Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Return on Sales
Return on Investment
Marathon Petroleum Corp., profitability 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 profitability metrics exhibit a period of extreme volatility between 2019 and 2023, characterized by a severe contraction in 2020 followed by a strong expansionary phase. While 2020 represents a systemic low across all measured ratios, the subsequent recovery through 2022 exceeded the baseline performance established in 2019, with a slight normalization occurring in 2023.
- Profit Margin Trends
- Gross profit margins experienced a significant decline to 5.80% in 2020 before ascending to a peak of 14.53% in 2022, eventually settling at 13.35% in 2023. Operating and net profit margins followed a similar trajectory but exhibited more pronounced volatility. Operating margins plummeted to -17.55% in 2020 before rebounding to 12.10% in 2022, and net profit margins shifted from -14.08% in 2020 to a peak of 8.18% in 2022, ending the period at 6.52%.
- Efficiency and Return Ratios
- Return on Equity (ROE) demonstrated the most dramatic variance, collapsing to -44.26% in 2020 and subsequently surging to 52.38% in 2022, before moderating to 39.67% in 2023. Return on Assets (ROA) mirrored this pattern, moving from a trough of -11.54% in 2020 to a high of 16.15% in 2022, and concluding the period at 11.26%.
- Overall Profitability Trajectory
- The transition from 2020 to 2022 indicates a robust recovery in operational efficiency and bottom-line profitability. The subsequent decline in all ratios between 2022 and 2023 suggests a cooling period or a stabilization of margins following the post-2020 surge.
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Gross Profit Margin
Marathon Petroleum Corp., gross profit margin calculation
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
Gross profit margin = 100 × Gross margin ÷ Sales and other operating revenues
= 100 × 19,813 ÷ 148,379 = 13.35%
The gross profit margin exhibits significant volatility between 2019 and 2023, characterized by a sharp contraction followed by a robust recovery and subsequent stabilization at a higher baseline than pre-2020 levels.
- Margin Contraction (2019-2020)
- A substantial decline is observed in 2020, where the gross profit margin fell from 11.06% to 5.80%. This period was marked by a sharp decrease in sales and other operating revenues, which dropped from 123,949 million to 69,779 million, resulting in the lowest gross margin of the five-year period at 4,046 million.
- Recovery and Peak Expansion (2021-2022)
- A strong upward trajectory is evident starting in 2021, with the margin improving to 8.31%. This growth accelerated significantly in 2022, reaching a peak of 14.53%. During this phase, sales grew to 177,453 million, and the gross margin expanded to 25,782 million, indicating a significant increase in the ability to convert revenue into gross profit.
- Performance Stabilization (2023)
- In 2023, a slight moderation occurred as the gross profit margin decreased to 13.35% alongside a reduction in revenues to 148,379 million. Despite this decline from the 2022 peak, the gross margin of 19,813 million remains substantially higher than the levels recorded from 2019 through 2021, suggesting a sustained shift toward higher operational profitability.
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Operating Profit Margin
Marathon Petroleum Corp., operating profit margin 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) | ||||||
| Income (loss) from operations | 14,514) | 21,469) | 4,300) | (12,247) | 5,576) | |
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 9.78% | 12.10% | 3.58% | -17.55% | 4.50% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 15.37% | 21.42% | 14.81% | — | — | |
| ConocoPhillips | 30.57% | 36.80% | 29.84% | — | — | |
| Exxon Mobil Corp. | 16.24% | 19.82% | 11.91% | — | — | |
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 17.32% | 22.22% | 14.57% | — | — | |
| Operating Profit Margin, Industry | ||||||
| Energy | 17.27% | 21.94% | 14.46% | — | — | |
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
Operating profit margin = 100 × Income (loss) from operations ÷ Sales and other operating revenues
= 100 × 14,514 ÷ 148,379 = 9.78%
2 Click competitor name to see calculations.
The operating performance from 2019 to 2023 is characterized by extreme volatility, featuring a severe contraction in 2020 followed by a robust recovery and a peak in 2022, before entering a period of slight normalization in 2023.
- Operating Profit Margin Volatility
- A sharp decline in profitability occurred between 2019 and 2020, with the operating profit margin plummeting from 4.50% to -17.55%. This decline was driven by a significant reduction in sales and other operating revenues, which fell from US$ 123,949 million to US$ 69,779 million, resulting in a substantial operating loss of US$ 12,247 million.
- Recovery and Peak Performance
- A recovery phase began in 2021 as the operating profit margin returned to positive territory at 3.58%. This growth accelerated in 2022, marking the most profitable year in the observed period. The operating profit margin reached a peak of 12.10%, supported by a surge in revenues to US$ 177,453 million and a corresponding increase in operating income to US$ 21,469 million.
- Normalization Trends
- In 2023, a downward adjustment in margins is observed, with the operating profit margin softening to 9.78%. While operating income decreased to US$ 14,514 million and revenues declined to US$ 148,379 million compared to the 2022 peak, the profitability levels remain significantly elevated relative to the 2019 and 2021 figures.
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Net Profit Margin
Marathon Petroleum Corp., net profit margin 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) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 6.52% | 8.18% | 8.12% | -14.08% | 2.13% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 10.85% | 15.05% | 10.04% | — | — | |
| ConocoPhillips | 19.52% | 23.80% | 17.63% | — | — | |
| Exxon Mobil Corp. | 10.76% | 13.98% | 8.33% | — | — | |
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 11.63% | 15.41% | 9.78% | — | — | |
| Net Profit Margin, Industry | ||||||
| Energy | 11.68% | 15.29% | 9.70% | — | — | |
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 profit margin = 100 × Net income (loss) attributable to MPC ÷ Sales and other operating revenues
= 100 × 9,681 ÷ 148,379 = 6.52%
2 Click competitor name to see calculations.
The net profit margin exhibits significant volatility over the five-year period from 2019 to 2023, characterized by a severe contraction in 2020 followed by a robust recovery and subsequent moderation. The trajectory reflects extreme fluctuations in both top-line revenue and bottom-line net income, indicating a high sensitivity to external market conditions.
- Profitability Volatility and Recovery
- A sharp decline in profitability occurred in 2020, where the net profit margin dropped to -14.08%. This coincided with a substantial decrease in sales and other operating revenues, which fell from 123,949 million US$ in 2019 to 69,779 million US$ in 2020, resulting in a net loss of 9,826 million US$. A rapid reversal followed in 2021, as the margin recovered to 8.12%, supported by a return to revenue levels near 120,000 million US$.
- Peak Performance Period
- The highest level of absolute profitability was achieved in 2022. During this period, sales reached a peak of 177,453 million US$, and net income climbed to 14,516 million US$. The net profit margin remained stable relative to the previous year, edging slightly upward to 8.18%, representing the most efficient conversion of revenue to profit within the analyzed timeframe.
- Recent Margin Compression
- A downward trend in both revenue and profitability is observed in 2023. Sales decreased to 148,379 million US$, and net income contracted to 9,681 million US$. This resulted in a compression of the net profit margin to 6.52%. While this figure remains significantly higher than the 2019 baseline of 2.13%, it indicates a reduction in operational profitability compared to the 2021-2022 peak.
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Return on Equity (ROE)
Marathon Petroleum Corp., ROE 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) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Profitability Ratio | ||||||
| ROE1 | 39.67% | 52.38% | 37.16% | -44.26% | 7.83% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | 13.28% | 22.27% | 11.24% | — | — | |
| ConocoPhillips | 22.23% | 38.91% | 17.79% | — | — | |
| Exxon Mobil Corp. | 17.58% | 28.58% | 13.67% | — | — | |
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.46% | 27.31% | 13.24% | — | — | |
| ROE, Industry | ||||||
| Energy | 16.67% | 26.98% | 13.21% | — | — | |
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
ROE = 100 × Net income (loss) attributable to MPC ÷ Total MPC stockholders’ equity
= 100 × 9,681 ÷ 24,404 = 39.67%
2 Click competitor name to see calculations.
The Return on Equity (ROE) for the period between 2019 and 2023 exhibits extreme volatility, characterized by a severe contraction in 2020 followed by a rapid expansion and a subsequent moderation. This trajectory indicates a high degree of sensitivity in profitability relative to the equity base, driven primarily by significant fluctuations in net income.
- Analysis of Profitability Swings
- A sharp deterioration in performance occurred in 2020, as net income fell to a loss of US$ 9,826 million, causing the ROE to plummet from 7.83% in 2019 to -44.26%. A robust recovery followed in 2021 and 2022, with ROE increasing to 37.16% and peaking at 52.38%, respectively. This peak was supported by a maximum net income of US$ 14,516 million recorded in 2022.
- Equity Base Trends
- Total stockholders' equity experienced a notable decline from US$ 33,694 million in 2019 to a low of US$ 22,199 million in 2020. While equity recovered slightly to US$ 27,715 million by 2022, it decreased again to US$ 24,404 million in 2023. The reduction in the equity base during the period of high net income growth contributed to the magnification of the ROE percentages observed in 2021 and 2022.
- Recent Normalization
- A downward correction in ROE is observed in 2023, with the ratio falling to 39.67%. This decline is linked to a reduction in net income to US$ 9,681 million. Despite this moderation from the 2022 peak, the ROE remains substantially elevated compared to the 2019 baseline, suggesting a shift in the company's profitability profile over the five-year horizon.
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Return on Assets (ROA)
Marathon Petroleum Corp., ROA 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) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Profitability Ratio | ||||||
| ROA1 | 11.26% | 16.15% | 11.41% | -11.54% | 2.68% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | 8.17% | 13.76% | 6.52% | — | — | |
| ConocoPhillips | 11.42% | 19.91% | 8.91% | — | — | |
| Exxon Mobil Corp. | 9.57% | 15.10% | 6.80% | — | — | |
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.31% | 15.25% | 6.99% | — | — | |
| ROA, Industry | ||||||
| Energy | 9.28% | 14.84% | 6.84% | — | — | |
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
ROA = 100 × Net income (loss) attributable to MPC ÷ Total assets
= 100 × 9,681 ÷ 85,987 = 11.26%
2 Click competitor name to see calculations.
The Return on Assets (ROA) for the period between 2019 and 2023 demonstrates significant volatility, characterized by a sharp contraction followed by a strong recovery and subsequent moderation.
- Profitability and Efficiency Trends
- A substantial decline in profitability occurred in 2020, with net income falling to a loss of US$ 9,826 million. This resulted in a negative ROA of -11.54%, marking the lowest point of asset efficiency during the analyzed period.
- Recovery and Peak Performance
- A rapid reversal in performance is observed between 2021 and 2022. Net income recovered to US$ 9,738 million in 2021 and reached a peak of US$ 14,516 million in 2022. Consequently, the ROA surged to 16.15% in 2022, indicating a period of high earnings generation relative to the total asset base.
- Asset Base Dynamics
- Total assets decreased from US$ 98,556 million in 2019 to a range between US$ 85,158 million and US$ 89,904 million from 2020 through 2023. Because the asset base remained relatively stable following the 2020 reduction, the fluctuations in ROA are primarily driven by variances in net income rather than shifts in the scale of total assets.
- Recent Performance Adjustment
- In 2023, a moderation in performance is evident as net income decreased to US$ 9,681 million, leading to a reduction in ROA to 11.26%. Despite this decline from the 2022 peak, the efficiency ratio remains significantly higher than the levels recorded in 2019 and 2020.
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