ConocoPhillips (NYSE:COP)

Return on Assets (ROA)

The ROA shows a significant improvement beginning in late 2020, recovering from a negative value of -4.31% to positive territory by the end of that year. It then rises steadily throughout 2021 and peaks in the first quarter of 2022 at 19.91%. After this peak, there is a gradual decline in ROA across subsequent quarters through 2025, ending around 7.49%. This pattern indicates a strong recovery phase followed by a stabilization period with moderate returns on assets.

Financial Leverage

Financial leverage remains relatively stable over the entire period, fluctuating narrowly between 1.87 and 2.10. It starts at 2.08 in early 2020, decreases slightly below 2, and generally hovers close to 1.9 thereafter. The stability in leverage suggests consistent capital structure management without significant increases in debt relative to equity over time.

Return on Equity (ROE)

The ROE mirrors the trend observed in ROA, with a steep recovery from a low of -9.05% in late 2020 to a peak of 38.91% in the first quarter of 2022. After reaching this high point, ROE declines steadily, reflecting a reduction in profitability or efficiency in generating returns on equity. By mid-2025, ROE stabilizes around 14%, indicating sustained but lower profitability compared to the peak period.

Overall, the company experienced a substantial recovery in profitability metrics starting in late 2020, with both ROA and ROE reaching peak levels in early 2022. Following this period, there is a consistent downward trend in returns, though they remain positive and relatively stable. Financial leverage remains constant, suggesting no major shifts in financial risk or capital structure. The data reflects a cycle of recovery and stabilization in financial performance over the observed timeframe.

Net Profit Margin

The net profit margin demonstrated a significant negative value of -14.38% at the end of 2020, indicating a challenging operating environment during that period. From the first quarter of 2021 onwards, there was a consistent upward trend, reaching a peak around mid-2022 at approximately 24%. This improvement suggests enhanced profitability over the period. However, after this peak, the margin gradually declined through 2023 and is projected to continue a downward trend into 2025, stabilizing around 16%. This pattern indicates that while profitability increased significantly after the initial negative period, some erosion in margin is expected in the subsequent years.

Asset Turnover

Asset turnover showed a clear growth trajectory beginning in early 2021, starting at 0.3 and climbing steadily to reach nearly 0.84 by the fourth quarter of 2022. This reflects increasing efficiency in using assets to generate revenue. Following this peak, the ratio experienced a gradual decline through 2023 and into the forecasted years, stabilizing around 0.45 to 0.47 by mid-2025. The decreasing asset turnover ratios in later periods may signal a reduction in operational efficiency or an accumulation of assets not immediately contributing to revenue generation.

Financial Leverage

Financial leverage remained relatively stable throughout the entire timeline, fluctuating slightly between approximately 1.87 and 2.10. This consistency suggests a stable capital structure with no significant changes in the proportion of debt to equity. The leverage hovered mostly below 2.0 in the forecasted future quarters, indicating a moderate use of debt financing and potentially conservative financial management.

Return on Equity (ROE)

The return on equity followed a similar trend to net profit margin, starting from a negative position around -9.05% at the end of 2020. It then rose sharply through 2021 and 2022, peaking near 39% at the end of 2022, illustrating strong profitability and efficient use of shareholders' equity in this period. Subsequently, the ROE projected a decline through 2023 and beyond, falling to around 14% by mid-2025. This decrease aligns with the declines observed in net profit margin and asset turnover, indicating that while strong performance was achieved post-2020, a normalization or moderation in returns is anticipated in future periods.

The financial data reveals notable trends across several key performance indicators over multiple quarters.

Tax Burden

The tax burden ratio demonstrates a clear upward trend starting from 0.17 in March 2021, rising steadily to stabilize around 0.66 to 0.68 from 2022 through mid-2025. This suggests an increasing proportion of earnings paid as tax, which then stabilizes at a relatively high level.

Interest Burden

The interest burden ratio increased significantly from 0.13 in March 2021 to approximately 0.96-0.97 during 2022 and 2023, maintaining a stable level close to 0.95 thereafter. This indicates a reduction in interest expenses relative to earnings before interest and taxes, improving from an initially low ratio to a consistently strong ratio near 1.0, implying more earnings are retained after interest expenses.

EBIT Margin

The EBIT margin showed substantial improvement, rising sharply from -12.67% in late 2020 to a peak near 37.5% in late 2022. However, post-peak, there is a discernible declining trend down to about 25.1% by mid-2025. This pattern indicates an initial recovery and growth in operational profitability followed by a gradual contraction of margins over the subsequent years.

Asset Turnover

Asset turnover ratio exhibits a steady increase from 0.3 in early 2021 to a high of 0.84 in early 2023, indicating improved efficiency in generating revenue from assets. Following this peak, the ratio declines progressively to around 0.45-0.47 by mid-2025, suggesting a reduction in asset utilization efficiency over time.

Financial Leverage

Financial leverage remains relatively stable, fluctuating slightly around 1.9 to 2.1 from early 2020 through mid-2025. Minor variations suggest consistent use of debt relative to equity, with no significant increases or decreases signaling material changes in the capital structure during the period.

Return on Equity (ROE)

ROE mirrors the EBIT margin trend, starting with negative returns of -9.05% in late 2020 and rising strongly to a peak close to 38.9% in late 2022. Subsequently, ROE declines to approximately 14% by mid-2025. This underscores a phase of recovery and profitability enhancement, followed by a diminishing return generation for shareholders over the latter periods analyzed.

Overall, the data indicates an initial recovery and strengthening of financial performance between 2020 and 2022, characterized by improved profitability, higher asset efficiency, and reduced interest burden. However, from 2023 onward, several metrics such as EBIT margin, asset turnover, and ROE trend downward, signaling a softening in operational efficiency and profitability, while the tax burden remains relatively high and financial leverage steady.

The data reveals notable trends across net profit margin, asset turnover, and return on assets (ROA) over the specified periods. Each metric exhibits distinct phases of variation that reflect underlying operational and financial changes.

Net Profit Margin (%)

Initially, the net profit margin was negative in the first quarter of 2020, indicating a loss but quickly turned positive by the first quarter of 2021. From that point, it showed a robust upward trend, peaking near 24% in the last quarter of 2022. Subsequently, the margin gradually declined but remained strong, fluctuating around 16-20% through to mid-2025. This trajectory suggests an initial recovery followed by sustained profitability, though with some pressure on margins in the latter periods.

Asset Turnover (ratio)

Asset turnover was relatively low at the beginning of the observed timeframe, around 0.3 in early 2020, and increased steadily to a peak of 0.84 by the first quarter of 2023. Following this peak, turnover ratios gradually decreased to about 0.45 by mid-2025. This pattern indicates improving efficiency in utilizing assets to generate sales up to early 2023, followed by a decline in asset utilization efficiency thereafter.

Return on Assets (ROA) (%)

The return on assets started negatively in early 2020 and improved progressively, becoming positive by the first quarter of 2021. ROA then increased significantly, reaching nearly 20% by late 2022, mirroring the net profit margin's growth. After this apex, ROA decreased gradually, stabilizing between approximately 7% and 11% through mid-2025. This trend reflects an initial recovery and enhanced profitability in asset use, followed by a moderation in returns.

Overall, the data highlights a period of recovery and growth in profitability and asset efficiency through approximately two years ending in late 2022 or early 2023, followed by a phase of relative decline or stabilization in key performance metrics. This could be indicative of market or operational challenges impacting the firm's margins and asset productivity after a strong rebound post-2020 losses.

Tax Burden

The tax burden ratio shows a significant increase starting from 0.17 in March 2021, rising sharply to a range between approximately 0.58 and 0.68 over subsequent quarters. From March 2022 through June 2025, it remains relatively stable with minor fluctuations around the mid-60% range, indicating consistent tax impact on pre-tax income during this period.

Interest Burden

The interest burden ratio improved markedly from 0.13 in March 2021 to 0.79 by June 2021, continuing to rise steadily and stabilizing around 0.95 to 0.97 from December 2021 through June 2025. This indicates a substantial reduction in interest expenses relative to earnings before interest and taxes, reflecting enhanced financial leverage or better debt management over time.

EBIT Margin

The EBIT margin exhibits a strong upward trend beginning in March 2021, turning positive at 4.23% after a negative value in December 2020. It peaked at 37.54% in December 2022, followed by a gradual decline to around 25.1% by June 2025. This pattern suggests a recovery phase with increasing operational profitability, followed by a moderate contraction in margin, possibly due to market or cost pressures in later periods.

Asset Turnover

Asset turnover ratio starts at a relatively low 0.30 in March 2021 and increases steadily to reach a peak of 0.84 in December 2022. After this peak, the ratio declines progressively to about 0.46 by June 2025. This indicates improved efficiency in asset utilization through 2022, followed by a reduction in the rate at which assets generate revenue in subsequent years.

Return on Assets (ROA)

The ROA follows a similar trajectory to the EBIT margin and asset turnover. Reporting a negative -4.31% in December 2020, it rises significantly to 19.91% by December 2022. Thereafter, ROA decreases gradually to approximately 7.49% by June 2025. This reflects growing profitability and effective asset use initially, with profitability tapering off but remaining positive throughout the later periods.

The financial ratios exhibit notable changes over the observed periods, reflecting evolving operational efficiency and profitability.

Tax Burden Ratio

The tax burden ratio shows a consistent pattern starting from March 31, 2021, where it begins at 0.17 and quickly rises to approximately 0.58 by mid-2021. From that point onward, it stabilizes around the mid-0.6 range, fluctuating slightly but maintaining a relatively stable trend up to June 30, 2025. This suggests a relatively stable effective tax rate over the recent periods with minor variability.

Interest Burden Ratio

This ratio starts lower at 0.13 in March 31, 2021, but increases sharply to about 0.79 by June 30, 2021, indicating an improvement in the company's ability to cover interest expenses with operating earnings. After this initial rise, the ratio remains steady and close to 0.95 to 0.97, showing sustained strong interest coverage, with a minimal decline to 0.94 by mid-2025.

EBIT Margin (%)

The EBIT margin shows a significant recovery and growth starting from a negative value of -12.67% in December 31, 2020. It then increases substantially to 4.23% and continues to improve sharply, reaching a peak above 37% by late 2022. Following this peak, a gradual decline is observed through 2023 and into 2024 and 2025, with margins decreasing to approximately 25.1% by mid-2025. Despite this decline, EBIT margins remain at a relatively high level compared to the initial negative readings.

Net Profit Margin (%)

Net profit margin follows a similar trajectory to the EBIT margin, starting from a negative figure of -14.38% in December 31, 2020. It progresses to a marginally positive margin of 0.09% in the following quarter and then grows steadily, reaching nearly 24.34% in late 2022. Subsequently, the margin declines gradually through 2023 to mid-2025, settling at approximately 15.89%. This pattern indicates improved profitability that peaked and then moderated while remaining substantially above earlier negative levels.

Overall, the data indicates a strong recovery in both operating performance and profitability following the negative margins recorded at the end of 2020. Improvements in tax and interest burden ratios suggest enhanced operational and financial management. The subsequent decline in margins after the peak in 2022 points to some softening in profitability but maintains levels that are healthy relative to prior periods.