Marathon Oil Corp. (NYSE:MRO)

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibited a gradual increase from 0.29 in the first quarter of 2018 to 0.35 by the end of 2018, indicating improving efficiency in the use of fixed assets to generate revenue. In 2019, the ratio slightly declined and remained relatively stable around 0.30 until late 2019. A noticeable decrease occurred in 2020, reaching a low point of 0.20 by year-end, reflecting reduced asset utilization possibly linked to external factors impacting operations. Starting in early 2021, the ratio began a recovery trend, climbing steadily to 0.49 by mid-2022, suggesting enhanced operational efficiency and asset productivity compared to previous periods.

Total Asset Turnover

Total asset turnover showed a slow but steady increase from 0.23 in early 2018 to 0.28 at the end of that year, suggesting improved overall asset utilization. The ratio held relatively flat around 0.25 to 0.26 throughout 2019. In 2020, a decline was evident, with the ratio falling to a low of 0.17 by the last quarter, indicating diminished capacity to generate sales from total assets. From 2021 onward, there was a consistent upward movement peaking at 0.39 by mid-2022, indicating a recovery and enhanced efficiency in deploying total assets to generate revenue.

Equity Turnover

The equity turnover ratio demonstrated an overall upward trend from 0.41 at the start of 2018 to approximately 0.49 by year-end 2018, implying increased revenue generation relative to shareholders' equity. During 2019, the ratio slightly retreated to the low 0.40s levels and continued to decline further in 2020, reaching around 0.29 by the end of that year. This decrease could reflect lower revenue levels or increased equity base affecting turnover. In 2021 and into mid-2022, a marked recovery occurred, with the ratio rising steadily to 0.62, the highest in the observed periods, indicating improved effectiveness in leveraging equity for revenue growth.

Overall Analysis

Across all three turnover ratios, a consistent pattern emerges. Efficiency and asset utilization improved gradually from 2018 through 2019, followed by a significant downturn in 2020, likely attributable to challenging market conditions during that time. Beginning in 2021, the company demonstrated a robust recovery, with increasing turnover ratios across net fixed assets, total assets, and equity. This recovery phase indicates strengthened operational performance and more effective use of assets and equity to generate sales. The upward momentum into mid-2022 reflects positive trends in financial and operational management.

Revenues

Revenues exhibited a fluctuating trend between March 2018 and June 2022. Initially, revenue levels were relatively stable, averaging around 1,400 to 1,500 million USD per quarter through 2018. However, starting in 2019, a decline is noticeable, reaching a low point in the second quarter of 2020 with 490 million USD, representing a significant drop, likely due to external economic pressures. After this decline, revenues started recovering steadily, surpassing pre-2019 levels by early 2022, peaking at 2,168 million USD in June 2022. This recovery phase indicates a strong resurgence and possibly favorable market conditions or operational improvements.

Property, Plant, and Equipment (PP&E), net of accumulated depreciation, depletion, and amortization

The net value of property, plant, and equipment showed a gradual decrease throughout the period analyzed. Beginning at 16,931 million USD in March 2018, the net PP&E declined almost continuously, lowering to 14,357 million USD by June 2022. This steady decrease suggests ongoing asset depreciation or disposals exceeding new investments in fixed assets, reflecting a possible strategy of asset optimization, divestment, or lack of capital expenditure to replace aging infrastructure.

Net Fixed Asset Turnover

Net fixed asset turnover, a measure of efficiency in using fixed assets to generate revenue, demonstrated variable performance. From March 2018 to December 2020, the ratio decreased from 0.29 to a low of 0.20, implying diminishing efficiency in asset utilization during this time. Following this low, there was a notable improvement starting in 2021, with the ratio increasing substantially to 0.49 by June 2022. This upward trend suggests enhanced operational efficiency or improved revenue generation relative to asset base, aligning with the revenue recovery pattern observed in the same period.

Revenue Trends

Revenue exhibited fluctuations over the observed quarters, beginning at $1,537 million in March 2018 and experiencing a general decline through 2019 and into early 2020, reaching a low point at $490 million in June 2020. This downturn is notable and may indicate external pressures or operational challenges during this period. Following this low, revenues gradually recovered, increasing steadily through 2021 and into the first half of 2022, ultimately reaching a peak of $2,168 million in June 2022. This upward trend in recent quarters reflects a pronounced rebound and possibly improved market conditions or operational performance.

Total Assets

Total assets displayed a downward trend from $21,634 million in March 2018 to $16,994 million in June 2022. There were slight fluctuations, but overall total assets decreased steadily over the period, with the most significant declines occurring between late 2019 and mid-2021. This consistent reduction suggests asset disposals, impairment, or other adjustments affecting the company's asset base. However, slight stabilization and small increases appear in late 2021 and early 2022, possibly indicating renewed investment or asset acquisition activity.

Total Asset Turnover Ratio

The total asset turnover ratio began at 0.23 in March 2018 and showed a mild upward trend until peaking briefly at 0.28 by December 2018. It then stabilized around 0.25-0.26 through 2019. The ratio declined through 2020, hitting a low of 0.17 by December 2020, corresponding with reduced revenue and asset levels. From 2021 onwards, the ratio improved significantly, rising to 0.39 by June 2022, which indicates enhanced efficiency in using assets to generate revenue. This improvement aligns with the observed revenue recovery and suggests a more effective utilization of the company’s asset base in recent quarters.

Overall Insights

The data indicates a period of operational downturn around 2019 to mid-2020, with decreases in both revenue and total assets, coupled with a decline in asset turnover efficiency. Following this period, there is a clear recovery trend with increasing revenues and improving asset turnover ratios, despite a continued gradual decline in the asset base overall. The enhanced asset turnover ratio suggests the company is generating more revenue per dollar of assets, highlighting improving operational efficiency in the latest periods.

The financial data reveals several notable trends over the examined quarters. Revenues exhibit a cyclical pattern with fluctuations influenced by external factors. Initially, revenues decreased from the first quarter of 2018 through the first quarter of 2020, reaching a low point in the second quarter of 2020. Subsequently, there is a marked recovery and steady increase through 2022, culminating in the highest figures observed at the end of the analyzed period.

Stockholders’ equity demonstrates relative stability with minor fluctuations across the quarters. The equity values slightly decline from late 2019 to the end of 2020, suggesting potential impacts from market conditions or operational challenges during that timeframe. However, from 2021 onward, equity levels stabilize and show a modest upward trend, indicating an improvement in the company’s financial base.

The equity turnover ratio, which indicates how efficiently the equity is utilized to generate revenues, shows a declining trend from early 2018 until the last quarter of 2020. This decline corresponds with the decrease in revenues relative to equity during that period. From early 2021, the ratio increases significantly, reflecting enhanced operational efficiency and stronger revenue generation relative to the equity employed.

Revenues

Generally declining from early 2018 through mid-2020, with a low point around $490 million in the second quarter of 2020, followed by sustained growth reaching over $2 billion by mid-2022.

Stockholders’ Equity

Relatively stable with mild decreases noted around 2019-2020, then stabilizing and showing slight growth in 2021 and 2022, indicating resilience in financial equity despite market challenges.

Equity Turnover Ratio

Declining from approximately 0.41 in early 2018 to around 0.29 by late 2020, then increasing substantially to 0.62 by mid-2022, suggesting improved efficiency in utilizing equity to generate revenues in recent periods.