Hess Corp. (NYSE:HES)

The analysis of the financial ratios over the period from 2018 to 2022 reveals significant shifts in operational efficiency, leverage, profitability, and overall financial health.

Total Asset Turnover

The reported total asset turnover ratio remained stable at 0.3 during 2018 and 2019 before declining to 0.25 in 2020. It then improved markedly to 0.36 in 2021 and further to 0.52 in 2022. The adjusted total asset turnover follows a similar pattern, indicating an overall enhancement in asset utilization efficiency from 2020 onwards.

Debt to Equity

The reported debt to equity ratio experienced a substantial increase from 0.69 in 2018 to a peak of 1.59 in 2020, indicative of elevated leverage and potentially higher financial risk. Subsequently, it decreased to 1.38 in 2021 and further to 1.08 in 2022, suggesting a partial reduction in leverage. The adjusted debt to equity mirrors this trend but shows slightly lower ratios throughout.

Debt to Capital

This ratio increased steadily from 0.41 in 2018 to 0.61 in 2020, reflecting a growing reliance on debt financing relative to the total capital structure. Thereafter, it declined to 0.58 in 2021 and 0.52 in 2022, indicating a modest deleveraging effort. The adjusted figures are consistently lower but follow the same overall pattern.

Financial Leverage

Financial leverage, reported as a ratio, rose significantly from 2.23 in 2018 to 3.51 in 2020, highlighting increased use of debt relative to equity. This was followed by a decline to 3.26 in 2021 and 2.76 in 2022, suggesting a reduction in leverage pressure. Adjusted financial leverage remained below the reported figures but showed parallel dynamics.

Net Profit Margin

The reported net profit margin was negative in 2018 and 2019, worsening dramatically to -66.27% in 2020, before recovering to positive values of 7.48% in 2021 and 18.51% in 2022. The adjusted net profit margin indicates a similar trend with negative margins through 2019 and 2020, followed by a stronger recovery to 18.17% in 2021 and 26.73% in 2022, pointing to improved profitability.

Return on Equity (ROE)

A negative ROE was observed from 2018 through 2020, reaching a low of -57.64% reported and -44.56% adjusted in 2020. This was followed by a turnaround to positive returns of 8.87% and 26.68% (reported) and even higher adjusted figures in 2021 and 2022 respectively, indicating a substantial enhancement in shareholder value creation.

Return on Assets (ROA)

The reported ROA started negative at -1.32% in 2018 and dropped sharply to -16.43% in 2020. It then improved to 2.72% in 2021 and to 9.66% in 2022. The adjusted ROA mirrors these changes but shows a stronger recovery with positive returns of 6.64% in 2021 and 14.04% in 2022, implying improved asset profitability.

In summary, the data indicate that the company experienced increasing financial leverage and declining profitability through 2020, likely reflecting operational challenges or adverse market conditions during that period. Starting in 2021, there is evidence of significant recovery across key profitability metrics and asset utilization efficiency, coupled with a gradual reduction in leverage levels. Overall, these trends suggest an improving financial performance and risk profile in the latest two years.

The financial data reflects several important trends in the company's operational efficiency and asset utilization over the five-year period.

Sales and Other Operating Revenues

Sales and other operating revenues show a fluctuating yet overall increasing trend. After a slight increase from 2018 to 2019, revenues experienced a pronounced decline in 2020, attributable potentially to external market conditions or operational challenges. A robust recovery occurred in 2021, with a significant increase continuing into 2022, reaching the highest value in the period analyzed.

Total Assets

Total assets decreased from 2019 to 2020, followed by a recovery trend in the subsequent years. Despite this, the total asset figure at the end of 2022 slightly exceeded the value at the end of 2018, indicating a restoration and slight growth in asset base after the dip in 2020.

Reported Total Asset Turnover

The reported total asset turnover ratio mirrors the changes in the revenue and asset base. The ratio held steady at 0.3 in 2018 and 2019, then declined in 2020, coinciding with the dip in revenues and assets. A marked improvement is observed in 2021, with the ratio climbing to 0.36, and an even more substantial increase to 0.52 in 2022, suggesting enhanced efficiency in utilizing total assets to generate sales.

Adjusted Total Assets

Adjusted total assets trends closely follow the pattern of total assets, with a decrease in 2020 and a rebound over the following two years. The adjustments do not appear to significantly alter the overall asset base pattern but provide a slightly modified scale for analysis purposes.

Adjusted Total Asset Turnover

Similar to the reported total asset turnover, the adjusted total asset turnover ratio decreased in 2020 and showed marked improvement thereafter. The ratio improved from 0.25 in 2020 to 0.37 in 2021, and further increased to 0.53 in 2022. This reinforces the conclusion regarding improved asset utilization efficiency, taking into account asset adjustments.

Overall, the data indicates that despite a setback in 2020, the company has enhanced its ability to convert its asset base into sales, achieving the highest turnover ratios in 2022. The growth in sales and recovery of the asset base post-2020 further support positive operational trends and possibly reflect effective management responses to prior challenges.

The financial data reveals several notable trends in the company's capital structure and financial leverage over the five-year period analyzed.

Total Debt

Total debt increased steadily from 6,672 million USD in 2018 to a peak of 8,677 million USD in 2021, followed by a slight decrease to 8,481 million USD in 2022. This indicates a consistent use of debt financing, with a minor reduction in the most recent year.

Total Stockholders’ Equity

Stockholders’ equity experienced a decline from 9,629 million USD in 2018 to 5,366 million USD in 2020, marking a significant contraction. However, equity rebounded in the subsequent years, reaching 7,855 million USD in 2022, suggesting partial recovery but still below the initial 2018 level.

Reported Debt to Equity Ratio

This ratio rose sharply from 0.69 in 2018 to a high of 1.59 in 2020, reflecting increased financial leverage primarily driven by the decrease in equity and growing debt. The ratio then improved gradually to 1.08 by 2022 due to equity recovery and stabilizing debt levels.

Adjusted Total Debt

Adjusted total debt followed a similar pattern to reported total debt, increasing from 7,434 million USD in 2018 to 9,141 million USD in 2021, with a marginal rise to 9,150 million USD in 2022. This confirms the trend of increasing debt obligations when considering adjustments.

Adjusted Total Equity

Adjusted total equity decreased significantly from 11,288 million USD in 2018 to 6,618 million USD in 2020, mirroring the trend in reported equity but at higher absolute values. From 2020 onward, it showed a positive trend, increasing to 8,781 million USD in 2022, indicating strengthening shareholder capital.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio increased from 0.66 in 2018 to 1.37 in 2020, again reflecting the combined effect of rising debt and falling equity. Subsequently, this ratio declined to 1.04 in 2022, indicating an improvement in the company’s leveraged position over the last two years.

In summary, the company experienced a period of increased financial leverage and reduced equity from 2018 through 2020, leading to elevated debt-to-equity ratios. The subsequent period from 2021 to 2022 shows signs of deleveraging and equity recovery, which improved the capital structure and reduced risk measures associated with high leverage.

The financial data reveals several key trends in the company's debt and capital structure over the five-year period ending in 2022.

Total Debt

The total debt showed an overall increasing trend from 2018 to 2021, rising from $6,672 million to $8,677 million. In 2022, total debt slightly decreased to $8,481 million, indicating a minor reduction after a period of growth.

Total Capital

Total capital initially decreased from $16,301 million in 2018 to $13,900 million in 2020, reflecting a contraction in capital resources. However, it recovered in the subsequent years, reaching $16,336 million by the end of 2022, which is slightly above the 2018 level.

Reported Debt to Capital Ratio

This ratio increased from 0.41 in 2018 to a peak of 0.61 in 2020, indicating higher leverage during this period, which coincides with the reduction in total capital. After 2020, the ratio declined to 0.52 in 2022, suggesting the company reduced its debt relative to capital or increased its capital base.

Adjusted Total Debt

Adjusted total debt followed a similar pattern as reported total debt but at slightly higher absolute values, increasing from $7,434 million in 2018 to a peak of $9,150 million in 2022. The steady increase indicates a generally higher level of debt when adjustments are considered.

Adjusted Total Capital

Adjusted total capital decreased from $18,722 million in 2018 to $15,693 million in 2020, consistent with the trend observed in reported total capital, then gradually increased to $17,931 million in 2022. This partial recovery aligns with the trend in the reported figures.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio rose from 0.40 in 2018 to 0.58 in 2020, reflecting higher relative leverage, followed by a decline to 0.51 in 2022. This suggests improved balance sheet strength or deleveraging after 2020, similar to the reported ratio pattern.

In summary, the data indicates a period of increasing leverage from 2018 through 2020, peaking in 2020 with the highest debt to capital ratios and the lowest capital levels. Following 2020, there is evidence of deleveraging or capital restoration as the company’s debt ratios declined and capital levels recovered somewhat. The adjustments in debt and capital figures highlight that the reported leverage metrics may understate the total indebtedness, but the overall trends remain consistent across both reported and adjusted data.

The financial data reveals several noteworthy trends over the five-year period ending in 2022. Total assets experienced a decline from 2018 to 2020, dropping from $21,433 million to $18,821 million. This was followed by a recovery phase through 2021 and 2022, where total assets increased again to $21,695 million, nearly reaching the initial 2018 level.

Total stockholders’ equity showed a more pronounced decrease, falling substantially from $9,629 million in 2018 to $5,366 million in 2020. A gradual improvement occurred in the subsequent years, with equity rising to $7,855 million by the end of 2022, though it remained below the 2018 figure.

Financial leverage, as measured by the reported ratio, indicates an increasing trend in the degree of leverage used by the company from 2018 to 2020, peaking significantly at 3.51. Thereafter, leverage began to moderate, declining to 2.76 by 2022. This pattern suggests an initial phase of increased reliance on debt or liabilities relative to equity, followed by a deleveraging trend or equity growth relative to liabilities.

The adjusted financial metrics tell a complementary story. Adjusted total assets mirror the trend of the reported assets, decreasing up to 2020 and recovering afterwards. Adjusted total equity, like the reported equity, sharply declined from 2018 to 2020, then partially rebounded through 2022. Adjusted financial leverage increased steadily until 2020, reaching 2.83, which is lower than the reported peak, and subsequently decreased to 2.46 by 2022, indicating a reduction in risk exposure through the later years.

Overall, the data suggests the company underwent a period of contraction in asset base and equity from 2018 through 2020, coinciding with a peak in leverage and financial risk. This was followed by a recovery period from 2021 onwards, characterized by asset growth and strengthening equity, which contributed to a reduction in financial leverage and associated risks. The adjusted figures confirm these observations, indicating consistent movements after accounting for potential adjustments.

The financial data reveals significant fluctuations in profitability and revenue over the five-year period. The net income attributable to the company exhibits a pronounced volatility, with losses recorded from 2018 through 2020, including a sharp decline in 2020, followed by a recovery yielding positive net income in 2021 and 2022. Specifically, the net loss peaked at -3093 million USD in 2020, transitioning to profits of 559 million USD in 2021 and further increasing to 2096 million USD in 2022.

Sales and other operating revenues demonstrate a variable trend. After a moderate increase from 6323 million USD in 2018 to 6495 million USD in 2019, sales dropped noticeably to 4667 million USD in 2020. This was succeeded by a rebound to 7473 million USD in 2021, culminating in a substantial increase to 11324 million USD in 2022, indicating strong top-line growth in the latest period.

The reported net profit margin mirrors the income trends, with negative margins from 2018 to 2020 and a sharp contraction to -66.27% in 2020. Margins improved significantly in the subsequent years, reaching positive levels at 7.48% in 2021 and expanding further to 18.51% in 2022. This reflects improving operational efficiency and profitability relative to revenue.

Adjusted net income, which likely accounts for non-recurring items, follows a similar pattern to reported net income, showing a loss in 2019 and 2020, with a sharp loss of -2949 million USD in 2020. A recovery is evident in 2021 and 2022, where adjusted net income rises to 1358 million USD and 3027 million USD respectively. Adjusted net profit margins also improve from negative in 2019 and 2020 (-9.76% and -63.19%) to positive levels of 18.17% in 2021 and 26.73% in 2022.

Overall, the data indicates a period of financial stress peaking in 2020, likely due to extraordinary factors impacting performance during that year, followed by a robust recovery in profitability and revenue growth through 2021 and 2022. The company's operational performance, as reflected in profit margins, has strengthened significantly, suggesting improved cost management or favorable market conditions in the recent years.

The financial data reveals significant fluctuations in profitability and equity metrics over the five-year period under review. Net income showed a marked decline between 2018 and 2020, reaching a low point in 2020 with a substantial loss of $3,093 million. However, the company experienced a strong recovery in 2021 and 2022, with net income rising to positive figures of $559 million and $2,096 million, respectively. This trend indicates a turnaround from heavy losses to robust profitability.

Shareholders' equity followed a similar declining trend between 2018 and 2020, decreasing from $9,629 million to $5,366 million. Subsequently, equity levels stabilized and showed gradual growth in 2021 and 2022, reaching $7,855 million by the end of 2022. This suggests some restoration of the company's financial base after a period of erosion.

Return on equity (ROE) mirrored the fluctuations in net income and equity. The reported ROE was negative from 2018 through 2020, hitting a pronounced low of -57.64% in 2020. In the years that followed, ROE improved substantially to a positive 8.87% in 2021 and further to 26.68% in 2022, reflecting the improved profitability relative to equity.

Adjusted net income, which likely excludes certain items for a more normalized view, also showed severe losses in 2019 and 2020 (-$634 million and -$2,949 million, respectively) but turned positive and increased significantly in 2021 and 2022, reaching $1,358 million and $3,027 million. This adjusted measure emphasizes the company’s recovery and strong operational performance in the latter period.

Adjusted total equity followed a pattern similar to the total equity, decreasing from $11,288 million in 2018 to $6,618 million in 2020, then increasing to $8,781 million by 2022. The adjusted equity figures provide a slightly higher base than unadjusted equity, indicating accounting adjustments affecting the equity base.

The adjusted ROE, representing returns based on adjusted net income and equity, was negative and deepened through 2019 and 2020, reaching -44.56% in 2020. It sharply reversed in 2021 and 2022, achieving strong positive returns of 18.51% and 34.47%, respectively. This highlights a meaningful recovery in the company’s core earnings power and efficiency in generating returns on equity after the difficult preceding years.

In summary, the company faced significant financial challenges leading up to and including 2020, evidenced by large losses and reduced equity. Since 2021, there has been a notable turnaround, with improving income, rising equity balances, and strong returns on equity, both reported and adjusted. The data suggests an operational and financial recovery with increasing profitability and strengthening shareholder value in the most recent years reported.

Net Income Trend

Declined sharply through 2020 and rebounded strongly in 2021 and 2022.

Stockholders’ Equity

Decreased significantly by 2020, followed by gradual restoration through 2022.

Reported ROE

Negative and worsening up to 2020, then improved to strong positive returns post-2020.

Adjusted Net Income

Similar downward trend to reported net income, with recovery and substantial improvement in later years.

Adjusted Equity

Mirrored the pattern of total equity but generally remained at higher levels due to adjustments.

Adjusted ROE

Presented strong losses through 2020, reversing to high positive performance in 2021 and 2022.

The financial data indicates significant volatility in net income and related profitability measures over the five-year period ending in 2022. The net income attributable to the company shows substantial losses from 2018 through 2020, with the most severe loss recorded in 2020 at -3,093 million US dollars. This period is followed by a reversal to positive net income in 2021 and 2022, rising to 559 million and then significantly higher at 2,096 million US dollars, respectively.

Total assets exhibit a moderate fluctuation but generally maintain a stable range between approximately 18,800 million and 21,800 million US dollars. Assets dipped notably in 2020, the same year as the largest net loss, before recovering in the subsequent years.

The reported Return on Assets (ROA) correlates with the net income trend. It is negative from 2018 to 2020, reaching a low of -16.43% in 2020, indicating poor asset profitability during those years. ROA turns positive in 2021 at 2.72% and improves further to 9.66% in 2022, reflecting a significant enhancement in operational efficiency or profitability relative to asset base.

When considering adjusted figures, which likely remove certain non-recurring or extraordinary items, the adjusted net income also reflects a similar pattern with losses from 2019 to 2020 and marked improvements in 2021 and 2022. The adjusted net income losses in 2019 and 2020 are substantial, at -634 million and -2,949 million US dollars respectively, followed by strong gains of 1,358 million in 2021 and 3,027 million in 2022.

Adjusted total assets closely track the trend in total assets, with a dip in 2020 and recovery in later years. The adjusted ROA similarly follows the pattern of net income, showing negative values in 2019 and 2020 (-2.92% and -15.72%), then increasing sharply to 6.64% in 2021 and 14.04% in 2022.

Overall, the data shows a period of financial distress culminating in 2020, followed by a strong recovery phase beginning in 2021. The improvement in net income and ROA metrics suggests effective management responses to previous negative trends, with asset utilization also improving as seen in the rising ROA figures. The consistency between reported and adjusted metrics supports the reliability of these trends.

Net Income Trend

Gradual worsening losses from 2018 to 2020, with steep loss in 2020, followed by significant positive turnaround in 2021 and 2022.

Total Assets

Relatively stable with a dip in 2020, recovering thereafter.

Return on Assets (ROA)

Negative to 2020, drastic dip in 2020, improving and turning positive in 2021 and 2022.

Adjusted Income and ROA

Mirror reported figures but emphasize both the depth of losses and strength of recovery more pronouncedly.

Overall Insight

Period of financial difficulty ending in 2020, followed by strong recovery, suggesting enhanced profitability and better asset utilization in recent years.