Marathon Oil Corp. (NYSE:MRO)

Net Fixed Asset Turnover

The net fixed asset turnover ratio experienced fluctuations over the examined period. It increased from 0.25 in 2017 to 0.35 in 2018, indicating improved efficiency in utilizing fixed assets to generate revenue. However, the ratio declined to 0.3 in 2019 and further to 0.2 in 2020, reflecting a period of reduced efficiency. In 2021, there was a notable recovery to 0.39, reaching the highest level in the five-year span. The version including operating lease rights-of-use assets follows a very similar pattern, suggesting consistent treatment of leased assets in operational effectiveness assessment.

Total Asset Turnover

Total asset turnover demonstrates a trend similar to net fixed asset turnover, with a general pattern of rise and fall throughout the period. It rose from 0.2 in 2017 to 0.28 in 2018, followed by a decrease to 0.25 in 2019 and a sharper fall to 0.17 in 2020. The ratio then experienced a significant increase to 0.33 in 2021, suggesting an improved ability to generate sales from total assets after a period of diminished utilization efficiency.

Equity Turnover

Equity turnover shows a comparable cyclical trend, starting at 0.37 in 2017 and climbing to 0.49 in 2018. The ratio then declined to 0.42 in 2019 and further to 0.29 in 2020, indicating decreased effectiveness in using shareholders’ equity to drive sales. However, 2021 revealed a substantial improvement to 0.52, the highest ratio in the analyzed timeframe, indicating more efficient use of equity in revenue generation.

Overall Insights

Across all turnover ratios—net fixed asset, total asset, and equity turnover—a consistent pattern emerges with peak efficiency in 2018, a decline through 2019 and 2020, and a strong recovery in 2021. The decline period may reflect operational or market challenges impacting asset and equity utilization. The sharp recovery in 2021 suggests operational improvements, enhanced asset management, or favorable market conditions that increased the efficiency of both fixed and total asset use, as well as equity, in generating revenue.

Revenues Trend

Revenues exhibit notable fluctuations over the five-year period. Starting at 4,373 million USD in 2017, there is a significant increase to 5,902 million USD in 2018, marking the highest revenue within the period. However, revenues decline to 5,063 million USD in 2019 and undergo a pronounced drop in 2020 to 3,097 million USD, likely reflecting external economic or industry-specific challenges. A strong recovery is observed in 2021 with revenues rising back to 5,601 million USD, approaching levels seen in 2018.

Property, Plant, and Equipment (PP&E) Net Book Value

The net carrying amount of property, plant, and equipment demonstrates a consistent downward trend. Beginning at 17,665 million USD in 2017, the value slightly decreases to 16,804 million USD in 2018. A marginal recovery appears in 2019 to 17,000 million USD but the decline resumes thereafter, dropping to 15,638 million USD in 2020 and further to 14,527 million USD in 2021. This pattern may indicate ongoing asset depreciation, disposals, or limited reinvestment in fixed assets.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, reflecting the efficiency of the company in using its fixed assets to generate revenues, reveals variability throughout the period. It increases significantly from 0.25 in 2017 to 0.35 in 2018, showing improved asset utilization. In 2019, the ratio decreases to 0.30, further drops to 0.20 in 2020, likely influenced by the substantial revenue decline that year combined with relatively stable asset values. In 2021, the ratio recovers robustly to 0.39, the highest in the dataset, indicating more effective use of fixed assets aligned with revenue recovery.

Overall Insights

The analysis reveals a business affected by notable volatility in revenues, with a sharp contraction during 2020 followed by a recovery in 2021. Fixed assets decrease steadily over the period, which could reflect conservative capital expenditure or asset disposals amid uncertain market conditions. The fluctuations in the net fixed asset turnover ratio correspond closely with revenue changes, indicating that asset utilization efficiency is sensitive to operational performance variations. The rebound in 2021 suggests a return to more productive asset use concurrent with higher sales volume.

Revenue Trends

Revenues exhibited fluctuations over the five-year period. After a significant increase from 4,373 million USD in 2017 to 5,902 million USD in 2018, revenues decreased to 5,063 million USD in 2019 and further declined sharply to 3,097 million USD in 2020. The following year, revenues experienced a notable recovery, rising to 5,601 million USD in 2021. This pattern suggests volatility influenced potentially by external market factors.

Property, Plant, and Equipment (PP&E) Trends

The net carrying amount of property, plant, and equipment showed a consistent downward trend. Starting at 17,665 million USD in 2017, PP&E decreased steadily each year to reach 14,586 million USD in 2021. This decline may indicate ongoing depreciation, asset disposals, or lack of significant capital expenditure during this period.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio, which measures the efficiency in generating revenues from net fixed assets, showed variability. It improved from 0.25 in 2017 to 0.35 in 2018, declined to 0.29 in 2019, and dropped further to 0.20 in 2020. However, the ratio rebounded strongly to 0.38 in 2021. The sharp dip in 2020 corresponds with the revenue decline and suggests underutilization of fixed assets, while the rebound in 2021 indicates improved asset utilization correlating with the revenue recovery.

Overall Observations

The data reveal a period marked by revenue volatility, a steady reduction of net PP&E, and fluctuating asset turnover efficiency. The year 2020 stands out for significant operational challenges, reflected in both lower revenues and asset utilization. The recovery in 2021 points towards a renewed operational momentum, with improved use of assets to generate revenues despite a continued decline in net PP&E.

Revenues

The revenues demonstrated a fluctuating trend over the five-year period. Starting at 4,373 million US dollars in 2017, revenues increased significantly by 34.9% to 5,902 million in 2018. However, the following year saw a decrease to 5,063 million, a decline of 14.2%. A notable drop occurred in 2020, with revenues falling sharply to 3,097 million, representing a 38.9% decrease from the previous year. In 2021, revenues recovered substantially to 5,601 million, illustrating a rebound of approximately 80.9% from 2020, nearly reaching the 2018 level.

Total assets

Total assets exhibited a consistent downward trend throughout the period. Beginning at 22,012 million US dollars in 2017, total assets decreased each year, reaching 16,994 million by the end of 2021. This represents a cumulative reduction of approximately 22.8% over the five years, indicating a possible divestiture, asset disposal, or depreciation outpacing asset acquisition.

Total asset turnover

The total asset turnover ratio showed variability across the years. The ratio increased from 0.20 in 2017 to 0.28 in 2018, reflecting improved efficiency in asset utilization. It slightly declined to 0.25 in 2019, followed by a significant drop to 0.17 in 2020, coinciding with the major reduction in revenues. In 2021, asset turnover recovered markedly to 0.33, the highest point in the five-year span, suggesting better revenue generation relative to assets despite the continued decline in total assets.

Insights

The financial data reveals a company experiencing volatility in revenue generation while steadily reducing its asset base. The sharp revenue decline in 2020 likely impacted operational efficiency but was followed by a strong recovery in 2021. The improved asset turnover ratio in 2021 indicates more effective utilization of the remaining assets to generate revenues. The persistent asset reduction may reflect strategic restructuring or asset optimization efforts. Overall, the trends suggest a period of adjustment with signs of operational improvement toward the end of the observed timeframe.

The financial data over the five-year period reveals noticeable fluctuations in the company's revenues, stockholders' equity, and equity turnover ratio.

Revenues

Revenues demonstrated variability with an overall fluctuating trend. Beginning at 4,373 million US dollars in 2017, revenues increased substantially to 5,902 million in 2018. This was followed by a decline to 5,063 million in 2019 and a more pronounced drop down to 3,097 million in 2020, likely reflecting challenging operational or market conditions. Revenues rebounded again in 2021, reaching 5,601 million, approaching the levels seen in 2018. This pattern indicates sensitivity to external or internal factors affecting sales or production volumes.

Stockholders’ Equity

Stockholders’ equity remained relatively stable throughout the years with minor fluctuations. Starting at 11,708 million US dollars in 2017, equity increased slightly to 12,128 million in 2018 and remained nearly flat at 12,153 million in 2019. Equity then decreased to 10,561 million in 2020, possibly linked to losses or capital withdrawals, before a modest recovery to 10,686 million in 2021. The overall stability in equity suggests maintained shareholder value despite earnings volatility.

Equity Turnover Ratio

The equity turnover ratio, which measures revenue generated per unit of equity, showed considerable variation. It started relatively low at 0.37 in 2017, increased to a peak of 0.49 in 2018, then dropped to 0.42 in 2019. The lowest point was observed in 2020 at 0.29, coinciding with the significant revenue decline. In 2021, the ratio rose sharply to 0.52, the highest in the period under review, indicating improved efficiency in utilizing equity to generate revenue. This ratio provides insight into the company's operational efficiency and its ability to leverage equity investment for sales generation.