Stock Analysis on Net
Stock Analysis on Net
Microsoft Excel LibreOffice Calc

Occidental Petroleum Corp. (NYSE:OXY)

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Economic Value Added (EVA)

Advanced level

EVA is registered trademark of Stern Stewart.

Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.


Economic Profit

Occidental Petroleum Corp., economic profit calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net operating profit after taxes (NOPAT)1
Cost of capital2
Invested capital3
 
Economic profit4

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

1 NOPAT. See details »

2 Cost of capital. See details »

3 Invested capital. See details »

4 2018 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= × =

Item Description The company
Economic profit Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital. Occidental Petroleum Corp.’s economic profit increased from 2016 to 2017 and from 2017 to 2018.

Net Operating Profit after Taxes (NOPAT)

Occidental Petroleum Corp., NOPAT calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Net income (loss) attributable to common stock
Deferred income tax expense (benefit)1
Increase (decrease) in allowance for doubtful accounts2
Increase (decrease) in LIFO reserve3
Increase (decrease) in equity equivalents4
Interest and debt expense, net
Interest expense, operating lease liability5
Adjusted interest and debt expense, net
Tax benefit of interest and debt expense, net6
Adjusted interest and debt expense, net, after taxes7
(Gain) loss on marketable securities
Investment income, before taxes
Tax expense (benefit) of investment income8
Investment income, after taxes9
(Income) loss from discontinued operations, net of tax10
Net income (loss) attributable to noncontrolling interest
Net operating profit after taxes (NOPAT)

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

1 Elimination of deferred tax expense. See details »

2 Addition of increase (decrease) in allowance for doubtful accounts.

3 Addition of increase (decrease) in LIFO reserve. See details »

4 Addition of increase (decrease) in equity equivalents to net income (loss) attributable to common stock.

5 2018 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= × =

6 2018 Calculation
Tax benefit of interest and debt expense, net = Adjusted interest and debt expense, net × Statutory income tax rate
= × 21.00% =

7 Addition of after taxes interest expense to net income (loss) attributable to common stock.

8 2018 Calculation
Tax expense (benefit) of investment income = Investment income, before tax × Statutory income tax rate
= × 21.00% =

9 Elimination of after taxes investment income.

10 Elimination of discontinued operations.

Item Description The company
NOPAT Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income. Occidental Petroleum Corp.’s NOPAT increased from 2016 to 2017 and from 2017 to 2018.

Cash Operating Taxes

Occidental Petroleum Corp., cash operating taxes calculation

US$ in millions

Microsoft Excel LibreOffice Calc
12 months ended: Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Provisions (credits) for domestic and foreign income taxes on continuing operations
Less: Deferred income tax expense (benefit)
Add: Tax savings from interest and debt expense, net
Less: Tax imposed on investment income
Cash operating taxes

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

Item Description The company
Cash operating taxes Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction. Occidental Petroleum Corp.’s cash operating taxes increased from 2016 to 2017 and from 2017 to 2018.

Invested Capital

Occidental Petroleum Corp., invested capital calculation (financing approach)

US$ in millions

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Current maturities of long-term debt
Long-term debt, net, excluding current maturities
Operating lease liability1
Total reported debt & leases
Stockholders’ equity
Net deferred tax (assets) liabilities2
Allowance for doubtful accounts3
LIFO reserve4
Equity equivalents5
Accumulated other comprehensive (income) loss, net of tax6
Adjusted stockholders’ equity
Available for sale investment in California Resources stock7
Invested capital

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

1 Addition of capitalized operating leases.

2 Elimination of deferred taxes from assets and liabilities. See details »

3 Addition of allowance for doubtful accounts receivable.

4 Addition of LIFO reserve. See details »

5 Addition of equity equivalents to stockholders’ equity.

6 Removal of accumulated other comprehensive income.

7 Subtraction of available for sale investment in California Resources stock.

Item Description The company
Invested capital Capital is an approximation of the economic book value of all cash invested in going-concern business activities. Occidental Petroleum Corp.’s invested capital decreased from 2016 to 2017 but then increased from 2017 to 2018 not reaching 2016 level.

Cost of Capital

Occidental Petroleum Corp., cost of capital calculations

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt, including current maturities3 ÷ = × × (1 – 21.00%) =
Operating lease liability4 ÷ = × × (1 – 21.00%) =
Total:

Based on: 10-K (filing date: 2019-02-21).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, including current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt, including current maturities3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2018-02-23).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, including current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt, including current maturities3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2017-02-23).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, including current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt, including current maturities3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2016-02-26).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, including current maturities. See details »

4 Operating lease liability. See details »

Capital (fair value)1 Weights Cost of capital
Equity2 ÷ = × =
Long-term debt, including current maturities3 ÷ = × × (1 – 35.00%) =
Operating lease liability4 ÷ = × × (1 – 35.00%) =
Total:

Based on: 10-K (filing date: 2015-02-23).

1 US$ in millions

2 Equity. See details »

3 Long-term debt, including current maturities. See details »

4 Operating lease liability. See details »


Economic Spread Ratio

Occidental Petroleum Corp., economic spread ratio calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Economic profit1
Invested capital2
Performance Ratio
Economic spread ratio3
Benchmarks
Economic Spread Ratio, Competitors4
Chevron Corp.
Exxon Mobil Corp.

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

1 Economic profit. See details »

2 Invested capital. See details »

3 2018 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × ÷ =

4 Click competitor name to see calculations.

Performance ratio Description The company
Economic spread ratio The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital. Occidental Petroleum Corp.’s economic spread ratio improved from 2016 to 2017 and from 2017 to 2018.

Economic Profit Margin

Occidental Petroleum Corp., economic profit margin calculation, comparison to benchmarks

Microsoft Excel LibreOffice Calc
Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015 Dec 31, 2014
Selected Financial Data (US$ in millions)
Economic profit1
Net sales
Performance Ratio
Economic profit margin2
Benchmarks
Economic Profit Margin, Competitors3
Chevron Corp.
Exxon Mobil Corp.

Based on: 10-K (filing date: 2019-02-21), 10-K (filing date: 2018-02-23), 10-K (filing date: 2017-02-23), 10-K (filing date: 2016-02-26), 10-K (filing date: 2015-02-23).

1 Economic profit. See details »

2 2018 Calculation
Economic profit margin = 100 × Economic profit ÷ Net sales
= 100 × ÷ =

3 Click competitor name to see calculations.

Performance ratio Description The company
Economic profit margin The ratio of economic profit to sales. It is the company’s profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin. Occidental Petroleum Corp.’s economic profit margin improved from 2016 to 2017 and from 2017 to 2018.