Marathon Petroleum Corp. (NYSE:MPC)

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant fluctuations over the five-year period. It started at 6,182 million USD in 2019, experienced a substantial decline to a negative value of -10,978 million USD in 2020, indicating a notable loss. The following years showed recovery, with NOPAT rising back to 6,187 million USD in 2021 and reaching a peak of 17,951 million USD in 2022. However, in 2023, NOPAT decreased to 10,783 million USD, which, while lower than the previous year, remained well above the initial years.

Invested Capital

Invested capital demonstrated a decreasing trend from 2019 to 2021, moving from 82,004 million USD to 63,579 million USD. In 2022, there was an increase to 69,547 million USD, followed by a decrease again to 63,897 million USD in 2023. Overall, the invested capital at the end of the period is lower than at the beginning, reflecting possible divestments, asset sales, or operational restructuring.

Return on Invested Capital (ROIC)

The ROIC followed a pattern consistent with NOPAT trends. It began at a positive 7.54% in 2019, fell sharply to -15.64% in 2020, correlating with the loss experienced that year. Subsequently, ROIC improved to 9.73% in 2021 and surged to 25.81% in 2022, indicating strong profitability relative to invested capital. In 2023, ROIC declined to 16.88%, which while lower than the prior year, still represented a robust return compared to the early years.

Summary of Trends and Insights

The analyzed financial measures reveal a volatile performance period with a pronounced negative impact in 2020, likely due to extraordinary or external factors affecting profitability. The subsequent recovery in both profitability and return metrics suggests effective management responses or favorable market conditions. The fluctuations in invested capital, combined with the ROIC movements, imply strategic adjustments to asset base and capital efficiency. Despite the decline in 2023 compared to the peak year of 2022, the company maintained a comparatively strong operational profit and capital return, which could indicate resilience and adaptive capacity in its business operations.

Operating Profit Margin (OPM)

The operating profit margin displayed a significant decline in 2020, dropping to -18.45% from a positive 5.25% in 2019. This negative margin indicates a loss in operational profitability during that year. However, the company recovered strongly in subsequent years, with the OPM rising to 5.74% in 2021 and further improving to 12.61% in 2022. In 2023, the margin slightly decreased to 9.3%, but remained positive and well above the 2019 level, indicating sustained operational profitability.

Turnover of Capital (TO)

The turnover of capital showed a downward trend in 2020, falling to 0.99 from 1.51 in 2019, reflecting reduced efficiency in capital utilization during that year. From 2021 onwards, there was a substantial improvement, with the ratio increasing to 1.89 and peaking at 2.55 in 2022. Although there was a slight decrease in 2023 to 2.32, the turnover ratio remained significantly above the 2019 level, suggesting enhanced capital efficiency over the medium term.

1 – Effective Cash Tax Rate (CTR)

The value of 1 – CTR was notably high in 2019 and 2020, at 95.03% and 100% respectively, indicating minimal cash tax payments relative to earnings during these years. From 2021 onwards, this metric gradually declined, reaching 89.77% in 2021, 80.24% in 2022, and further to 78.18% in 2023. This trend implies an increasing cash tax obligation over time, potentially reflecting improved profitability or changes in tax strategy.

Return on Invested Capital (ROIC)

The return on invested capital experienced a sharp downturn in 2020, registering -15.64%, which aligns with negative operating margins and indicates significant value destruction during that period. The company rebounded strongly thereafter, with ROIC rising to 9.73% in 2021 and peaking at 25.81% in 2022, representing a substantial improvement in capital efficiency and profitability. In 2023, ROIC decreased to 16.88% but remained robust and considerably higher than 2019 levels.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT exhibited significant volatility over the periods analyzed. Starting at a positive value of 6,506 million USD in 2019, it sharply declined to a negative 12,877 million USD in 2020, indicating a considerable loss likely related to extraordinary circumstances during that year. The figure rebounded substantially in 2021 to 6,892 million USD, followed by a pronounced increase to 22,372 million USD in 2022. In 2023, NOPBT decreased to 13,793 million USD but remained well above pre-2020 levels, suggesting an overall recovery and improvement in profitability after the downturn.

Sales and Other Operating Revenues

Sales and other operating revenues displayed wide fluctuations corresponding with broader economic or industry conditions. Revenues fell markedly from 123,949 million USD in 2019 to 69,779 million USD in 2020. The subsequent years saw a recovery trend, with revenues reaching 119,983 million USD in 2021 and peaking at 177,453 million USD in 2022. In 2023, revenues receded somewhat to 148,379 million USD but remained significantly higher than the 2019 and 2020 levels, indicating overall growth in sales activity after the initial dip.

Operating Profit Margin (OPM)

The operating profit margin mirrored the company's profitability trends. It was positive at 5.25% in 2019 before plunging to -18.45% in 2020, signaling operating losses during that year. The margin recovered to 5.74% in 2021, increased substantially to 12.61% in 2022, and then declined to 9.3% in 2023. Despite the decrease in 2023, the margin remained notably above pre-2020 levels, reflecting improved operational efficiency and profitability over the period.

The financial data over the five-year period displays notable fluctuations in key metrics related to revenues, capital investment, and capital turnover.

Sales and Other Operating Revenues

Revenues exhibit significant volatility. Starting from US$123,949 million in 2019, there is a pronounced decline in 2020 to US$69,779 million, likely reflecting adverse market or operational conditions that year. This is followed by a robust recovery in 2021 with revenues reaching US$119,983 million, and a peak in 2022 at US$177,453 million. However, 2023 shows a reduction to US$148,379 million, indicating a partial retreat from the previous year's high but still substantially above the 2019 level.

Invested Capital

Invested capital trends downward overall through the period. Beginning at US$82,004 million in 2019, capital investment decreases to US$70,186 million in 2020, continues to decline to US$63,579 million in 2021, then experiences a slight increase to US$69,547 million in 2022 before falling again to US$63,897 million in 2023. This pattern indicates a possible strategic reduction or optimization of capital deployed despite fluctuations in revenue.

Turnover of Capital (TO)

The turnover ratio shows a significant improvement after an initial decline. The ratio falls from 1.51 in 2019 to 0.99 in 2020, reflecting lower asset efficiency or revenue generation per unit of capital during that year. Subsequently, the turnover ratio markedly increases to 1.89 in 2021 and reaches a peak of 2.55 in 2022, indicating enhanced utilization of assets or capital in generating revenues. While there is a slight decrease to 2.32 in 2023, the ratio remains well above the 2019 level, highlighting continued efficiency improvements despite lower revenues compared to 2022.

In summary, the data indicates that the company faced challenges in 2020 that significantly reduced both revenues and capital turnover. Following this, there was a period of strong recovery and increased efficiency through 2021 and 2022, even as invested capital generally declined. The partial revenue decrease in 2023 coupled with a still-strong capital turnover ratio suggests ongoing focus on operational effectiveness and capital management.

The financial data reveals significant volatility in critical tax-related and profitability metrics over the observed five-year period.

Cash Operating Taxes

Cash operating taxes exhibited pronounced fluctuations, beginning at a positive value of 324 million US$ in 2019 and sharply decreasing to a negative figure of -1899 million US$ in 2020, indicating a possible tax refund or credit during that year. Subsequently, the taxes reverted to positive figures in 2021 at 705 million US$, followed by a substantial increase to 4421 million US$ in 2022, before declining to 3010 million US$ in 2023. This pattern suggests considerable variability in tax obligations possibly influenced by changes in operational profitability or tax policy adjustments.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT experienced a notable negative value in 2020 at -12877 million US$, contrasting with positive profits in other years. Starting from 6506 million US$ in 2019, it declined sharply in 2020, indicating a significant operational loss or impairment event. Recovery and growth followed in 2021 with profits of 6892 million US$, escalating markedly to 22372 million US$ in 2022, before decreasing to 13793 million US$ in 2023. This trend suggests a strong rebound after the downturn in 2020, with performance peaking in 2022.

Effective Cash Tax Rate (CTR)

The effective cash tax rate fluctuated, with data unavailable for 2020. It started at a low rate of 4.97% in 2019, increased to 10.23% in 2021, and continued rising to 19.76% in 2022 and 21.82% in 2023. The upward trend indicates growing tax expenses relative to net operating profit before taxes over the latter period, which may reflect changes in profitability, tax regulations, or asset base adjustments.

Overall, the data indicates a substantial operational and tax environment disruption in 2020, followed by a recovery phase characterized by increased profitability and higher tax rates in subsequent years. The effective cash tax rate increase aligns with the rising operating profits after 2020, suggesting normalization of tax payments concurrent with improvement in financial performance.