted ROA improved from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Adjusted current ratio	A liquidity ratio calculated as adjusted current assets divided by current liabilities.	ConocoPhillips's adjusted current ratio improved from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by revenue.	ConocoPhillips's adjusted net profit margin improved from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Adjusted total asset turnover	An activity ratio calculated as total revenue divided by adjusted total assets.	ConocoPhillips's adjusted total asset turnover deteriorated from 2015 to 2016 but then improved from 2016 to 2017 exceeding 2015 level.

2017 Calculations

Ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	ConocoPhillips's adjusted financial leverage increased from 2015 to 2016 but then declined significantly from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity.	ConocoPhillips's adjusted ROE improved from 2015 to 2016 and from 2016 to 2017.

2017 Calculations

Ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	ConocoPhillips's adjusted ROA improved from 2015 to 2016 and from 2016 to 2017.