Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Exxon Mobil Corp. (NYSE:XOM)

Economic Value Added (EVA)

Advanced level

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

Exxon Mobil Corp., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net operating profit after taxes (NOPAT)1 (34,098) 16,404  19,434  14,697  8,806 
Cost of capital2 13.02% 13.87% 15.15% 14.81% 14.88%
Invested capital3 273,920  303,501  292,742  291,163  280,387 
 
Economic profit4 (69,755) (25,688) (24,920) (28,432) (32,928)

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2020 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= -34,09813.02% × 273,920 = -69,755

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Exxon Mobil Corp.’s economic profit decreased from 2018 to 2019 and from 2019 to 2020.

Net Operating Profit after Taxes (NOPAT)

Exxon Mobil Corp., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Net income (loss) attributable to ExxonMobil (22,440) 14,340  20,840  19,710  7,840 
Deferred income tax expense (benefit)1 (8,052) (675) (96) (8,321) (4,223)
Increase (decrease) in reserves for notes and accounts receivable2 69  (211) (91) 591 
Increase (decrease) in LIFO reserve3 (4,300) 1,500  (2,600) 2,700  3,600 
Increase (decrease) in restructuring reserves4 403  —  —  —  — 
Increase (decrease) in equity equivalents5 (11,880) 830  (2,907) (5,712) (32)
Interest expense 1,158  830  766  601  453 
Interest expense, operating lease liability6 150  182  398  262  259 
Adjusted interest expense 1,308  1,012  1,164  863  712 
Tax benefit of interest expense7 (275) (213) (244) (302) (249)
Adjusted interest expense, after taxes8 1,033  800  920  561  463 
Net income (loss) attributable to noncontrolling interest (811) 434  581  138  535 
Net operating profit after taxes (NOPAT) (34,098) 16,404  19,434  14,697  8,806 

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in reserves for notes and accounts receivable.

3 Addition of increase (decrease) in LIFO reserve. See details »

4 Addition of increase (decrease) in restructuring reserves.

5 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to ExxonMobil.

6 2020 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 5,162 × 2.90% = 150

7 2020 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,308 × 21.00% = 275

8 Addition of after taxes interest expense to net income (loss) attributable to ExxonMobil.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Exxon Mobil Corp.’s NOPAT decreased from 2018 to 2019 and from 2019 to 2020.

Cash Operating Taxes

Exxon Mobil Corp., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Income tax expense (benefit) (5,632) 5,282  9,532  (1,174) (406)
Less: Deferred income tax expense (benefit) (8,052) (675) (96) (8,321) (4,223)
Add: Tax savings from interest expense 275  213  244  302  249 
Cash operating taxes 2,695  6,170  9,872  7,449  4,066 

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Exxon Mobil Corp.’s cash operating taxes decreased from 2018 to 2019 and from 2019 to 2020.

Invested Capital

Exxon Mobil Corp., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Notes and loans payable 20,458  20,578  17,258  17,930  13,830 
Long-term debt, excluding due within one year 47,182  26,342  20,538  24,406  28,932 
Operating lease liability1 5,162  5,693  4,219  3,079  2,833 
Total reported debt & leases 72,802  52,613  42,015  45,415  45,595 
Total ExxonMobil share of equity 157,150  191,650  191,794  187,688  167,325 
Net deferred tax (assets) liabilities2 14,006  22,352  24,035  23,575  29,921 
Reserves for notes and accounts receivable3 474  405  400  611  702 
LIFO reserve4 5,400  9,700  8,200  10,800  8,100 
Restructuring reserves5 403  —  —  —  — 
Equity equivalents6 20,283  32,457  32,635  34,986  38,723 
Accumulated other comprehensive (income) loss, net of tax7 16,705  19,493  19,564  16,262  22,239 
Noncontrolling interests 6,980  7,288  6,734  6,812  6,505 
Adjusted total ExxonMobil share of equity 201,118  250,888  250,727  245,748  234,792 
Invested capital 273,920  303,501  292,742  291,163  280,387 

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of LIFO reserve. See details »

5 Addition of restructuring reserves.

6 Addition of equity equivalents to total ExxonMobil share of equity.

7 Removal of accumulated other comprehensive income.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Exxon Mobil Corp.’s invested capital increased from 2018 to 2019 but then decreased significantly from 2019 to 2020.

Cost of Capital

Exxon Mobil Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 240,038  240,038  ÷ 317,730  = 0.76 0.76 × 16.69% = 12.61%
Debt3 72,530  72,530  ÷ 317,730  = 0.23 0.23 × 2.06% × (1 – 21.00%) = 0.37%
Operating lease liability4 5,162  5,162  ÷ 317,730  = 0.02 0.02 × 2.90% × (1 – 21.00%) = 0.04%
Total: 317,730  1.00 13.02%

Based on: 10-K (filing date: 2021-02-24).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 224,348  224,348  ÷ 278,078  = 0.81 0.81 × 16.69% = 13.46%
Debt3 48,037  48,037  ÷ 278,078  = 0.17 0.17 × 2.58% × (1 – 21.00%) = 0.35%
Operating lease liability4 5,693  5,693  ÷ 278,078  = 0.02 0.02 × 3.20% × (1 – 21.00%) = 0.05%
Total: 278,078  1.00 13.87%

Based on: 10-K (filing date: 2020-02-26).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 336,540  336,540  ÷ 378,470  = 0.89 0.89 × 16.69% = 14.84%
Debt3 37,711  37,711  ÷ 378,470  = 0.10 0.10 × 2.89% × (1 – 21.00%) = 0.23%
Operating lease liability4 4,219  4,219  ÷ 378,470  = 0.01 0.01 × 9.44% × (1 – 21.00%) = 0.08%
Total: 378,470  1.00 15.15%

Based on: 10-K (filing date: 2019-02-27).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 320,945  320,945  ÷ 366,981  = 0.87 0.87 × 16.69% = 14.60%
Debt3 42,957  42,957  ÷ 366,981  = 0.12 0.12 × 2.24% × (1 – 35.00%) = 0.17%
Operating lease liability4 3,079  3,079  ÷ 366,981  = 0.01 0.01 × 8.50% × (1 – 35.00%) = 0.05%
Total: 366,981  1.00 14.81%

Based on: 10-K (filing date: 2018-02-28).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 335,577  335,577  ÷ 381,465  = 0.88 0.88 × 16.69% = 14.68%
Debt3 43,055  43,055  ÷ 381,465  = 0.11 0.11 × 2.16% × (1 – 35.00%) = 0.16%
Operating lease liability4 2,833  2,833  ÷ 381,465  = 0.01 0.01 × 9.14% × (1 – 35.00%) = 0.04%
Total: 381,465  1.00 14.88%

Based on: 10-K (filing date: 2017-02-22).

1 US$ in millions

2 Equity. See details »

3 Debt. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Exxon Mobil Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Economic profit1 (69,755) (25,688) (24,920) (28,432) (32,928)
Invested capital2 273,920  303,501  292,742  291,163  280,387 
Performance Ratio
Economic spread ratio3 -25.47% -8.46% -8.51% -9.77% -11.74%
Benchmarks
Economic Spread Ratio, Competitors4
Chevron Corp. -18.38% -13.73% -5.61% -10.11% -15.63%

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

1 Economic profit. See details »

2 Invested capital. See details »

3 2020 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -69,755 ÷ 273,920 = -25.47%

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Exxon Mobil Corp.’s economic spread ratio improved from 2018 to 2019 but then deteriorated significantly from 2019 to 2020.

Economic Profit Margin

Exxon Mobil Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016
Selected Financial Data (US$ in millions)
Economic profit1 (69,755) (25,688) (24,920) (28,432) (32,928)
Sales and other operating revenue 178,574  255,583  279,332  237,162  218,608 
Performance Ratio
Economic profit margin2 -39.06% -10.05% -8.92% -11.99% -15.06%
Benchmarks
Economic Profit Margin, Competitors3
Chevron Corp. -38.39% -19.22% -7.52% -15.62% -30.45%

Based on: 10-K (filing date: 2021-02-24), 10-K (filing date: 2020-02-26), 10-K (filing date: 2019-02-27), 10-K (filing date: 2018-02-28), 10-K (filing date: 2017-02-22).

1 Economic profit. See details »

2 2020 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales and other operating revenue
= 100 × -69,755 ÷ 178,574 = -39.06%

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company’s profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Exxon Mobil Corp.’s economic profit margin deteriorated from 2018 to 2019 and from 2019 to 2020.