Marathon Oil Corp. (NYSE:MRO)

Net Fixed Asset Turnover

The net fixed asset turnover ratio exhibited a general upward trend from March 2018 to June 2022. Starting at 0.25 in March 2018, the ratio increased gradually to 0.35 by March 2019, followed by a slight decline through 2020, reaching a low point of 0.20 in December 2020. Subsequently, the ratio recovered, showing consistent improvement through 2021 and early 2022, reaching 0.49 in June 2022. This pattern suggests a period of reduced efficiency or asset utilization around 2020, potentially attributable to external factors, followed by strengthening asset efficiency in the subsequent years.

Total Asset Turnover

Total asset turnover mirrored a similar pattern, though with generally lower values compared to net fixed asset turnover. Beginning at 0.20 in March 2018, it rose steadily to a peak of 0.28 in March 2019. Thereafter, a gradual decline was observed through 2020, with the ratio falling to 0.17 by December 2020. Starting in 2021, the ratio improved once again, rising to 0.39 by June 2022. The decline during 2020 aligns with broader economic challenges, while the recovery phase suggests improved asset utilization across the company's asset base in the following period.

Equity Turnover

Equity turnover began at 0.37 in March 2018 and increased steadily to 0.49 by March 2019. A decline phase followed throughout 2020, with the ratio decreasing to a low of 0.29 in December 2020. From 2021 onward, equity turnover demonstrated robust recovery and growth, climbing from 0.30 in December 2020 to 0.62 in June 2022. This indicates a positive trend in generating revenue relative to shareholders' equity after the sharp downturn, reflecting enhanced operational efficiency or improved profitability in relation to invested equity.

Overall Observations

All three turnover ratios displayed similar cyclical trends, with growth from 2018 to early 2019, followed by declines through 2020, and subsequent recoveries through 2021 and mid-2022. The declines during 2020 coincide with a period of economic disruption, which likely impacted operational efficiency and asset utilization. The recoveries across all ratios point to a restoration of asset productivity and effective capital use. The increases in turnover ratios in 2021 and 2022 indicate strengthening financial performance and improved management of assets and equity.

Revenues

Revenues show a generally fluctuating trend over the observed quarters. Starting at 988 million US dollars in the first quarter of 2017, revenues exhibited an upward trend through 2017 and peaked notably in the first quarter of 2018 at 1537 million. Subsequently, there is some volatility with revenues declining slightly toward the end of 2018 and through 2019, with values around the 1200 to 1381 million range. A significant decline occurs in 2020, where revenues dipped to a low of 490 million in the second quarter, reflecting possible external pressures during that period. By 2021, revenues recover strongly, increasing steadily each quarter and reaching a high of 1732 million in the first quarter and continuing to grow to 2168 million by the second quarter of 2022, which represents the highest value in the dataset.

Property, Plant and Equipment, Net of Accumulated Depreciation, Depletion and Amortization

This asset base shows a generally declining trend over the period, starting from 16,533 million US dollars in the first quarter of 2017. There were some increases observed during 2017; however, from 2018 onward, the net value shows a consistent decline, reducing to 14,357 million by the fourth quarter of 2020 and continuing to decrease to 14,422 million by mid-2022. This suggests ongoing depreciation or asset disposals exceeding new investments or capital additions.

Net Fixed Asset Turnover Ratio

The net fixed asset turnover ratio reflects the efficiency of asset use to generate revenues. Data is available starting from the third quarter of 2017 with a ratio of 0.25, and an increasing trend is noted through 2018 with ratios reaching 0.35 in December 2018. During 2019, there is a slight decline in the ratio, hovering around 0.29 to 0.31, with further decreases through 2020 reaching a low of 0.20 in December 2020. Starting in 2021, the turnover ratio improves significantly, rising from 0.21 in the first quarter to 0.49 by the second quarter of 2022. This indicates an improvement in asset utilization effectiveness in the recent periods, coinciding with the revenue recovery and growth noted.

Revenue Trends

Revenues demonstrated fluctuations over the observed periods, beginning at $988 million in March 2017 and gradually increasing with notable peaks and troughs. A significant revenue increase occurred between Q1 2017 and Q1 2018, reaching approximately $1.54 billion. Subsequently, revenues experienced a downward trend throughout 2019 and sharply declined in the first half of 2020, hitting a low of $490 million in June 2020. From the latter half of 2020 through mid-2022, revenues steadily recovered and exhibited strong growth, culminating at $2.17 billion in June 2022.

Total Assets Trends

Total assets showed a gradual decline over the period under review. Starting from $24.5 billion in March 2017, the asset base consistently decreased, reaching its lowest point around $17 billion in early 2022. A minor uptick was observed toward mid-2022 where assets increased slightly to approximately $18.3 billion. The overall trend reflects a reduction in total asset investment or divestitures during the timeframe.

Total Asset Turnover Analysis

Total asset turnover ratios began near 0.20 in late 2017 and generally improved toward mid-2022. After a brief decline reaching a low of 0.17 in late 2020, asset turnover strengthened considerably, rising to 0.39 by mid-2022. This improvement indicates better utilization of assets to generate revenues, especially notable during the recovery phase post-2020 downturn.

Overall Insights

The combined trends reveal a company experiencing revenue growth followed by a significant contraction in 2020, correlated with a steady reduction in total assets. The rebound in revenue and improving asset turnover in the most recent periods suggest enhanced operational efficiency and stronger asset management. The increased turnover ratio alongside rising revenues despite lower asset levels highlights an improved capacity to derive sales from available resources.

The revenue figures demonstrate notable fluctuations over the analyzed periods. Starting from just under $1 billion in early 2017, revenues steadily increased, peaking near $1.5 billion by the end of 2017 and mid-2018. A decline occurred through 2019, with a more pronounced drop in 2020 reaching the lowest point around $490 million. Subsequently, there was a consistent recovery trend with revenues substantially rising through 2021 and the first half of 2022, culminating in revenues exceeding $2 billion by June 2022.

Stockholders' equity shows a slight downward trajectory overall, starting from approximately $12.6 billion at the beginning of 2017 and declining to about $10.6 billion by the end of 2020. A modest recovery is observed during 2021 and 2022, with equity rising to slightly over $11.5 billion by mid-2022. Despite fluctuations, equity levels remain relatively stable with no drastic variations.

The equity turnover ratio, available from late 2017, exhibits a general pattern of gradual increase until it reached a peak near 0.49 in December 2018. This was followed by a steady decline, bottoming out around 0.29 in the third quarter of 2020. Since that low point, the ratio has shown consistent improvement, accelerating in 2022 to reach its highest value, approximately 0.62 by mid-year, indicating more efficient use of equity in generating revenues in the most recent periods.

Summary of Trends

The data reveals cyclical revenue performance with a significant dip in 2020, likely due to external factors impacting the market. The recovery phase post-2020 is marked and sustained.

Stockholders’ equity maintains relative stability despite fluctuations, suggesting conservative equity management without major dilution or recapitalization events.

The equity turnover ratio’s U-shaped pattern suggests operational efficiency challenges peaking around 2020, followed by a strong recovery, indicating improved asset utilization in generating sales.

Overall, the analyzed financial indicators point to a period of volatility followed by progressive recovery and operational optimization, with revenues rebounding strongly and equity turnover reflecting enhanced capital productivity in recent quarters.