Occidental Petroleum Corp. (NYSE:OXY)

Return on Assets (ROA)

The Return on Assets exhibited a significant negative performance in early 2020, with values reaching approximately -18.52% in the fourth quarter of 2020. This negative trend eased steadily over the subsequent quarters, moving toward positive territory by the first quarter of 2021. The ROA improved consistently throughout 2021 and 2022, reaching a peak near 18.32% in the first quarter of 2023. After this peak, the ROA demonstrated a gradual decline, stabilizing around 3.5% to 6% through the end of 2025. This indicates an initial recovery followed by a moderation to more sustainable returns on assets.

Financial Leverage

The Financial Leverage ratio showed an increasing trend starting at 3.25 in the first quarter of 2020 and peaking at 4.38 by the second quarter of 2021. From the third quarter of 2021 onward, there was a clear downward trend in leverage, declining steadily to approximately 2.41–2.5 and remaining relatively stable at this lower level through to the first quarter of 2025. This suggests a deleveraging trend following a period of increased leverage, indicating improved balance sheet management and potentially lower financial risk.

Return on Equity (ROE)

The ROE started at highly negative values towards the end of 2020, with a low near -79.85%. It showed marked improvement over the subsequent quarters, turning positive in 2021 and continuing to increase rapidly, peaking around 44.97% in the fourth quarter of 2022. After hitting this peak, ROE declined gradually through 2023 and stabilized in the range of approximately 8.9% to 15.5% from 2024 to early 2025. This pattern mirrors the recovery trend in ROA but indicates a particularly strong recovery in equity profitability, likely influenced by the reduction in leverage and operational improvements.

Net Profit Margin

The net profit margin demonstrated a significant negative performance during 2020, reaching a low of -83.28% in the fourth quarter. A gradual recovery began in early 2021, turning positive by the first quarter with 8.95%, and peaking around 36.32% at the end of 2022. However, from 2023 onward, the margin shows a declining trend, decreasing steadily to approximately 11.27% by the first quarter of 2025, indicating reduced profitability over recent periods.

Asset Turnover

Asset turnover values started from 0.22 in the first quarter of 2020 and rose steadily through 2021 and 2022, reaching a peak of 0.5 by the end of 2022. Post-peak, this ratio gradually decreased, hitting around 0.31-0.32 by early 2025. The trend suggests improving efficiency in asset utilization through 2022, followed by a moderate decline in the subsequent periods.

Financial Leverage

Financial leverage began the period at 3.25, rising to a peak of 4.38 in mid-2021. Following this peak, leverage declined consistently, reaching a low near 2.41 by the end of 2022. From 2023 to early 2025, financial leverage remained relatively stable around 2.4 to 2.5, indicating a reduction in reliance on debt compared to earlier years and a stabilization in capital structure leverage.

Return on Equity (ROE)

ROE mirrored the net profit margin trend, with severe negative returns during 2020, bottoming near -79.85% in late 2020. Recovery initiated in 2021, with ROE turning positive and peaking at approximately 44.97% by the end of 2022. A decline phase followed, with ROE falling steadily to about 8.94% by the first quarter of 2025, signaling weakening equity returns in recent quarters.

The financial ratios over the observed periods demonstrate notable fluctuations and trends indicating the company’s evolving operational and financial performance.

Tax Burden

The tax burden ratio exhibits a slight upward trend starting from 0.72 in March 2022, peaking around 1.14 in June 2022, and then stabilizing in the range of approximately 0.71 to 0.75 through March 2025. This suggests some variability in the effective tax impact on earnings, with increased tax effectiveness in mid-2022 followed by stabilization at a moderately high tax level.

Interest Burden

The interest burden ratio shows a marked improvement from a negative value of -0.11 in December 2020 to a positive ratio of approximately 0.78 by March 2025. This indicates a significant reduction in interest expenses relative to EBIT over time, reflecting better interest coverage and improved financial health concerning debt servicing.

EBIT Margin

EBIT margin reflects a recovery from deeply negative margins in 2020, starting from -87.48% in September 2020 and improving steadily to positive levels by late 2020. The margin increases substantially through 2021 and 2022, peaking around 41.35% in December 2022. From 2023 onward, the EBIT margin trends downward gradually to just above 20% by March 2025. This pattern indicates strong operational recovery and profitability following earlier losses, with a potential margin normalization or pressure in recent quarters.

Asset Turnover

Asset turnover ratio steadily increased from 0.22 in December 2020 to a peak of 0.50 in December 2022, corresponding with periods of higher EBIT margin. Post-2022, asset turnover declines modestly to about 0.31-0.32 by early 2025. This suggests that asset utilization efficiency improved significantly during the recovery phase but experienced some reduction more recently, possibly reflecting changes in asset base growth or sales efficiency.

Financial Leverage

Financial leverage initially rose from 3.25 in March 2020 to a high of 4.38 around mid-2021, then decreased continuously to a stable range near 2.4-2.5 from late 2022 through early 2025. This decline demonstrates a deliberate effort to reduce reliance on debt relative to equity, enhancing capital structure stability.

Return on Equity (ROE)

ROE mirrors the EBIT margin trend, shifting from significant negative territory in 2020 (-79.85% in September) to a peak of approximately 44.97% in December 2022. Subsequently, ROE declines steadily, reaching around 8.94% by March 2025. This trajectory reflects a strong recovery in shareholder returns followed by a deceleration, which may correlate with reduced profit margins and asset turnover in recent periods.

Overall, the data indicate a marked improvement in operational profitability and financial health from 2020 through 2022, followed by a period of modest profit margin compression and asset utilization decline. The reduction in financial leverage and improvement in interest burden further support a stronger balance sheet position. The slight decreases in ROE and EBIT margin in the most recent periods suggest a more cautious outlook or pressures impacting profitability.

The financial ratios display notable variations and trends over the analyzed periods. The net profit margin initially experienced steep negative values, reaching a low point around March 31, 2020, with a margin of -83.28%. This negative trend persisted but showed continuous improvement, moving towards break-even in late 2021. Starting from early 2022, the net profit margin turned positive, increasing significantly to over 36% by December 31, 2022. However, after this peak, there was a gradual decline, with the margin tapering down to just above 11% by the end of the reported period in March 31, 2025.

Regarding asset turnover, there is no data available until the first quarter of 2021, when the ratio stood at approximately 0.22. The ratio then exhibited an upward trajectory, peaking at 0.5 in late 2022 and early 2023. Following the peak, asset turnover showed a steady decline, descending to around 0.31 by the first quarter of 2025. This suggests a decrease in efficiency in utilizing assets to generate revenue after a period of improved performance.

The return on assets (ROA) ratios mirror the trend in net profit margin, initially registering deeply negative figures around -18.52% at the beginning of the dataset. ROA improved steadily over subsequent periods, crossing into positive territory by early 2021. ROA reached its highest point of approximately 18.32% at the end of 2022. After this peak, ROA experienced a decline, settling at a lower but positive rate of roughly 3.65% by early 2025. This declining trend after a peak denotes reduced profitability relative to the asset base in recent quarters.

Summary of Financial Ratio Trends:

Net Profit Margin:

Shifted from significant negative values in 2020 to robust profitability in 2022, followed by a decline through to 2025.

Asset Turnover:

Improved steadily from early 2021, peaked in late 2022, then declined through the remainder of the series, indicating fluctuations in asset utilization efficiency.

Return on Assets (ROA):

Mirrored net profit margin improvements, moving from negative to positive, peaking in 2022 before tapering off by early 2025.

Tax Burden

The tax burden ratio exhibits some variability over the observed quarters. Starting from a level of 0.72 around March 31, 2022, it spikes to a peak of approximately 1.14 by June 30, 2022, indicating a temporary increase in the effective tax rate relative to pre-tax income. After this peak, the ratio stabilizes and slightly declines, fluctuating between 0.71 and 0.75 in subsequent periods through March 31, 2025. This suggests a relatively stabilized tax environment or consistent tax expense relative to earnings in recent quarters.

Interest Burden

The interest burden ratio shows dramatic improvement starting from a highly negative value of -0.11 in December 31, 2020, which indicates a period of significant financial distress or losses before interest expense. Following this, the ratio moves positively into a range between 0.67 and 0.93 from March 31, 2021, onward, reflecting improved operational performance and reduced negative impact from interest expenses. The slight downward trend observed toward later periods, ending near 0.78 by March 31, 2025, may indicate some increase in interest expense or other financial costs relative to earnings before interest and taxes.

EBIT Margin

The EBIT margin depicts a strong recovery trajectory over the analyzed timeframe. Beginning with deeply negative margins of -87.48% and -82.65% in the early quarters of 2020, the margin improves significantly into positive territory by late 2020 and early 2021. It climbs steadily, reaching a high point above 40% at year-end 2022, reflecting strong profitability from core operations during this period. Subsequently, EBIT margin gradually declines to around 20% by March 31, 2025, which still represents positive earnings but indicates a moderation in profitability compared to the peak periods.

Asset Turnover

The asset turnover ratio shows a general increasing trend from 0.22 in the first quarter of 2020 to 0.50 by the end of 2022, suggesting improved efficiency in utilizing assets to generate revenues. After reaching this peak, the ratio declines gradually to approximately 0.31 by March 31, 2025, indicating a reduction in asset utilization efficiency or relatively slower revenue growth compared to asset base expansion in the latter periods.

Return on Assets (ROA)

ROA follows a pattern consistent with other profitability metrics, starting with deeply negative returns of -18.52% and -16.34% in early 2020. It improves markedly into positive territory by late 2020 and continues to rise, peaking near 18.32% at the end of 2022. After this peak, ROA declines gradually over subsequent quarters, stabilizing in the 3.5% to 6% range by early 2025. This reflects a recovering but now moderated ability to generate net income from asset investments following the initial crisis period.

Tax Burden

The tax burden ratio data available from March 31, 2022, demonstrates relative stability with minor fluctuations. It starts at 0.72 in the first quarter of 2022, peaks at 1.14 in the second quarter of 2022, and subsequently settles between 0.71 and 0.75 through to the first quarter of 2025. This suggests a consistent effective tax rate relative to earnings in recent periods.

Interest Burden

The interest burden ratio shows improvement from a negative value of -0.11 at December 31, 2020, indicating significant interest expense or financial distress, to positive and stable values thereafter. From March 31, 2021, the ratio improves sharply to 0.67, reaching a range between 0.78 and 0.93 through the subsequent periods until March 31, 2025. This trend points to reduced interest expenses relative to EBIT or improved operational earnings coverage of interest costs over time.

EBIT Margin

The EBIT margin exhibits a dramatic turnaround beginning in late 2020. It starts with deeply negative margins of -87.48% and -82.65% in mid and late 2020 respectively, then moves toward a slight negative margin of -19.51% by the first quarter of 2021. By mid-2021, EBIT margin turns positive at 6.67%, improving substantially through 2021 and reaching a peak of approximately 41.35% at the end of 2021. Throughout 2022 and beyond, it stabilizes in the range of 20.22% to around 32.1%, with a downward trend observed toward 20.22% by March 31, 2025. This indicates a significant recovery in operating profitability after an initial period of negative performance, followed by stabilization at healthy margins.

Net Profit Margin

Net profit margin follows a similar pattern to the EBIT margin, reflecting initial deep losses of -83.28% and -78.62% in mid and late 2020, improving to -24.23% and -1.47% by early 2021. Positive margins emerge starting March 31, 2021, increasing to around 36.32% by the fourth quarter of 2022. Following this peak, margins decline progressively, settling between approximately 11.27% and 21.55% toward early 2025. This trajectory indicates an initial period of losses followed by strong profitability and a subsequent gradual decline in net margins, suggesting factors such as increased costs, lower pricing power, or other operational challenges impacting net income despite stable operating margins.