Occidental Petroleum Corp. (NYSE:OXY)

The analysis of the financial data over the five-year period reveals several notable trends related to asset utilization, liquidity, leverage, and profitability.

Asset Turnover

Both reported and adjusted total asset turnover improved significantly from 0.22 in 2020 to a peak of 0.50 in 2022, indicating enhanced efficiency in generating revenue from assets during this period. However, this metric declined afterwards to 0.31 by 2024, suggesting a reduction in asset utilization efficiency in recent years.

Current Ratio

Liquidity, as measured by the current ratio, showed an increase from 1.07 in 2020 to around 1.23 in 2021, implying strengthening short-term financial stability. This was followed by a gradual decrease to below 1.0 in 2023 and 2024, with values of 0.92 and 0.95 respectively, signaling a tighter short-term liquidity position.

Debt to Equity Ratio

The reported debt to equity ratio declined markedly from 1.95 in 2020 to 0.66 in 2022, reflecting a substantial deleveraging effort. This trend slightly reversed in subsequent years, rising modestly to 0.76 by 2024, which may indicate a moderate increase in reliance on debt financing towards the end of the period.

Debt to Capital Ratio

Similarly, debt to capital ratios decreased from 0.66 in 2020 to a low of 0.39 in 2023, demonstrating reduced financial leverage and potentially improved creditworthiness. A slight uptick to 0.43 was observed in 2024, consistent with the debt to equity trend.

Financial Leverage

Financial leverage decreased steadily from reported values of 4.31 in 2020 to around 2.41-2.50 in the 2022-2024 period, indicating a lower degree of reliance on borrowed funds relative to equity. Adjusted leverage followed a comparable pattern.

Profitability Metrics

Profit margins and returns showed significant volatility. The reported net profit margin, initially deeply negative at -83.28% in 2020, turned positive and peaked at 36.32% in 2022. However, it declined thereafter to 11.43% by 2024. A similar pattern with adjusted net profit margins was observed though the magnitude was less extreme. Return on equity (ROE) and return on assets (ROA) followed analogous trajectories, with both metrics recovering strongly after 2020 losses, peaking in 2022, then decreasing steadily through 2024. This suggests that profitability substantially improved after 2020 but faced challenges or lower margins in the following years.

In summary, the data indicate that after a difficult financial situation in 2020, there was a marked improvement in asset efficiency, profitability, and leverage by 2022. Nevertheless, some deterioration in asset turnover, liquidity, and profitability metrics occurred in 2023 and 2024, although leverage remained at a more conservative level compared to earlier years. The trends imply fluctuating operational performance and financial conditions with a stronger balance sheet but increased pressure on profitability and liquidity in the most recent periods.

Net Sales

Net sales showed a marked increase from 17,809 million USD in 2020 to a peak of 36,634 million USD in 2022, reflecting significant growth over these years. However, the following years experienced declines, with net sales falling to 28,257 million USD in 2023 and further down to 26,725 million USD in 2024. This trajectory indicates a period of robust expansion followed by contraction in sales revenue.

Total Assets

Total assets decreased from 80,064 million USD in 2020 to 72,609 million USD in 2022, indicating a reduction in asset base during these years. Subsequently, total assets recovered moderately to 74,008 million USD in 2023 and increased more substantially to 85,445 million USD in 2024, surpassing the initial value recorded in 2020. This suggests a strategic asset accumulation or revaluation in the latest periods.

Reported Total Asset Turnover

The reported total asset turnover ratio improved significantly from 0.22 in 2020 to a peak of 0.50 in 2022, signaling heightened efficiency in generating sales from assets during this period. However, the ratio decreased in subsequent years to 0.38 in 2023 and further to 0.31 in 2024, indicating a decline in asset utilization efficiency despite the recovery and growth in the asset base.

Adjusted Total Assets

The adjusted total assets closely follow the pattern of total assets, with a decline from 80,061 million USD in 2020 to 72,737 million USD in 2022, then a gradual increase to 74,119 million USD in 2023 and 85,542 million USD in 2024. This consistency suggests that adjustments made do not materially alter the overall asset trend observed.

Adjusted Total Asset Turnover

The adjusted total asset turnover ratio mirrors the pattern of the reported ratio: rising sharply from 0.22 in 2020 to 0.50 in 2022, then declining to 0.38 in 2023 and 0.31 in 2024. The parallel movement reinforces the observed changes in asset efficiency and implies that adjustments have limited impact on turnover assessment.

The financial data reveals distinct trends in the liquidity position over the observed periods. Current assets displayed an initial increase from 8,819 million US dollars in 2020 to a peak of 10,211 million in 2021, followed by a decline to 8,375 million in 2023, and a slight recovery to 9,070 million in 2024. Conversely, current liabilities exhibited a more fluctuating but generally upward trend, moving from 8,223 million in 2020 to 9,521 million in 2024, with a notable dip in 2022.

Reported Current Ratio

This metric improved from 1.07 in 2020 to 1.23 in 2021, indicating enhanced short-term liquidity. It then declined steadily to 0.92 in 2023, falling below the critical threshold of 1, before marginally improving to 0.95 in 2024. This suggests reduced ability to cover current liabilities with current assets in the latter years.

Adjusted Current Assets and Ratio

Adjusted current assets followed a pattern similar to reported current assets, increasing from 8,872 million in 2020 to 10,345 million in 2021, dipping thereafter, and recovering slightly by 2024. The adjusted current ratio mirrored this trend, rising from 1.08 in 2020 to 1.24 in 2021, then decreasing below 1 in 2023 (0.93) but improving to 0.96 in 2024. These adjusted figures reinforce the observations derived from reported data.

Overall, the liquidity position improved markedly in 2021 before deteriorating through 2023 and showing modest recovery in 2024. The current ratios falling below 1 in the recent years may signal potential short-term liquidity challenges, warranting monitoring and possible strategic measures to bolster working capital.

The financial data reveals several noteworthy trends in the company's capital structure over the five-year period ending in 2024.

Total Debt and Adjusted Total Debt

Both total debt and adjusted total debt exhibited a declining trend from 2020 through 2023, with total debt decreasing from approximately $36.2 billion to $19.7 billion, and adjusted total debt reducing from around $37.3 billion to $20.9 billion. However, in 2024, both measures reversed course and increased significantly, reaching about $26.1 billion and $27.1 billion, respectively. This pattern suggests a substantial reduction in leverage in the earlier years followed by renewed debt accumulation in the most recent period.

Stockholders’ Equity and Adjusted Total Equity

Stockholders’ equity consistently increased each year, rising from roughly $18.6 billion in 2020 to $34.2 billion by 2024. Adjusted total equity showed a similar upward trajectory, increasing from $25.7 billion to close to $40.0 billion over the same span. The steady growth in equity indicates strengthening net asset value and possibly accumulation of retained earnings or capital injections.

Debt to Equity Ratios

The reported debt to equity ratio decreased markedly from 1.95 in 2020 to a low of 0.65 in 2023, reflecting a strong deleveraging trend. In 2024, however, the ratio rose to 0.76, signaling an increase in leverage albeit still much lower than the initial level. The adjusted debt to equity ratio follows the same pattern, dropping from 1.45 in 2020 to 0.58 in 2023, then increasing slightly to 0.68 in 2024. The decline in these ratios over most of the period suggests improved financial stability and reduced risk, while the uptick in the last year warrants attention.

Overall, the data portrays a strategic deleveraging phase with enhanced equity values over the first four years, followed by a partial reversal of debt reduction in 2024. This shift may reflect changes in capital strategy, investment needs, or market conditions that prompted the company to increase indebtedness after a period of strengthening its balance sheet.

The financial data exhibits notable trends in the company's debt and capital structure over the five-year period. Observing the total debt levels, there is a pronounced decrease from 2020 through 2023, followed by an increase in 2024. Specifically, total debt declined from 36,185 million US dollars at the end of 2020 to 19,738 million US dollars by the end of 2023, representing a substantial reduction in leverage. However, in 2024, total debt rose to 26,116 million US dollars, indicating a reversal of the prior deleveraging trend.

Total capital experienced a slight decline during the initial years, dropping from 54,758 million US dollars in 2020 to approximately 49,920 million US dollars in 2022, then remaining relatively stable through 2023. A notable increase occurred in 2024, when total capital surged to 60,275 million US dollars, suggesting capital expansion or infusion during that year.

The reported debt-to-capital ratio mirrors these trends, showing a marked improvement from 0.66 in 2020 to 0.39 by 2023, indicating a strengthening capital position and potentially reduced financial risk. However, this ratio increased to 0.43 in 2024, reflecting the rise in debt levels relative to capital in that year.

The adjusted figures, which likely reconcile certain accounting treatments or valuation adjustments, reinforce these observations. Adjusted total debt declined from 37,299 million US dollars in 2020 to 20,911 million US dollars in 2023, before increasing to 27,104 million US dollars in 2024. Similarly, adjusted total capital decreased from 62,982 million US dollars in 2020 to 56,490 million US dollars in 2022, then steadily increased to 67,075 million US dollars by 2024.

Consequently, the adjusted debt-to-capital ratio improved significantly from 0.59 in 2020 to 0.37 in both 2022 and 2023, implying enhanced financial leverage and capitalization during those years, followed by a slight rise to 0.40 in 2024, consistent with increased debt levels.

Overall, the financial data suggests a period of deleveraging and capital stabilization from 2020 to 2023, fostering improved debt ratios and potentially reducing financial risk. The increase in both debt and capital in 2024 highlights a strategic shift, possibly reflecting new financing activities or investments increasing the company's leverage. The adjusted and reported metrics consistently portray the same directional trends, indicating reliability in the analysis of the company's evolving capital structure.

Total assets

The total assets showed a declining trend from 80,064 million USD at the end of 2020 to 72,609 million USD by the end of 2022. However, a moderate recovery occurred in 2023, increasing slightly to 74,008 million USD, followed by a more substantial rise to 85,445 million USD in 2024, surpassing the 2020 level.

Stockholders’ equity

Stockholders’ equity consistently increased over the five-year period, rising from 18,573 million USD in 2020 to 34,159 million USD in 2024. The growth was particularly notable between 2021 and 2022, and then continued at a steadier pace through 2024, indicating strengthening equity position.

Reported financial leverage

Reported financial leverage declined significantly from 4.31 in 2020 to 2.41 in 2022, indicating a substantial reduction in leverage. From 2022 onwards, it stabilized around 2.45 to 2.50, suggesting that the company maintained a lower level of reported leverage after 2022.

Adjusted total assets

Adjusted total assets mirrored the trend of the reported total assets, starting at 80,061 million USD in 2020 and decreasing to 72,737 million USD in 2022. They then increased to 74,119 million USD in 2023 and further to 85,542 million USD in 2024, following a similar recovery and growth pattern as the reported total assets.

Adjusted total equity

The adjusted total equity experienced a consistent upward trajectory across the period, beginning at 25,683 million USD in 2020 and climbing steadily to 39,971 million USD by 2024. This reflects a robust improvement in the company’s adjusted equity base.

Adjusted financial leverage

Adjusted financial leverage decreased from 3.12 in 2020 to 2.04 in 2022, indicating a lowering of leverage on an adjusted basis. After 2022, there was a slight increase from 2.04 to 2.14 by the end of 2024, but the leverage remained significantly lower than the 2020 level, suggesting improved financial stability.

Net Income (Loss) Attributable to Occidental

There was a significant improvement from a substantial loss of US$14,831 million in 2020 to positive net income in subsequent years. The company reported profits of US$2,322 million in 2021, which increased sharply to US$13,304 million in 2022. However, net income decreased notably in 2023 and 2024 to US$4,696 million and US$3,056 million respectively, indicating some volatility after the peak in 2022.

Net Sales

Net sales displayed an increasing trend from 2020 to 2022, rising from US$17,809 million to US$36,634 million. However, sales declined thereafter, falling to US$28,257 million in 2023 and further to US$26,725 million in 2024. This downward trend in sales after 2022 may reflect changes in market conditions, pricing, or production volumes.

Reported Net Profit Margin

The reported net profit margin showed a dramatic recovery from a highly negative margin of -83.28% in 2020 to positive territory in 2021 at 8.95%. The margin peaked significantly at 36.32% in 2022, corresponding with the peak in net income. Following 2022, the profit margin declined to 16.62% in 2023 and further to 11.43% in 2024, mirroring the decline in net income. This suggests profits became less efficient relative to sales after 2022 despite remaining positive.

Adjusted Net Income (Loss)

Adjusted net income followed a pattern similar to net income, with an initial large loss of US$16,123 million in 2020 turning into profits in subsequent years. Adjusted income rose to US$2,997 million in 2021 and to US$12,087 million in 2022 before declining to US$4,812 million in 2023 and US$2,319 million in 2024. The adjusted figures indicate that underlying operational profitability improved greatly post-2020 but weakened after the 2022 peak.

Adjusted Net Profit Margin

Adjusted net profit margin rose sharply from -90.53% in 2020 to 11.55% in 2021, then surged to 32.99% in 2022. Similar to other profitability measures, this margin receded to 17.03% in 2023 and further declined to 8.68% in 2024. The margin's decline after 2022 suggests that the firm’s adjusted profitability relative to sales diminished but remained positive, indicating ongoing operational challenges or softer market conditions.

The financial data reflects notable fluctuations and trends in profitability and equity over the five-year period.

Net Income (Loss) Attributable to Occidental

The company experienced a substantial loss of $14,831 million in 2020, followed by a recovery to a positive net income of $2,322 million in 2021. This upward trend continued sharply in 2022, reaching $13,304 million. However, in 2023 and 2024, net income decreased substantially to $4,696 million and $3,056 million respectively, indicating a decline in profitability after the peak in 2022.

Stockholders’ Equity

Stockholders’ equity showed consistent growth throughout the period, starting from $18,573 million in 2020 and increasing steadily each year, reaching $34,159 million by 2024. This gradual increase suggests improving or sustained capital base and possibly retained earnings accumulation despite net income fluctuations.

Reported Return on Equity (ROE)

Reported ROE mirrored the net income trends, starting with a negative figure of -79.85% in 2020, which reflects the large loss in that year. It then improved sharply to 11.42% in 2021 and peaked at 44.22% in 2022. Following this peak, ROE decreased significantly to 15.52% in 2023 and further to 8.95% in 2024, indicating reduced efficiency in generating profit from shareholders’ equity after 2022.

Adjusted Net Income (Loss)

The adjusted net income followed a pattern similar to the unadjusted net income, with a significant loss of $16,123 million in 2020. This improved to a positive adjusted net income of $2,997 million in 2021 and increased further to $12,087 million in 2022. Thereafter, a decline occurred with adjusted net income dropping to $4,812 million in 2023 and $2,319 million in 2024, indicating reduced operational profitability or adjustments affecting profitability in the later years.

Adjusted Total Equity

Adjusted total equity increased each year, beginning at $25,683 million in 2020 and reaching $39,971 million by 2024, suggesting sustained capital growth after adjustments. This growth trend is consistent with stockholders’ equity but on a higher base, possibly reflecting more comprehensive equity measurement.

Adjusted Return on Equity (ROE)

Adjusted ROE also exhibited substantial volatility, starting at -62.78% in 2020, improving to 10.91% in 2021, and peaking at 33.83% in 2022. Similar to the reported ROE, it declined significantly to 13.28% in 2023 and 5.8% in 2024, reflecting reduced adjusted profitability relative to adjusted equity in the latter years.

In summary, the data indicates a strong recovery and peak in profitability and returns on equity in 2022 after significant losses in 2020. However, both profitability and return ratios declined markedly in the final two years. Meanwhile, equity levels, both reported and adjusted, showed steady growth throughout the period, which might provide a solid foundation for future financial stability despite the recent decline in returns.

An analysis of the financial performance over the given periods reveals distinct patterns in profitability and asset base metrics.

Net Income and Adjusted Net Income

Both net income and adjusted net income demonstrate a significant recovery after a substantial loss in 2020. Beginning with large negative values in 2020 (net loss exceeding $14.8 billion and adjusted loss over $16.1 billion), there was a marked transition to positive earnings in subsequent years. Net income rose sharply in 2021 and peaked in 2022 at approximately $13.3 billion. However, this peak was followed by a downward trend, with both net income and adjusted net income decreasing notably in 2023 and further into 2024, reaching $3.1 billion and $2.3 billion, respectively, by the end of that year.

Total Assets and Adjusted Total Assets

The total assets exhibited a declining trend from 2020 through 2022, falling from around $80 billion to approximately $72.6 billion. This decline ceased in 2023, with a slight increase observed, and continued growth into 2024, culminating in assets exceeding $85.4 billion. Adjusted total assets followed a very similar trajectory, indicating consistency between reported and adjusted measures.

Return on Assets (ROA) and Adjusted ROA

ROA metrics corroborate the profitability trends. Both reported and adjusted ROA were deeply negative in 2020, reflecting losses relative to asset levels. In 2021 and 2022, both measures turned positive and increased substantially, peaking in 2022 at 18.32% for reported ROA and 16.62% for adjusted ROA. Subsequently, ROA figures declined sharply in 2023 and further in 2024, with reported ROA decreasing to 3.58% and adjusted ROA to 2.71%. This downward trend aligns with the decline seen in net income during these years.

Overall Observations

The data reveal a period of significant volatility in profitability, with losses in 2020 transitioning to strong earnings in 2021 and 2022, followed by a decline in subsequent years. The asset base contracted initially but recovered and grew by 2024. The correspondence between reported and adjusted figures throughout the data suggests stable accounting adjustments with minor differences in performance assessment. The declining profitability ratios despite growing asset levels in the latter years may indicate increased capital intensity or operational challenges affecting return efficiency.