Occidental Petroleum Corp. (NYSE:OXY)

Raw Materials

The value of raw materials showed an upward trend from 2020 to 2022, increasing from $70 million to $120 million. However, it slightly declined in the subsequent years, reaching $115 million in 2023 and further decreasing marginally to $113 million in 2024. This indicates a peak in raw material inventories in 2022 followed by a moderate reduction in the following years.

Materials and Supplies

Materials and supplies experienced fluctuations but generally trended upwards over the entire period. The values decreased from $848 million in 2020 to $783 million in 2021, then increased steadily to $913 million in 2022 and $988 million in 2023, and saw a significant jump to $1,279 million in 2024. This suggests an overall increase in investment or accumulation of materials and supplies towards the end of the period.

Commodity Inventory and Finished Goods

This category showed moderate growth from $1,009 million in 2020 to $1,147 million in 2022. However, it declined notably after 2022, dropping to $1,027 million in 2023 and further down to $796 million in 2024. This decline may indicate a reduction in holding finished goods and commodities, possibly due to sales, production adjustments, or inventory management strategies.

Inventories, at FIFO

Inventories measured using FIFO methodology generally increased from $1,927 million in 2020 to a peak of $2,180 million in 2022. It then decreased slightly to $2,130 million in 2023 before increasing again to $2,188 million in 2024. The fluctuations are relatively minor compared to the early growth, suggesting a stabilization of inventory levels with a slight upward trend towards 2024.

Revaluation to LIFO

The revaluation adjustment from FIFO to LIFO shows consistent negative values throughout the years, indicating that LIFO inventory valuation results in lower inventory values compared to FIFO. The negative revaluation increased in magnitude from -$29 million in 2020 to a peak negative adjustment of -$121 million in 2022. This was followed by a reduction in the negative adjustment to -$108 million in 2023 and -$93 million in 2024, implying some narrowing of the difference between LIFO and FIFO valuations.

Inventories (LIFO basis)

Inventories reported on a LIFO basis decreased from $1,898 million in 2020 to $1,846 million in 2021, then increased to $2,059 million in 2022. After a slight reduction to $2,022 million in 2023, inventories increased again to $2,095 million in 2024. This pattern largely mirrors the FIFO inventory trend but at overall lower inventory values due to the LIFO adjustment, reflecting consistent inventory management under different valuation methods.

The data reveals several notable trends in the financial position and performance metrics over the five-year period.

Inventories

Reported inventory levels exhibited a general increase from 1,898 million USD in 2020 to 2,095 million USD in 2024, with a slight dip in 2021. The inventory LIFO reserve adjustment results in consistently higher inventory valuations, with adjusted inventories increasing steadily from 1,927 million USD in 2020 to 2,188 million USD in 2024, indicating the impact of accounting choice on asset valuation.

Current Assets

Reported current assets peaked in 2021 at 10,211 million USD before declining to 8,375 million USD in 2023 and recovering slightly to 9,070 million USD in 2024. Adjusted current assets mirror this trend but are marginally higher each year, reinforcing the effect of inventory accounting adjustments on short-term asset metrics.

Total Assets

Reported total assets decreased from 80,064 million USD in 2020 to 72,609 million USD in 2022, followed by a moderate increase to 85,445 million USD in 2024, reflecting potential asset acquisitions, revaluations, or other non-operating factors. Adjusted total assets follow the same pattern but are consistently slightly above reported values, suggesting inventory reserves are a small but stable component of total assets.

Stockholders’ Equity

Stockholders’ equity showed a strong upward trajectory, increasing from 18,573 million USD in 2020 to 34,159 million USD in 2024. This increase is consistent both on reported and adjusted bases, indicating sustained improvements in retained earnings or capital infusion despite fluctuations in net income. The equity adjustment is minor but persistent.

Net Income

Reported net income experienced significant volatility. There was a substantial loss in 2020 of approximately -14,831 million USD, followed by a recovery to positive 2,322 million USD in 2021 and a strong increase to 13,304 million USD in 2022. However, net income declined sharply afterward to 4,696 million USD in 2023 and further to 3,056 million USD in 2024. Adjusted net income is closely aligned with reported figures, indicating minimal effect of inventory adjustments on profitability metrics.

Overall, the adjustment for the LIFO reserve uniformly increases asset-related balances across inventories, current assets, and total assets with a relatively modest impact on equity and net income. The company’s balance sheet demonstrates an improving equity base amid fluctuating asset levels and volatile earnings, suggesting resilience but also sensitivity to external factors affecting profitability and asset management.

Current Ratio Trends

The reported current ratio showed an improvement from 1.07 in 2020 to a peak of 1.23 in 2021, before declining to 0.92 in 2023 and slightly recovering to 0.95 in 2024. The adjusted current ratio closely mirrors this pattern, indicating consistency between reported and inventory LIFO reserve adjusted data. The overall trend suggests increasing liquidity in the early years followed by a reduction in the ability to cover short-term liabilities in the most recent two years.

Net Profit Margin Analysis

Net profit margin exhibited significant volatility. There was an extremely negative margin around -83% in 2020, recovering sharply to positive territory with 8.95% in 2021, and a strong performance at 36.32% in 2022. However, margins declined to 16.62% in 2023 and further to 11.43% in 2024. Adjusted figures show marginally higher margins but follow an identical trajectory, highlighting a pattern of initial severe losses, a robust recovery, and a recent declining trend in profitability margins.

Total Asset Turnover

Asset turnover ratios increased from 0.22 in 2020 to 0.50 in 2022, indicating improving efficiency in using assets to generate revenue. However, the ratio declined again to 0.38 in 2023 and 0.31 in 2024. Adjusted data remains identical to reported figures, confirming the consistency of turnover trends. This pattern suggests that operational efficiency strengthened significantly through 2022 but has since weakened.

Financial Leverage

Financial leverage decreased markedly from a high of 4.31 in 2020 to around 2.4 in 2022 and stabilized near 2.5 in 2023 and 2024. The adjusted leverage shows minimal deviation from reported figures. This decline reflects a reduction in dependency on debt relative to equity, implying a stronger equity base or reduced liabilities over time.

Return on Equity (ROE)

ROE shows substantial volatility, beginning with a sharply negative figure near -80% in 2020, transforming to an 11.42% positive return in 2021, peaking at over 44% in 2022, then dropping to 15.52% and 8.95% in the subsequent years. Adjusted ROE values are closely aligned with reported values. This suggests a recovery and strong profitability in 2022 followed by a declining trend in shareholder returns.

Return on Assets (ROA)

ROA follows a similar pattern to ROE, with a negative return of about -18.5% in 2020, turning positive and improving to 18.32% in 2022. It then decreased to around 6.3% in 2023 and further to about 3.5% in 2024. Adjustments for inventory LIFO reserves do not materially affect these figures. The trend indicates a recovery in asset profitability with subsequent declines in recent periods.

General Observations

The financial data reveal a pattern of significant distress in 2020 with poor liquidity, negative profitability, high leverage, and weak returns. The company experienced marked improvements during 2021 and peaked in operational efficiency and profitability in 2022. Following this peak, there has been a noticeable reversal or softening in key metrics through 2023 and 2024, characterized by reduced liquidity, declining profit margins, turnover, and returns, while leverage remains relatively low and stable. Adjustments for inventory LIFO reserve have minimal impact on the overall trends, indicating the robustness of these findings.

The analysis of the data reveals several noteworthy trends in the company's liquidity and current asset management over the five-year period from 2020 to 2024.

Current Assets

Both reported and inventory LIFO reserve adjusted current assets exhibit similar patterns over the period. From 2020 to 2021, there was a significant increase, with reported current assets rising from 8,819 million USD to 10,211 million USD, and adjusted current assets showing a parallel increase from 8,848 million USD to 10,310 million USD. Subsequently, both measures experienced a decline in 2022 and 2023, reaching respective lows of 8,886 million USD and 8,375 million USD (reported), and 9,007 million USD and 8,483 million USD (adjusted). In 2024, current assets rebounded, climbing to 9,070 million USD (reported) and 9,163 million USD (adjusted).

Current Ratio

The current ratio, both reported and adjusted, follows a pattern consistent with changes in current assets. From 2020 to 2021, the ratio increased markedly from 1.07 to 1.23 (reported), and 1.08 to 1.24 (adjusted), indicating improved short-term liquidity. However, the ratio then declined over the next two years, dropping to 0.92 (reported) and 0.93 (adjusted) by the end of 2023, signaling a deterioration in liquidity to below the benchmark level of 1.0. In 2024, a slight recovery occurred, with ratios increasing to 0.95 (reported) and 0.96 (adjusted), though still remaining below 1.0.

Insights

The data suggest that the company experienced an initial strengthening of liquidity and current asset levels through 2021, followed by a period of contraction over the next two years, potentially reflecting increased short-term liabilities or reduced current assets. The modest recovery in 2024 indicates stabilization but not a full return to prior liquidity levels. The close correspondence between reported and adjusted figures implies limited impact from the inventory LIFO reserve adjustments on overall liquidity assessment.

The financial data reveals significant fluctuations in both the reported and adjusted net income attributable to Occidental over the five-year period from 2020 to 2024. In 2020, both net income figures were substantially negative, reflecting considerable losses. However, the subsequent year shows a marked recovery, with net income turning positive and increasing sharply in 2021.

In 2022, net income reached its peak within this timeframe, exceeding 13 billion US dollars in both reported and adjusted terms, indicating a strong period of profitability. This was followed by a decline in 2023 and 2024, where income levels decreased but remained positive, suggesting some moderation in earnings.

The net profit margins follow a consistent pattern with the net income figures. Margins were deeply negative in 2020, closely corresponding to the loss incurred. In 2021, margins sharply improved to near 9%, and then surged to over 36% in 2022, aligning with the peak in net income. The profit margins then declined in the two subsequent years, settling at just under 12% by 2024, which aligns with the observed decrease in net income during the same periods.

Adjusted results closely mirror the reported figures across all years, indicating minimal impact from LIFO reserve adjustments on the overall profitability measures and margins. The slight differences between reported and adjusted values suggest that inventory accounting methods had a relatively small effect on the reported financial outcomes.

Summary of Trends:

- 2020 exhibited significant losses, reflected in both net income and profit margins.

- 2021 showed a strong recovery with positive earnings and improved margins.

- 2022 represented a peak in profitability with the highest net income and margin levels.

- 2023 and 2024 experienced a decline in profitability, though results remained positive.

- Adjusted financials closely track reported results, indicating limited influence from inventory LIFO reserve adjustments.

The financial data shows trends in total assets and total asset turnover ratios over the five-year period from 2020 to 2024.

Total Assets

Reported total assets exhibit an initial decline from 80,064 million US dollars in 2020 to 72,609 million US dollars in 2022. Subsequently, reported assets increase to 74,008 million in 2023 and further rise to 85,445 million in 2024, surpassing the initial value recorded in 2020. The adjusted total assets, which account for inventory LIFO reserve adjustments, follow a similar pattern with slightly higher values each year, indicating the effect of the adjustment is relatively consistent and minor in scale.

Total Asset Turnover

The reported total asset turnover ratio increases significantly from 0.22 in 2020 to a peak of 0.50 in 2022. After this peak, the turnover ratio declines, decreasing to 0.38 in 2023 and further to 0.31 in 2024. The adjusted total asset turnover mirrors the reported ratio exactly, implying that inventory LIFO reserve adjustments did not materially alter the turnover metric during these periods.

Trend Analysis

There is a notable inverse relationship between asset levels and turnover ratios in the data. When total assets decline from 2020 to 2022, asset turnover improves markedly, which suggests more efficient use of assets in generating revenues during that period. Conversely, as total assets increase from 2023 onwards, asset turnover experiences a decrease, reflecting a reduced efficiency or slower turnover of assets. The overall pattern implies a dynamic operational environment with fluctuating asset investment and corresponding changes in asset utilization efficiency.

The analysis of the financial data over the five-year period reveals several notable trends in the company's asset base, equity position, and financial leverage, both on reported and inventory LIFO reserve adjusted bases.

Total Assets

Reported total assets show a declining trend from 80,064 million US dollars in 2020 to a low of 72,609 million in 2022, followed by a recovery to 85,445 million in 2024. The adjusted total assets, which incorporate inventory LIFO reserve adjustments, follow a very similar pattern with slightly higher values, indicating minor upward adjustments due to inventory considerations. Overall, the asset base contracts significantly by 2022 before expanding again toward 2024.

Stockholders’ Equity

Stockholders’ equity demonstrates consistent growth throughout the period. Reported equity increases steadily from 18,573 million in 2020 to 34,159 million in 2024, which indicates a strengthening equity base. The adjusted equity values mirror the reported figures closely but are marginally higher, reflecting a minor positive adjustment from inventory reserves. This rising equity position suggests an improvement in net asset value or retained earnings over time.

Financial Leverage

Financial leverage, expressed as a ratio, declines significantly between 2020 and 2022, dropping from approximately 4.31 to 2.41. This trend suggests a substantial reduction in the relative use of debt or liabilities to finance assets during this period. From 2022 onwards, leverage stabilizes and shows a slight increase, reaching around 2.5 by 2024. Reported and adjusted leverage ratios are nearly identical, implying that inventory adjustments have little impact on leverage measurements.

In summary, the data depicts a company that experienced a contraction in total assets during the initial years, accompanied by a marked reduction in financial leverage, which may indicate deleveraging or repayments of liabilities. Concurrently, the continuous growth in stockholders’ equity points to an improving financial strength or profitability. The subsequent asset growth alongside a modest increase in leverage from 2022 through 2024 suggests a possible strategic asset expansion financed by a balanced combination of debt and equity. Inventory LIFO reserve adjustments have minimal effect on overall financial metrics, indicating inventory valuation methods have a limited influence on the company’s reported financial position.

The financial data reveals significant fluctuations in both net income and equity metrics over the five-year period under review. The trends in reported and adjusted figures closely mirror each other, suggesting consistent adjustments for inventory LIFO reserves without materially altering overall financial interpretations.

Net Income (Loss) Trends

In 2020, the company experienced a substantial net loss exceeding $14.8 billion, indicative of a severe downturn or extraordinary expense impact during that year. This loss was sharp and adversely affected profitability metrics.

From 2021 onwards, profitability improved markedly. In 2021, the company shifted to net income gains around $2.3 billion, followed by a substantial increase in 2022 to over $13.3 billion. This sharp rebound reflects a significant recovery or favorable market conditions during that period.

However, in the subsequent two years, 2023 and 2024, net income declined again to approximately $4.7 billion and $3.0 billion respectively, suggesting a moderation in earnings despite remaining positive. The decline indicates possibly less favorable operating conditions, pricing pressures, or strategic changes affecting earnings capacity.

Stockholders’ Equity

Equity shows a steady upward trend throughout the five-year span, rising from approximately $18.6 billion in 2020 to $34.2 billion in 2024 (based on adjusted figures). This growth signals an overall strengthening of the company's net asset base.

The increases in equity persist even in years when net income declined, highlighting retained earnings accumulation, capital issuance, or asset revaluation effects supporting the balance sheet's robustness.

Return on Equity (ROE)

ROE reflects the profitability relative to equity investment. In 2020, the ROE was deeply negative at nearly -80%, consistent with the large net loss recorded that year.

Following this, ROE improved significantly to over 11% in 2021 and then surged to above 44% in 2022, indicating exceptionally strong returns during the recovery period.

In 2023 and 2024, ROE moderated to approximately 15.5% and 9%, respectively, consistent with the observed net income reduction but remaining positive and indicating ongoing profitability relative to equity capital.

Comparison of Reported vs. Adjusted Figures

Reported and adjusted results are closely aligned across all metrics, with minimal differences noted. This suggests that the inventory LIFO reserve adjustments have a limited impact on overall financial performance trends and profitability conclusions for the periods analyzed.

In summary, the data indicates a company that underwent substantial financial strain in 2020, followed by a pronounced recovery phase peaking in 2022. Despite a subsequent decline in earnings and returns, the overall equity base strengthened consistently. The adjustments for inventory accounting methods do not significantly alter the analysis or the observed financial trajectory.

Net Income Trends

The reported net income attributable to the company experienced a significant negative value in 2020, recording a loss of approximately $14.8 billion. This was followed by a considerable recovery in 2021, with net income turning positive at around $2.3 billion. The upward trend continued dramatically in 2022, reaching a peak of approximately $13.3 billion. However, in 2023 and 2024, net income declined substantially to $4.7 billion and $3.1 billion respectively. The adjusted net income figures closely mirror these patterns, showing only minor variations but the same overall trends.

Total Asset Trends

Reported total assets showed a downward trend from approximately $80.1 billion in 2020 to $72.6 billion in 2022. After this decline, assets increased slightly in 2023 to about $74.0 billion and then more substantially in 2024 to approximately $85.4 billion. The adjusted total assets generally align with the reported figures, exhibiting consistent marginal upward adjustments across all periods considered.

Return on Assets (ROA) Analysis

Reported ROA was negative in 2020 at -18.52%, indicating a loss relative to the asset base. This shifted positively in 2021 to just over 3%, followed by a sharp increase in 2022 where ROA peaked near 18.3%. Thereafter, ROA decreased notably to about 6.3% in 2023 and further declined to slightly above 3.5% in 2024. Adjusted ROA values track closely with reported ROA, reflecting minor adjustments but the same overall directional changes.

Insights and Patterns

The data reveals a strong recovery in profitability following the significant loss in 2020, culminating in a peak operating performance in 2022. However, the return and net income figures declined sharply after this peak, suggesting challenges in sustaining the high profitability levels achieved that year. Total assets contracted initially before expanding again by 2024, reflecting possible asset sales or revaluations during the downturn and subsequent investment or acquisition activity later on. Adjustments made for LIFO reserve appear to have minimal impact on the overall financial trends, indicating that inventory accounting did not significantly distort the reported financial metrics.