ConocoPhillips (NYSE:COP)

The analysis of the financial ratios over the five-year period reveals several significant trends and shifts in operational efficiency, liquidity, leverage, and profitability.

Total Asset Turnover

The reported and adjusted total asset turnover ratios demonstrate an overall increase from 0.3 in 2020 to a peak of 0.84 in 2022, followed by a decline to 0.45 by 2024. This pattern indicates a strengthening of asset utilization efficiency up to 2022, with a subsequent decrease in effectiveness through to 2024.

Current Ratio

Both reported and adjusted current ratios experienced a decline from relatively high values above 2.2 in 2020 to approximately 1.3 in 2024. This downward trend suggests a reduction in short-term liquidity, indicating a tightening in the company’s ability to cover current liabilities with current assets.

Debt to Equity and Debt to Capital Ratios

The debt to equity ratio steadily declined from approximately 0.5 in 2020 to about 0.33 in 2024, mirrored by a similar decrease in debt to capital ratios from roughly 0.34 to 0.25. These trends reflect a gradual reduction in leverage, implying a strategic move toward lower reliance on debt financing over the period analyzed.

Financial Leverage

Reported financial leverage decreased slightly from 2.1 in 2020 to 1.89 in 2024, with adjusted figures showing a similar decline from 1.87 to 1.61. The consistent reduction aligns with the observed deleveraging trend seen in the debt ratios.

Net Profit Margin

Net profit margin showed a dramatic recovery from negative values in 2020 (-14.38% reported, -18.24% adjusted) to strong positive margins surpassing 20% in 2022 and 2023. The margin then retraced somewhat, ending at 16.89% (reported) and 16.14% (adjusted) in 2024. This fluctuation suggests a period of significant operational recovery and profitability enhancement followed by moderation in profit generation efficiency.

Return on Equity (ROE)

ROE followed a comparable trajectory, moving from negative territory in 2020 to a pronounced peak of 38.91% (reported) and 35.25% (adjusted) in 2022. Subsequently, ROE declined to 14.27% and 11.61% respectively by 2024. The sharp increase indicates substantial value creation during the middle of the period, with a tapering in later years potentially reflecting the impact of lower asset turnover and narrowing profit margins.

Return on Assets (ROA)

The ROA improved significantly from around -4.3% in 2020 to approximately 20% (reported) and 20.92% (adjusted) in 2022, followed by a decrease to 7.53% (reported) and 7.2% (adjusted) by 2024. This improvement and subsequent decline are consistent with patterns in profit margins and asset utilization, indicating profitable asset management early on, which eased in the latter years.

In summary, the period from 2020 to 2024 reflects an overall recovery phase characterized by enhanced profitability and efficiency up to 2022, with subsequent moderation through 2024. The company reduced its debt exposure and financial leverage, although liquidity ratios declined, suggesting a possible trade-off between optimizing capital structure and maintaining short-term financial flexibility. Profitability ratios indicate strong operational performance in the mid-period, which cooled in later years, likely impacted by the reduced asset turnover and slightly diminished profit margins.

Sales and Other Operating Revenues

There is a significant increase in sales and operating revenues from 2020 to 2022, rising from 18,784 million US dollars in 2020 to a peak of 78,494 million US dollars in 2022. However, this is followed by a marked decline in the subsequent years, decreasing to 56,141 million US dollars in 2023 and further to 54,745 million US dollars in 2024.

Total Assets

Total assets show a consistent upward trend across the periods, growing from 62,618 million US dollars in 2020 to 122,780 million US dollars in 2024. The increase is steady with moderate increments each year, indicating expansion or asset acquisition over the timeframe.

Reported Total Asset Turnover

The asset turnover ratio demonstrates fluctuations corresponding to changes in sales and assets. It increases from 0.3 in 2020 to 0.84 in 2022, reflecting improved efficiency in generating revenues relative to assets. This is followed by a decline to 0.59 in 2023 and further to 0.45 in 2024, indicating a reduction in operational efficiency or lower sales relative to the asset base in these years.

Adjusted Total Assets and Adjusted Total Asset Turnover

The adjusted total assets mirror the trend of total assets closely, increasing each year from 62,346 million US dollars in 2020 to 122,670 million US dollars in 2024. The adjusted total asset turnover ratio follows an identical pattern to the reported total asset turnover, peaking in 2022 and decreasing thereafter. This consistency suggests no major adjustments significantly impacting asset valuation or turnover calculations during this period.

Summary

The data reveals a period of substantial growth in sales and asset base up to 2022, followed by a downturn in sales accompanied by continued growth in assets. This pattern results in a peak in asset turnover efficiency in 2022, which subsequently declines. The declining turnover ratios in the final years may imply challenges in utilizing assets effectively to generate revenues or a strategic increase in asset holdings that has yet to translate into proportional sales growth.

The financial data indicates several notable trends in liquidity and working capital management over the analyzed periods.

Current Assets

Current assets showed a rising trend from 2020 to 2022, increasing from 12,066 million US dollars to a peak of 18,749 million. However, this upward momentum reversed in 2023, with current assets decreasing to 14,330 million, followed by a modest rebound to 15,647 million in 2024.

Current Liabilities

Current liabilities exhibited a sharp increase between 2020 and 2021, more than doubling from 5,366 million to 12,021 million US dollars. After a moderate increase in 2022 reaching 12,847 million, liabilities decreased in 2023 to 10,005 million, before rising again in 2024 to 12,124 million. This volatility in liabilities suggests fluctuating short-term obligations or changes in operational financing strategies.

Reported Current Ratio

The reported current ratio declined significantly from a strong liquidity position of 2.25 in 2020 to 1.34 in 2021, indicating a considerable reduction in short-term solvency. Despite slight improvements in 2022 and 2023, with ratios of 1.46 and 1.43 respectively, the ratio dropped again to 1.29 in 2024. Overall, the ratio remains below the 2020 level, reflecting tighter liquidity conditions.

Adjusted Current Assets and Adjusted Current Ratio

Adjusted current assets mirrored the trends of reported current assets, with a peak in 2022 at 18,900 million US dollars, followed by a decline in 2023 and a partial recovery in 2024. The adjusted current ratio followed a similar pattern as the reported ratio, decreasing sharply from 2.27 in 2020 to 1.36 in 2021, then stabilizing around 1.44 in 2023 before dropping slightly to 1.30 in 2024. This consistency suggests that adjustments made did not materially alter the liquidity profile but confirmed the general trend of decreasing liquidity over time.

In summary, the data reflects a period of increasing current assets until 2022, partially offset by rising current liabilities, leading to a marked decline in liquidity ratios starting in 2021. Despite some recovery attempts in subsequent years, liquidity remains constrained compared to the initial period. These trends could signal challenges in managing short-term financial obligations or strategic shifts in working capital financing.

Total Debt

Total debt exhibited fluctuations over the observed periods. It increased notably from 15,369 million USD at the end of 2020 to 19,934 million USD by the end of 2021. Subsequently, it decreased to 16,643 million USD in 2022, before rising again to 18,937 million USD in 2023 and reaching its highest value of 24,324 million USD at the end of 2024.

Common Stockholders' Equity

Common stockholders’ equity demonstrated a consistent upward trend throughout the period. Starting at 29,849 million USD in 2020, it increased steadily each year, reaching 45,406 million USD in 2021, 48,003 million USD in 2022, 49,279 million USD in 2023, and culminating at 64,796 million USD by the end of 2024. This indicates substantial growth in equity capital over the timeframe.

Reported Debt to Equity Ratio

The reported debt to equity ratio showed a declining trend over the first three years, decreasing from 0.51 in 2020 to 0.35 in 2022. This decline suggests an improvement in the company's leverage position relative to equity. However, the ratio increased slightly to 0.38 in 2023 and remained at that level in 2024, indicating a modest rise in leverage or debt relative to equity in the last two years.

Adjusted Total Debt

The adjusted total debt mirrored the pattern observed in total debt, increasing from 16,154 million USD in 2020 to 20,601 million USD in 2021. It then declined to 17,188 million USD in 2022 before rising again to 19,634 million USD in 2023 and reaching 25,348 million USD in 2024, the highest value recorded in the period.

Adjusted Total Equity

Adjusted total equity consistently increased across all years, starting at 33,324 million USD in 2020 and growing to 51,498 million USD in 2021. Continued growth was seen in 2022 and 2023 with values of 55,639 million USD and 57,931 million USD respectively, culminating at 76,112 million USD in 2024. This consistent rise reinforces the improvement in the company's equity base.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio declined steadily from 0.48 in 2020 to 0.31 in 2022, indicating a reduction in leverage relative to adjusted equity. This was followed by a slight increase to 0.34 in 2023 before marginally decreasing to 0.33 in 2024. Overall, the ratio suggests a generally conservative leverage position with moderate fluctuations towards the end of the period.

Total Debt

The total debt shows a general upward trend over the observed period. It increased from $15,369 million in 2020 to $19,934 million in 2021, followed by a decline to $16,643 million in 2022. Subsequently, the debt rose again to $18,937 million in 2023 and continued increasing to $24,324 million in 2024, marking the highest level within the timeframe.

Total Capital

Total capital experienced significant growth overall, rising from $45,218 million in 2020 to $65,340 million in 2021. Although it slightly decreased to $64,646 million in 2022, it recovered and increased to $68,216 million in 2023, followed by a notable jump to $89,120 million in 2024. This indicates strong capital formation or appreciation.

Reported Debt to Capital Ratio

The reported debt to capital ratio declined from 0.34 in 2020 to 0.31 in 2021 and further to 0.26 in 2022. There was a slight increase to 0.28 in 2023, before decreasing marginally to 0.27 in 2024. This suggests an overall improvement in capital structure management, with debt comprising a smaller proportion of total capital over time, despite minor fluctuations.

Adjusted Total Debt

The adjusted total debt closely mirrors the pattern of reported total debt, starting at $16,154 million in 2020 and rising to $20,601 million in 2021. It then dropped to $17,188 million in 2022, before ascending again to $19,634 million in 2023 and reaching $25,348 million in 2024. The adjusted figures are consistently slightly higher than the reported values.

Adjusted Total Capital

Adjusted total capital increased from $49,478 million in 2020 to $72,099 million in 2021 and continued to grow modestly to $72,827 million in 2022. It saw further growth to $77,565 million in 2023 and a substantial rise to $101,460 million in 2024. This steady upward trajectory highlights increasing capital adequacy.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio exhibits a downward trend from 0.33 in 2020 to 0.29 in 2021 and then to a low of 0.24 in 2022. It stabilized around 0.25 in both 2023 and 2024. This reflects a consistent reduction in leverage when considering adjusted figures, indicating stronger financial stability or reduced reliance on debt relative to capital.

The financial data reveals a positive growth trend across most key metrics over the five-year period ending in 2024. Total assets have exhibited a consistent and substantial increase, rising from US$62.6 billion in 2020 to US$122.8 billion in 2024. This nearly doubling of total assets indicates significant expansion in the company's asset base.

Similarly, common stockholders’ equity has shown a steady upward trajectory, increasing from approximately US$29.8 billion in 2020 to US$64.8 billion in 2024. This doubling of equity suggests enhanced value creation for shareholders and a strengthening capital base.

Reported financial leverage, defined as the ratio of total assets to common stockholders’ equity, has gradually decreased from 2.1 in 2020 to 1.89 in 2024. This decline indicates a modest reduction in reliance on debt financing relative to equity, reflecting a potentially more conservative or stable capital structure over time.

Adjusting the figures for total assets and total equity presents a consistent narrative. Adjusted total assets increased in line with reported figures, from approximately US$62.3 billion to US$122.7 billion, confirming the asset growth trend. Adjusted equity rose from US$33.3 billion to US$76.1 billion, showing a similar strong improvement in equity position.

The adjusted financial leverage ratio decreased steadily from 1.87 in 2020 to 1.61 in 2024. This trend suggests an improving equity cushion relative to adjusted assets, implying enhanced financial stability and potentially lower financial risk.

Total Assets

Demonstrated consistent growth, nearly doubling over five years, indicating substantial asset accumulation and expansion.

Common Stockholders’ Equity

Showed a strong upward trend, doubling during the period, reflecting improved shareholder value and capital base strengthening.

Reported Financial Leverage

Gradually declined, signaling a slight reduction in debt reliance relative to equity and a more balanced capital structure.

Adjusted Total Assets and Equity

Both increased steadily, supporting the asset and equity growth observed in reported figures, and underscoring solid financial foundation.

Adjusted Financial Leverage

Fell consistently, indicating enhanced financial stability through lowered leverage and risk.

Overall, the data reflects a company expanding its asset base and strengthening equity over time, while simultaneously improving its leverage ratios. This pattern suggests effective management of growth and capital structure aiming at sustainable financial health.

The financial data reveals several key trends in profitability and revenue generation over the five-year period.

Net Income (Loss) Attributable to ConocoPhillips

The company experienced a significant turnaround from a net loss of US$2.7 billion in 2020 to a net profit of US$8.1 billion in 2021. This positive trajectory continued with a peak net income of approximately US$18.7 billion in 2022, before declining to US$10.96 billion in 2023 and further to US$9.25 billion in 2024. Despite the decrease after 2022, net income remained substantially above the 2020 level, indicating improved overall profitability compared to the initial period.

Sales and Other Operating Revenues

Revenue figures show a consistent increase from US$18.8 billion in 2020 to a high of nearly US$78.5 billion in 2022. This was followed by a notable reduction to US$56.1 billion in 2023, with a slight decline continuing into 2024 at US$54.7 billion. The peak revenue in 2022 suggests a strong market or operational performance that year, while the subsequent decline could reflect market adjustments or strategic changes.

Reported Net Profit Margin

The reported net profit margin moved from a negative margin of -14.38% in 2020 to positive margins in the following years, reaching a maximum of 23.8% in 2022. After that, the margin decreased but remained relatively strong at 19.52% in 2023 and 16.89% in 2024. This progression underscores a recovery in operational efficiency and profitability post-2020, although margins experienced some pressure during the latter years.

Adjusted Net Income (Loss)

Adjusted net income follows a similar pattern to reported net income, starting with a loss of US$3.4 billion in 2020, turning into substantial gains in subsequent years. It rose to US$9.9 billion in 2021 and peaked at US$19.6 billion in 2022, before declining to US$12.4 billion in 2023 and US$8.8 billion in 2024. The adjusted figures reinforce the trend of profitability recovery and highlight the smoothing of one-time or non-recurring items impacting the bottom line.

Adjusted Net Profit Margin

Adjusted net profit margin also improved markedly from -18.24% in 2020 to a peak of 24.99% in 2022, demonstrating enhanced profitability when removing irregular items. Margins then declined to 22.04% in 2023 and fell further to 16.14% in 2024. Despite the decrease, the adjusted margin remained positive and significantly higher than the initial year, indicating a consistent ability to generate profits from core operations.

In summary, the data reflects a strong recovery and growth phase in 2021 and 2022 across profitability and revenue metrics, followed by a period of contraction or normalization in 2023 and 2024. Profit margins, both reported and adjusted, peaked in 2022 and experienced moderate declines thereafter, yet they remained above levels seen prior to 2021. The overall trend suggests improved operational performance and resilience with some cyclical or market-related variability in the later years.

The financial data demonstrates significant fluctuations and overall positive trends in profitability and equity over the five-year period ending in 2024.

Net Income (Loss) Attributable to ConocoPhillips (US$ in millions)

There is a pronounced recovery from a substantial loss of -2,701 million in 2020 to a peak profit of 18,680 million in 2022. Following this peak, net income declines to 10,957 million in 2023 and further to 9,245 million in 2024, indicating some volatility but maintaining profitability above the 2021 level.

Common Stockholders’ Equity (US$ in millions)

Equity shows a steady and strong upward trajectory over the period. Starting at 29,849 million in 2020, it increases annually reaching 64,796 million by 2024, reflecting growth in the company’s net asset base and retained earnings.

Reported Return on Equity (ROE) (%)

The reported ROE moves from a negative -9.05% in 2020 to a peak of 38.91% in 2022, aligning with the net income trend. After 2022, the ROE declines to 22.23% in 2023 and further to 14.27% in 2024, indicating diminishing but still healthy profitability relative to equity.

Adjusted Net Income (Loss) (US$ in millions)

Adjusted net income follows a similar pattern to reported net income, with a loss of -3,427 million in 2020 turning into robust profits thereafter. It peaks at 19,614 million in 2022, slightly higher than reported net income, before moderately declining to 8,838 million in 2024.

Adjusted Total Equity (US$ in millions)

Adjusted total equity consistently increases over the period, from 33,324 million in 2020 to 76,112 million in 2024. This steady rise supports the company’s financial stability and expansion of equity base on an adjusted basis.

Adjusted Return on Equity (ROE) (%)

Adjusted ROE mirrors the reported ROE trends but starts from a lower negative value of -10.28% in 2020. It climbs impressively to 35.25% in 2022 and then reduces to 21.35% in 2023 and 11.61% in 2024. This shows that while profitability relative to equity remains strong, there is a notable deceleration in recent years.

In summary, the company experienced a significant turnaround starting in 2021 following losses in 2020, achieving peak profitability and high returns on equity in 2022. However, both profitability and returns on equity have softened since then, despite continuous growth in equity levels. The adjusted figures reinforce these observations, indicating robust but somewhat tempered performance in recent years.

The financial data reveals several notable trends over the five-year period under review. Net income attributable to the company presents a significant recovery and growth phase. Starting from a substantial loss of 2,701 million US dollars in 2020, net income surged to positive territory in 2021, reaching 8,079 million US dollars. This positive momentum continued with a peak at 18,680 million US dollars in 2022, followed by a decline in the subsequent years to 10,957 million US dollars in 2023 and 9,245 million US dollars in 2024.

Total assets demonstrate a consistent upward trend throughout the period. From 62,618 million US dollars at the end of 2020, total assets increased steadily to 90,661 million US dollars in 2021, then to 93,829 million US dollars in 2022, followed by moderate growth to 95,924 million US dollars in 2023 and a more pronounced rise to 122,780 million US dollars in 2024. This indicates ongoing asset accumulation and potentially expanded operational capacity or investment.

Reported return on assets (ROA) mirrors the movements in net income, with an initial negative value of -4.31% in 2020, shifting to a positive 8.91% in 2021, peaking notably at 19.91% in 2022. After this peak, the ROA decreased to 11.42% in 2023 and further to 7.53% in 2024, reflecting a reduction in profitability relative to asset base in the last two years despite still positive returns.

Adjusted net income figures follow a similar pattern to reported net income but consistently show slightly lower absolute values in loss years and higher in profit years. The adjusted net income rose from a loss of 3,427 million US dollars in 2020 to gains of 9,855 million and 19,614 million US dollars in 2021 and 2022, respectively. However, a decline is again observed in 2023 and 2024 to 12,371 million and 8,838 million US dollars.

Adjusted total assets are in close alignment with reported total assets, confirming the reliability of the asset base values used. The growth trajectory remains consistent, increasing from 62,346 million US dollars in 2020 to 122,670 million US dollars in 2024.

Adjusted ROA presents a trend comparable to the reported ROA but with slightly more pronounced changes. Starting at -5.5% in 2020, it jumps to 10.88% in 2021, peaks at 20.92% in 2022, then declines to 12.92% in 2023 and further to 7.2% in 2024. This trend reinforces the observed profitability pattern, showing a strong recovery after 2020, a peak in 2022, and a moderation thereafter.

Summary of Trends:

- Initial loss in profitability and net income in 2020 followed by significant recovery and growth in 2021 and 2022.

- Peak profitability and return on assets recorded in 2022.

- Decline in net income and ROA in the two years following 2022, though remaining positive.

- Consistent growth in total and adjusted total assets throughout the period, with a marked increase in 2024.

- Adjusted financial metrics reinforce the patterns observed in the reported figures, confirming reliability.

Overall, the data suggests a strong recovery from losses in 2020 to robust profitability in 2022, supported by an expanding asset base. The moderation in profitability post-2022 warrants attention to factors influencing earnings efficiency despite an increase in total assets.