Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Occidental Petroleum Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2024-12-31), 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).
The asset utilization ratios exhibit a distinct bell-shaped trend, characterized by a period of significant improvement from 2020 to 2022, followed by a consistent decline through 2024. This pattern suggests a peak in operational efficiency regarding asset deployment during the 2022 fiscal year.
- Net Fixed Asset Turnover
- A substantial increase in efficiency was recorded between 2020 and 2022, with the ratio rising from 0.27 to a peak of 0.63. This indicates a period of enhanced revenue generation from fixed assets. However, this trend reversed after 2022, with the ratio declining to 0.48 in 2023 and further to 0.39 by the end of 2024. The inclusion of right-of-use assets shows a nearly identical trajectory, suggesting that operating leases have a negligible impact on overall fixed asset efficiency.
- Total Asset Turnover
- The total asset turnover ratio mirrored the movement of fixed asset turnover, increasing from 0.22 in 2020 to a maximum of 0.50 in 2022. The subsequent decrease to 0.31 in 2024 reflects a reduction in the company's ability to generate sales from its entire asset base, signaling a decline in overall investment productivity over the final two years of the period.
- Equity Turnover
- Equity turnover peaked earlier than the asset-based ratios, reaching its highest point of 1.28 in 2021. Unlike the total asset metrics, which peaked in 2022, equity turnover has experienced a steady downward trend for three consecutive years, falling to 0.93 in 2023 and 0.78 in 2024. This suggests that the growth in equity has outpaced the growth in revenue, or that revenue generation relative to shareholder investment has weakened.
Overall, the data indicates that while there was a strong recovery and peak in asset productivity between 2020 and 2022, the period from 2023 to 2024 has been marked by a broad contraction in turnover efficiency across fixed assets, total assets, and equity.
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Net Fixed Asset Turnover
Occidental Petroleum Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Property, plant and equipment, net | 69,378) | 58,529) | 58,384) | 59,930) | 65,889) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 0.39 | 0.48 | 0.63 | 0.43 | 0.27 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | 1.31 | 1.28 | 1.64 | 1.06 | — | |
| ConocoPhillips | 0.58 | 0.80 | 1.21 | 0.71 | — | |
| Exxon Mobil Corp. | 1.15 | 1.56 | 1.95 | 1.28 | — | |
| Net Fixed Asset Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.09 | 1.34 | 1.73 | 1.12 | — | |
| Net Fixed Asset Turnover, Industry | ||||||
| Energy | 1.15 | 1.39 | 1.77 | 1.15 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Net fixed asset turnover = Net sales ÷ Property, plant and equipment, net
= 26,725 ÷ 69,378 = 0.39
2 Click competitor name to see calculations.
The analysis of net fixed asset turnover from 2020 to 2024 reveals a period of significant volatility, characterized by a rapid increase in asset efficiency followed by a steady decline.
- Net Sales Performance
- Net sales experienced a substantial upward trend between 2020 and 2022, rising from 17,809 million US$ to a peak of 36,634 million US$. A contraction followed in the subsequent years, with revenues falling to 28,257 million US$ in 2023 and further decreasing to 26,725 million US$ by the end of 2024.
- Fixed Asset Base Evolution
- Net property, plant, and equipment showed a gradual decline from 65,889 million US$ in 2020 to 58,384 million US$ in 2022. This trend reversed sharply in 2024, where the asset base increased to 69,378 million US$, indicating a significant expansion of the capital base through investment or acquisitions toward the end of the period.
- Net Fixed Asset Turnover Analysis
- The net fixed asset turnover ratio followed a non-linear path, increasing from 0.27 in 2020 to a high of 0.63 in 2022. This peak was driven by the simultaneous growth in sales and the reduction in the net fixed asset base. Subsequently, the ratio declined to 0.48 in 2023 and 0.39 in 2024, reflecting reduced revenue generation per unit of fixed assets, which was further compounded by the increased asset base in the final year.
The observed patterns suggest that the efficiency gains realized through 2022 were closely tied to revenue surges. The recent decline in the turnover ratio indicates that the expansion of capital investment seen in 2024 has not yet resulted in proportional increases in net sales.
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Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset)
Occidental Petroleum Corp., net fixed asset turnover (including operating lease, right-of-use asset) calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Property, plant and equipment, net | 69,378) | 58,529) | 58,384) | 59,930) | 65,889) | |
| Operating lease assets | 937) | 1,130) | 903) | 726) | 1,062) | |
| Property, plant and equipment, net (including operating lease, right-of-use asset) | 70,315) | 59,659) | 59,287) | 60,656) | 66,951) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover (including operating lease, right-of-use asset)1 | 0.38 | 0.47 | 0.62 | 0.43 | 0.27 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Competitors2 | ||||||
| Chevron Corp. | 1.26 | 1.24 | 1.59 | 1.03 | — | |
| ConocoPhillips | 0.57 | 0.79 | 1.20 | 0.70 | — | |
| Exxon Mobil Corp. | 1.13 | 1.51 | 1.89 | 1.24 | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.07 | 1.30 | 1.68 | 1.09 | — | |
| Net Fixed Asset Turnover (including Operating Lease, Right-of-Use Asset), Industry | ||||||
| Energy | 1.12 | 1.35 | 1.72 | 1.12 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Net fixed asset turnover (including operating lease, right-of-use asset) = Net sales ÷ Property, plant and equipment, net (including operating lease, right-of-use asset)
= 26,725 ÷ 70,315 = 0.38
2 Click competitor name to see calculations.
The efficiency of fixed asset utilization exhibited a period of significant improvement followed by a moderate decline between 2020 and 2024. The net fixed asset turnover ratio peaked in 2022, reflecting a period of high revenue generation relative to the asset base, before retreating in the subsequent two years.
- Revenue Trajectory
- Net sales grew substantially from US$ 17,809 million in 2020 to a peak of US$ 36,634 million in 2022. This growth phase was followed by a contraction, with sales decreasing to US$ 28,257 million in 2023 and further to US$ 26,725 million by the end of 2024.
- Fixed Asset Base Evolution
- Net property, plant, and equipment, including right-of-use assets, underwent a period of contraction from US$ 66,951 million in 2020 to a low of US$ 59,287 million in 2022. Following a period of relative stability in 2023, there was a sharp increase in the asset base to US$ 70,315 million in 2024, indicating a significant expansion of the long-term investment base.
- Net Fixed Asset Turnover Analysis
- The turnover ratio rose from 0.27 in 2020 to 0.62 in 2022, driven by the combination of rising net sales and a shrinking asset base. The subsequent decline to 0.47 in 2023 and 0.38 in 2024 resulted from the inverse pressure of declining sales and a substantial increase in net fixed assets during the 2024 period. This trend indicates a reduction in the effectiveness of the fixed asset base in generating top-line revenue toward the end of the analyzed period.
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Total Asset Turnover
Occidental Petroleum Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Total assets | 85,445) | 74,008) | 72,609) | 75,036) | 80,064) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.31 | 0.38 | 0.50 | 0.35 | 0.22 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | 0.75 | 0.75 | 0.91 | 0.65 | — | |
| ConocoPhillips | 0.45 | 0.59 | 0.84 | 0.51 | — | |
| Exxon Mobil Corp. | 0.75 | 0.89 | 1.08 | 0.82 | — | |
| Total Asset Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 0.71 | 0.80 | 0.99 | 0.71 | — | |
| Total Asset Turnover, Industry | ||||||
| Energy | 0.71 | 0.79 | 0.97 | 0.71 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Total asset turnover = Net sales ÷ Total assets
= 26,725 ÷ 85,445 = 0.31
2 Click competitor name to see calculations.
The total asset turnover ratio exhibited a cyclical trend between 2020 and 2024, characterized by an initial phase of efficiency growth followed by a subsequent decline in asset utilization.
- Revenue and Asset Dynamics (2020-2022)
- A strong upward trajectory in asset efficiency is observed from 2020 to 2022, with the total asset turnover ratio increasing from 0.22 to a peak of 0.50. This improvement was driven by a substantial increase in net sales, which rose from 17,809 million US$ to 36,634 million US$, occurring simultaneously with a reduction in the total asset base from 80,064 million US$ to 72,609 million US$.
- Performance Retraction (2023-2024)
- A downward trend in the turnover ratio followed the 2022 peak, falling to 0.38 in 2023 and further to 0.31 by the end of 2024. This decline is attributed to the convergence of two factors: a contraction in net sales to 26,725 million US$ and a significant expansion of total assets, which reached 85,445 million US$ in 2024, the highest level recorded during the analyzed period.
- Analysis of Asset Utilization Efficiency
- The data indicates that optimal asset utilization was achieved in 2022. The subsequent decrease in the ratio suggests that the recent expansion of the asset base has not been accompanied by proportional growth in revenue, resulting in a lower capacity to generate sales from the company's total investments.
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Equity Turnover
Occidental Petroleum Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2024 | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net sales | 26,725) | 28,257) | 36,634) | 25,956) | 17,809) | |
| Stockholders’ equity | 34,159) | 30,250) | 30,085) | 20,327) | 18,573) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 0.78 | 0.93 | 1.22 | 1.28 | 0.96 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Chevron Corp. | 1.27 | 1.22 | 1.48 | 1.12 | — | |
| ConocoPhillips | 0.84 | 1.14 | 1.64 | 1.01 | — | |
| Exxon Mobil Corp. | 1.29 | 1.63 | 2.04 | 1.64 | — | |
| Equity Turnover, Sector | ||||||
| Oil, Gas & Consumable Fuels | 1.22 | 1.42 | 1.77 | 1.35 | — | |
| Equity Turnover, Industry | ||||||
| Energy | 1.24 | 1.43 | 1.76 | 1.36 | — | |
Based on: 10-K (reporting date: 2024-12-31), 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).
1 2024 Calculation
Equity turnover = Net sales ÷ Stockholders’ equity
= 26,725 ÷ 34,159 = 0.78
2 Click competitor name to see calculations.
The financial trajectory from 2020 to 2024 reveals a significant shift in the efficiency of capital utilization. After a period of rapid expansion in revenue generation, there is a visible contraction in the ability of the equity base to drive net sales, resulting in a downward trend in equity turnover since 2021.
- Net Sales Performance
- Net sales experienced substantial growth between 2020 and 2022, rising from 17,809 million US$ to a peak of 36,634 million US$. However, this momentum reversed after 2022, with revenues declining to 28,257 million US$ in 2023 and further to 26,725 million US$ by the end of 2024.
- Stockholders’ Equity Growth
- The equity base has demonstrated consistent upward movement throughout the analyzed period. Stockholders' equity increased from 18,573 million US$ in 2020 to 34,159 million US$ in 2024. A notable surge occurred between 2021 and 2022, where equity grew by approximately 48%, reflecting significant capital accumulation or retained earnings.
- Equity Turnover Analysis
- The equity turnover ratio peaked at 1.28 in 2021, indicating a period of high asset productivity relative to shareholder investment. From 2022 onward, the ratio declined steadily, reaching 0.78 by December 31, 2024. This deterioration is attributed to the dual impact of diminishing net sales and a concurrently expanding equity base, suggesting that each dollar of equity is generating progressively less revenue.
The divergence between rising equity and falling sales from 2022 to 2024 highlights a decrease in operational efficiency regarding investment activity. The transition from a turnover ratio of 1.28 to 0.78 indicates that the company is operating with an increasingly larger capital base without a proportional increase in top-line revenue.
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