Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Marathon Petroleum Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The analysis of investment activity ratios reveals a consistent pattern of volatility between 2019 and 2023, characterized by a significant contraction in 2020 followed by a robust recovery and peaking in 2022. Across all metrics, there is a clear trend of improved asset utilization and capital efficiency in the post-2020 period, although a slight moderation in performance occurred in 2023.
- Fixed Asset Utilization
- Net fixed asset turnover experienced a sharp decline from 2.72 in 2019 to 1.79 in 2020. However, a strong upward trajectory followed, reaching a peak of 4.98 in 2022 before adjusting to 4.23 in 2023. The inclusion of right-of-use assets slightly lowered these ratios but mirrored the same trend, indicating that the core operational assets became significantly more efficient at generating revenue during the 2021-2022 period.
- Overall Asset Efficiency
- Total asset turnover followed a similar trajectory, dropping to a low of 0.82 in 2020 from 1.26 in 2019. Efficiency improved steadily to reach a five-year high of 1.97 in 2022, ending the period at 1.73 in 2023. This indicates a general increase in the company's ability to utilize its entire asset base to drive sales.
- Equity Productivity
- Equity turnover showed a more pronounced growth trend compared to asset ratios. After a dip to 3.14 in 2020, the ratio climbed aggressively to 6.40 in 2022, before settling at 6.08 in 2023. This substantial increase suggests a significant rise in revenue generation relative to the shareholders' equity base, pointing toward increased capital efficiency or changes in the company's financial leverage over the analyzed period.
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Net Fixed Asset Turnover
Marathon Petroleum Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Property, plant and equipment, net | 35,112) | 35,657) | 37,440) | 39,035) | 45,615) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 4.23 | 4.98 | 3.20 | 1.79 | 2.72 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | 1.28 | 1.64 | 1.06 | — | — | |
| ConocoPhillips | 0.80 | 1.21 | 0.71 | — | — | |
| Exxon Mobil Corp. | 1.56 | 1.95 | 1.28 | — | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.34 | 1.73 | 1.12 | — | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Energy | 1.39 | 1.77 | 1.15 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover = Sales and other operating revenues ÷ Property, plant and equipment, net
= 148,379 ÷ 35,112 = 4.23
2 Click competitor name to see calculations.
Analysis of investment activity reveals a period of significant volatility in revenue generation coupled with a consistent reduction in the net fixed asset base.
- Net Fixed Asset Turnover Trend
- The net fixed asset turnover ratio experienced a sharp decline in 2020, falling to 1.79 from 2.72 in 2019. This was followed by a sustained recovery and expansion phase, reaching a peak of 4.98 in 2022 before moderating to 4.23 in 2023. The overall trajectory indicates an increase in the efficiency of utilizing fixed assets to generate operating revenue over the five-year period.
- Revenue Dynamics
- Operating revenues demonstrated substantial volatility, with a significant contraction in 2020 to 69,779 million US$. Revenues rebounded strongly in 2021 and 2022, peaking at 177,453 million US$ before declining to 148,379 million US$ in 2023. This fluctuation in the revenue stream is the primary driver of the variability observed in the turnover ratio.
- Fixed Asset Base Contraction
- A steady downward trend is observed in net property, plant, and equipment, which decreased from 45,615 million US$ in 2019 to 35,112 million US$ in 2023. This continuous reduction in the asset base has contributed to the higher turnover ratios in the later years, as the company generated significantly higher revenues using a smaller capital footprint compared to the 2019 baseline.
- Efficiency Synthesis
- The peak efficiency observed in 2022 resulted from the convergence of record-high operating revenues and a continuing decline in net fixed assets. While the ratio declined slightly in 2023 due to lower revenues, the efficiency remains substantially higher than the levels recorded between 2019 and 2021.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Marathon Petroleum Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Property, plant and equipment, net | 35,112) | 35,657) | 37,440) | 39,035) | 45,615) | |
| Operating lease right of use assets | 1,233) | 1,214) | 1,372) | 1,521) | 2,459) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 36,345) | 36,871) | 38,812) | 40,556) | 48,074) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 4.08 | 4.81 | 3.09 | 1.72 | 2.58 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Chevron Corp. | 1.24 | 1.59 | 1.03 | — | — | |
| ConocoPhillips | 0.79 | 1.20 | 0.70 | — | — | |
| Exxon Mobil Corp. | 1.51 | 1.89 | 1.24 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.30 | 1.68 | 1.09 | — | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Energy | 1.35 | 1.72 | 1.12 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Sales and other operating revenues ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 148,379 ÷ 36,345 = 4.08
2 Click competitor name to see calculations.
The analysis of long-term investment activity reveals a period of significant volatility in revenue coupled with a consistent reduction in the net fixed asset base between 2019 and 2023. The interaction between these two factors has resulted in substantial fluctuations in the net fixed asset turnover ratio, peaking in 2022.
- Revenue Trends
- Operating revenues experienced a sharp contraction in 2020, falling from 123,949 million US$ to 69,779 million US$. This was followed by a robust recovery phase, with revenues climbing to 119,983 million US$ in 2021 and reaching a five-year peak of 177,453 million US$ in 2022, before moderating to 148,379 million US$ in 2023.
- Fixed Asset Base Evolution
- Property, plant, and equipment, net, exhibited a steady downward trajectory throughout the analyzed period. The asset base decreased from 48,074 million US$ in 2019 to 36,345 million US$ by the end of 2023, representing a total reduction of approximately 24.3%. This indicates a consistent decrease in the capital invested in long-term physical assets.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio mirrored the revenue volatility but was amplified by the shrinking asset base. The ratio declined to 1.72 in 2020 due to the collapse in sales. However, it rose sharply to 3.09 in 2021 and further to 4.81 in 2022. This peak indicates a period of high asset productivity, where a smaller asset base generated record-high revenues. The ratio then adjusted to 4.08 in 2023, reflecting the decrease in annual sales despite the continued slight reduction in net fixed assets.
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Total Asset Turnover
Marathon Petroleum Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 1.73 | 1.97 | 1.41 | 0.82 | 1.26 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | 0.75 | 0.91 | 0.65 | — | — | |
| ConocoPhillips | 0.59 | 0.84 | 0.51 | — | — | |
| Exxon Mobil Corp. | 0.89 | 1.08 | 0.82 | — | — | |
| Total Asset Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.80 | 0.99 | 0.71 | — | — | |
| Total Asset Turnover, Industry | ||||||
| Energy | 0.79 | 0.97 | 0.71 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Total asset turnover = Sales and other operating revenues ÷ Total assets
= 148,379 ÷ 85,987 = 1.73
2 Click competitor name to see calculations.
The financial data indicates a period of significant volatility in revenue generation contrasted by a relatively stable asset base, resulting in fluctuating levels of asset utilization efficiency between 2019 and 2023.
- Revenue Performance
- Sales and other operating revenues experienced a sharp contraction in 2020, falling to 69,779 million US dollars from 123,949 million US dollars in 2019. This was followed by a robust recovery phase, with revenues climbing to 119,983 million US dollars in 2021 and reaching a five-year peak of 177,453 million US dollars in 2022. A subsequent moderate decline occurred in 2023, with revenues settling at 148,379 million US dollars.
- Asset Base Stability
- Total assets remained comparatively stable throughout the analyzed period. After a decrease from 98,556 million US dollars in 2019 to 85,158 million US dollars in 2020, the asset base fluctuated within a narrow range, peaking slightly at 89,904 million US dollars in 2022 before ending 2023 at 85,987 million US dollars. This indicates that revenue growth was not driven by significant capital expansion but rather by increased utilization of existing assets.
- Total Asset Turnover Trends
- The total asset turnover ratio reflects the volatility of revenues. The ratio dropped to 0.82 in 2020, representing a period of diminished operational efficiency. Efficiency improved substantially over the following two years, rising to 1.41 in 2021 and peaking at 1.97 in 2022. In 2023, the ratio moderated to 1.73, aligning with the decrease in operating revenues.
Overall, the analysis reveals a strong recovery in asset productivity following the 2020 downturn. The company demonstrated an ability to generate significantly higher revenue per dollar of assets in 2022 and 2023 compared to the 2019 and 2020 levels, suggesting improved operational leverage or favorable market conditions impacting revenue generation without requiring proportional increases in the investment base.
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Equity Turnover
Marathon Petroleum Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 6.08 | 6.40 | 4.58 | 3.14 | 3.68 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Chevron Corp. | 1.22 | 1.48 | 1.12 | — | — | |
| ConocoPhillips | 1.14 | 1.64 | 1.01 | — | — | |
| Exxon Mobil Corp. | 1.63 | 2.04 | 1.64 | — | — | |
| Equity Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.42 | 1.77 | 1.35 | — | — | |
| Equity Turnover, Industry | ||||||
| Energy | 1.43 | 1.76 | 1.36 | — | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Equity turnover = Sales and other operating revenues ÷ Total MPC stockholders’ equity
= 148,379 ÷ 24,404 = 6.08
2 Click competitor name to see calculations.
An analysis of the investment activity ratios reveals a period of significant volatility in asset utilization, specifically regarding the efficiency of stockholders' equity in generating revenue between 2019 and 2023.
- Revenue Volatility
- Operating revenues experienced a sharp contraction in 2020, decreasing from 123,949 million USD to 69,779 million USD. A strong recovery followed, with revenues peaking in 2022 at 177,453 million USD before moderating to 148,379 million USD in 2023.
- Equity Base Fluctuations
- Total stockholders' equity demonstrated a general decline from 2019 levels of 33,694 million USD, reaching a minimum of 22,199 million USD in 2020. Although equity saw a moderate recovery to 27,715 million USD by 2022, it decreased again to 24,404 million USD by the end of 2023.
- Equity Turnover Performance
- The equity turnover ratio mirrors the volatility of revenues while being influenced by the reduced equity base. After falling to 3.14 in 2020, the ratio ascended rapidly to 4.58 in 2021 and reached a peak of 6.40 in 2022. The ratio remained high at 6.08 in 2023, indicating that the company is generating significantly more revenue per unit of equity than was achieved during the 2019-2020 period.
The observed patterns suggest a substantial increase in the efficiency of equity utilization. The divergence between the declining equity base and the recovered revenue levels has resulted in a structurally higher equity turnover ratio compared to the baseline established in 2019.
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