Marathon Oil Corp. (NYSE:MRO)

The analysis of the annual financial data reveals changes in the company's liquidity position as reflected by current assets and adjusted current assets over the five-year period.

Current Assets

The current assets initially increased from 2,566 million USD at the end of 2017 to a peak of 2,921 million USD at the end of 2018. Following this peak, current assets experienced a notable decline, dropping to 2,135 million USD by the end of 2019 and further decreasing to 1,612 million USD by the end of 2020. In 2021, there was a moderate recovery to 1,821 million USD. Overall, the trend showcases a decrease in liquidity after 2018, with a partial rebound in the final year presented.

Adjusted Current Assets

The adjusted current assets mirror the movement of current assets closely, starting at 2,578 million USD in 2017 and rising to 2,932 million USD in 2018. A similar declining pattern followed, with adjusted current assets falling to 2,146 million USD in 2019, then to 1,634 million USD in 2020. A slight improvement was observed in 2021, with adjusted current assets increasing to 1,836 million USD. This parallel trend suggests that adjustments applied to current assets maintain consistency with the overall liquidity trend.

In summary, both current and adjusted current assets exhibited growth initially but declined substantially after 2018, reaching their lowest levels in 2020. The modest increase in 2021 indicates some degree of liquidity recovery, though not to prior peak levels. This pattern may reflect changes in working capital management, operational conditions, or external economic factors impacting asset composition and availability during the period analyzed.

The analysis of the annual financial data reveals a consistent downward trend in both total assets and adjusted total assets over the five-year period ending December 31, 2021.

Total Assets

Total assets decreased steadily from $22,012 million in 2017 to $16,994 million in 2021. This decline represents a reduction of approximately 23% over the five years, indicating a systematic contraction in the company's asset base during this period.

Adjusted Total Assets

Adjusted total assets followed a similar decreasing pattern, falling from $21,641 million in 2017 to $17,009 million in 2021. The adjusted figures consistently remained slightly below the reported total assets but mirrored the overall downward trajectory.

Such declining asset values may suggest asset divestitures, depreciation, impairments, or reduced capital investment. The consistent decrease in both total assets and adjusted total assets highlights a potentially strategic shift or response to external market conditions impacting the company's asset composition and valuation over these years.

The financial data reveals a consistent downward trend in the company's liabilities over the five-year period. Both total liabilities and adjusted total liabilities show a steady decrease from 2017 through 2021.

Total Liabilities

Starting at approximately $10.3 billion in 2017, total liabilities declined each subsequent year, reaching about $6.3 billion by the end of 2021. This represents a reduction of nearly 39% over the five years, indicating a clear strategic effort or successful execution in liability management or debt reduction.

Adjusted Total Liabilities

Adjusted total liabilities followed a similar pattern, decreasing from approximately $9.6 billion in 2017 to around $6.2 billion in 2021. The adjustment appears to bring values slightly below total liabilities consistently, maintaining the declining trajectory. The reduction in adjusted liabilities also supports the observation of improved financial leverage or risk profile over the period.

Overall, the data suggests a deliberate and effective focus on decreasing liabilities, which could improve the company's financial stability and reduce financial risk over the years analyzed. This consistent decline might reflect payment of debt, restructuring, or other financial actions leading to greater balance sheet strength.

Stockholders’ Equity

Stockholders’ equity exhibited a generally stable pattern from 2017 through 2019, with figures increasing slightly from 11,708 million US dollars in 2017 to 12,153 million US dollars in 2019. However, a decline occurred in 2020, when the equity dropped to 10,561 million US dollars, before experiencing a marginal recovery in 2021 to 10,686 million US dollars. This reflects a modest decrease after a period of relative stability.

Adjusted Stockholders’ Equity

The adjusted stockholders’ equity followed a somewhat similar trajectory, with an initial decrease from 12,064 million US dollars in 2017 to 11,945 million US dollars in 2018. Afterwards, it rose to a peak of 12,350 million US dollars in 2019, followed by a more significant decline to 10,746 million US dollars in 2020. In 2021, this measure showed a slight increase to 10,837 million US dollars. The adjusted figures consistently exceed the reported stockholders’ equity, indicating the presence of adjustments that positively impact the equity calculation.

Trends and Insights

Both stockholders’ equity and adjusted stockholders’ equity displayed resilience until 2019, after which both measures experienced noticeable declines in 2020, likely indicative of adverse conditions impacting the company. The slight improvement in 2021 suggests a stabilization phase. The adjustments applied to calculate the adjusted stockholders’ equity add a premium to the base equity figures but follow the same general trend. Overall, the data reflects fluctuations that might be connected to external economic factors or internal operational challenges during the observed period.

Total reported debt

The total reported debt remained relatively stable from 2017 to 2019, with values around 5,494 to 5,501 million US dollars. A slight decline occurred in 2020, decreasing to 5,404 million, followed by a more significant reduction in 2021 to 4,044 million. This indicates a deliberate effort to reduce debt levels in the latter period.

Stockholders’ equity

Stockholders’ equity showed modest growth from 11,708 million in 2017 to a peak of 12,153 million in 2019. However, it then declined sharply in 2020 to 10,561 million and experienced a minor recovery in 2021 to 10,686 million. This pattern suggests a decrease in retained earnings or other equity components during 2020, possibly linked to external economic conditions or company performance.

Total reported capital

Total reported capital, the sum of debt and equity, rose slightly from 17,202 million in 2017 to 17,654 million in 2019. It then declined notably in 2020 to 15,965 million and further to 14,730 million in 2021. The decline aligns with the reduction in both debt and equity, highlighting an overall contraction in the company's capital base over these years.

Adjusted total debt

The adjusted total debt follows a similar trend to the reported debt, starting at 5,600 million in 2017 and slightly increasing to 5,709 million by 2019. It then decreased to 5,541 million in 2020 and sharply dropped to 4,107 million in 2021. This reinforces the observation of a strategic reduction in leverage as of 2020 and 2021.

Adjusted stockholders’ equity

Adjusted stockholders’ equity showed a marginal decrease from 12,064 million in 2017 to 11,945 million in 2018, followed by a rise to 12,350 million in 2019. It then fell considerably to 10,746 million in 2020 and had a slight increase to 10,837 million in 2021. This trend corresponds closely with the reported equity figures, suggesting consistent adjustments in equity valuation.

Adjusted total capital

The adjusted total capital slightly decreased from 17,664 million in 2017 to 17,628 million in 2018, then increased to 18,059 million in 2019. Subsequently, it sharply declined to 16,287 million in 2020 and further to 14,944 million in 2021. This trend matches the general pattern of capital contraction following 2019.

Summary of trends

The financial data indicates a relatively stable capital structure from 2017 through 2019, characterized by minor fluctuations in debt and equity components. Beginning in 2020, there is clear evidence of debt reduction and a contraction in equity, leading to an overall decrease in total capital. The significant declines in both debt and equity during 2020 and 2021 suggest a response to external pressures or strategic adjustments impacting the financial base. Adjusted figures mirror reported values, confirming consistency in these downward trends for the latter years.

Net income (loss)

The company experienced significant volatility in net income over the analyzed periods. In 2017, the net loss was substantial at -5,723 million US dollars. There was a marked recovery in 2018, resulting in a positive net income of 1,096 million US dollars. This was followed by a decline in 2019 to 480 million US dollars, indicating a reduction in profitability but still maintaining a positive result. In 2020, net income deteriorated again, resulting in a loss of 1,451 million US dollars, likely influenced by broader market or operational challenges. The situation improved in 2021, with net income returning to a positive 946 million US dollars, suggesting some recovery or stabilization.

Adjusted net income (loss)

The trend in adjusted net income mirrors that of the reported net income, with some variation in magnitude. In 2017, adjusted net income showed a significant loss of 864 million US dollars, which was considerably less negative compared to the reported net loss for the same year. The figure turned positive in 2018 at 1,272 million US dollars, reflecting improved core earnings. In 2019, adjusted net income decreased to 488 million US dollars, consistent with overall income trends. The adjusted net income suffered a loss of 1,494 million US dollars in 2020, slightly worse than the reported net loss, implying notable adjustments or non-recurring items affecting that year. In 2021, adjusted net income rebounded to 921 million US dollars, closely correlated with the net income figure, indicating recovery in underlying operations.