Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
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- Balance Sheet: Liabilities and Stockholders’ Equity
- Common-Size Income Statement
- Common-Size Balance Sheet: Liabilities and Stockholders’ Equity
- Net Profit Margin since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Book Value (P/BV) since 2005
- Price to Sales (P/S) since 2005
- Aggregate Accruals
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Profitability Ratios (Summary)
ConocoPhillips, 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 demonstrate a period of initial expansion followed by a consistent decline over the five-year period. Significant gains were realized between 2021 and 2022, but subsequent years show a contraction in profitability across all measured ratios.
- Operating Profit Margin
- The operating profit margin increased notably from 29.84% in 2021 to 36.80% in 2022. However, this was followed by a steady decrease, reaching 22.97% in 2025. This suggests a diminishing ability to translate sales into operating profit.
- Net Profit Margin
- Mirroring the trend in operating profit margin, the net profit margin rose from 17.63% to 23.80% between 2021 and 2022. A consistent downward trend then ensued, with the margin falling to 13.55% by 2025. This indicates a reduction in overall profitability after accounting for all expenses, including taxes and interest.
- Return on Equity (ROE)
- Return on equity experienced the most substantial fluctuation. It increased dramatically from 17.79% in 2021 to 38.91% in 2022, before declining to 12.39% in 2025. This suggests a significant initial improvement in generating profits from shareholder investments, followed by a substantial erosion of that efficiency.
- Return on Assets (ROA)
- The return on assets followed a similar pattern to the other ratios. It increased from 8.91% in 2021 to 19.91% in 2022, and then decreased steadily to 6.55% in 2025. This indicates a diminishing ability to generate earnings from the company’s total assets.
Collectively, these ratios suggest a peak in profitability in 2022, followed by a consistent decline across all metrics through 2025. The magnitude of the decline in ROE and ROA is particularly noteworthy, indicating a weakening in the efficiency of both equity and asset utilization in generating profits.
Return on Sales
Return on Investment
Operating Profit Margin
ConocoPhillips, 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 | ||||||
| Chevron Corp. | ||||||
| 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 a strong profitability position, followed by a period of decline.
- Operating Profit Margin Trend
- The operating profit margin began at 29.84% in 2021, increasing substantially to 36.80% in 2022. This represents a period of heightened profitability, potentially driven by increased revenue and efficient cost management. However, the margin subsequently decreased to 30.57% in 2023, and continued this downward trajectory, reaching 26.64% in 2024. The decline persisted into 2025, with the operating profit margin falling to 22.97%.
The observed trend suggests a weakening ability to translate sales into operating profit. While sales and other operating revenues increased overall during the period, the rate of revenue growth did not consistently outpace the changes in operating income, contributing to the margin compression.
- Relationship to Operating Income and Revenue
- Operating income peaked in 2022 at US$28,886 million, coinciding with the highest operating profit margin. The subsequent decrease in operating income, to US$17,162 million in 2023 and further to US$13,542 million in 2025, directly correlates with the declining operating profit margin. Sales and other operating revenues also experienced a peak in 2022 at US$78,494 million, followed by a decrease in 2023, and a moderate increase in 2024 and 2025. The relative changes in operating income and revenue indicate that cost pressures or pricing dynamics may be impacting profitability.
The consistent decline in the operating profit margin from 2022 to 2025 warrants further investigation to determine the underlying causes. Potential factors could include increased operating expenses, changes in product mix, intensified competition, or shifts in commodity prices.
Net Profit Margin
ConocoPhillips, net profit margin calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Sales and other operating revenues | ||||||
| Profitability Ratio | ||||||
| Net profit margin1 | ||||||
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | ||||||
| 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 ÷ 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 strong profitability, followed by a decline in subsequent years.
- Overall Trend
- A general downward trend in net profit margin is apparent. The metric peaked in 2022 at 23.80% and subsequently decreased each year, concluding at 13.55% in 2025. This indicates diminishing profitability relative to revenue over time.
- 2021 to 2022
- From 2021 to 2022, the net profit margin increased substantially, rising from 17.63% to 23.80%. This improvement coincided with a significant increase in sales and other operating revenues, and a more substantial increase in net income. This suggests a period of heightened operational efficiency and/or favorable market conditions.
- 2022 to 2025
- Following the peak in 2022, the net profit margin experienced a consistent decline. It decreased to 19.52% in 2023, 16.89% in 2024, and further to 13.55% in 2025. While sales and other operating revenues remained relatively stable between 2023 and 2025, net income decreased, contributing to the margin compression. This suggests increasing costs or pricing pressures impacting profitability.
- Net Income and Revenue Relationship
- The relationship between net income and sales and other operating revenues appears to be a key driver of the net profit margin fluctuations. The substantial increase in both in 2022 drove the margin increase, while the subsequent decline in net income, despite relatively stable revenues, caused the margin to fall in the following years.
The observed trend warrants further investigation into the underlying factors affecting net income, such as cost of goods sold, operating expenses, and potential changes in pricing strategies.
Return on Equity (ROE)
ConocoPhillips, 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 | ||||||
| Equity | ||||||
| Profitability Ratio | ||||||
| ROE1 | ||||||
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | ||||||
| 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 ÷ Equity
= 100 × ÷ =
2 Click competitor name to see calculations.
The period under review demonstrates significant fluctuations in Return on Equity (ROE). Initial values are notably lower, increasing substantially before declining again. Net income exhibits a similar pattern of initial growth followed by a decrease, while equity generally increased throughout the period, though at a varying rate.
- Return on Equity (ROE)
- ROE increased significantly from 17.79% in 2021 to 38.91% in 2022. This substantial rise suggests a considerable improvement in the company’s efficiency at generating profits from shareholder investments. However, this high point was not sustained. A decline to 22.23% was observed in 2023, followed by further decreases to 14.27% in 2024 and 12.39% in 2025. This downward trend indicates diminishing profitability relative to equity.
- Net Income
- Net income mirrored the ROE trend. It rose dramatically from US$8,079 million in 2021 to US$18,680 million in 2022. Subsequently, net income decreased to US$10,957 million in 2023, US$9,245 million in 2024, and US$7,988 million in 2025. This consistent decline in net income likely contributed to the observed decrease in ROE.
- Equity
- Equity experienced a consistent, though not linear, increase over the period. It rose from US$45,406 million in 2021 to US$48,003 million in 2022, then to US$49,279 million in 2023. A more substantial increase was noted between 2023 and 2024, reaching US$64,796 million, followed by a slight decrease to US$64,487 million in 2025. The continued growth in equity, despite declining net income, suggests that the decrease in ROE is not solely attributable to reduced profitability, but also to the increasing equity base.
The combination of fluctuating net income and increasing equity resulted in a pronounced shift in ROE. While the initial increase in ROE was positive, the subsequent decline warrants further investigation to determine the underlying causes and potential implications for future performance.
Return on Assets (ROA)
ConocoPhillips, ROA calculation, comparison to benchmarks
| Dec 31, 2025 | Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income | ||||||
| Total assets | ||||||
| Profitability Ratio | ||||||
| ROA1 | ||||||
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | ||||||
| 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 ÷ 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 8.91% in 2021 and peaked at 19.91% in 2022, representing a more than doubling of the ratio. Subsequently, the ROA experienced a consistent downward trend, decreasing to 11.42% in 2023, 7.53% in 2024, and further to 6.55% in 2025.
- Net Income Influence
- Net income increased considerably from 2021 to 2022, driving the initial surge in ROA. However, while net income remained substantial in subsequent years, it decreased from its 2022 peak, contributing to the observed decline in ROA.
- Asset Base Influence
- Total assets showed a moderate increase from 2021 to 2023. A significant increase in total assets occurred between 2023 and 2024, and remained relatively stable in 2025. This asset growth, coupled with decreasing net income, likely exacerbated the downward trend in ROA during the later years of the period.
The substantial increase in assets in 2024, without a corresponding increase in net income, appears to be a primary driver of the ROA decline. The ratio’s consistent decrease from 2022 through 2025 suggests a diminishing efficiency in utilizing assets to generate profit.