Phillips 66 (NYSE:PSX)

Over the examined five-year period, several key financial ratios demonstrate notable fluctuations and trends across the company's operational efficiency, liquidity, leverage, and profitability.

Asset Turnover

The reported total asset turnover ratio shows a decline from 2.04 in 2015 to 1.63 in 2016, followed by a recovery peaking at 2.05 in 2018, before decreasing again to 1.83 in 2019. The adjusted total asset turnover follows a similar pattern with a low point in 2016 at 1.5 and a peak in 2018 at 1.9, subsequently declining to 1.7 in 2019. This indicates some volatility but generally a trend of recovery mid-period and a modest reduction towards the end.

Liquidity Ratios

The reported current ratio declines from 1.63 in 2015 to 1.24 in 2019, with a minor increase between 2016 and 2018, suggesting a gradual reduction in short-term liquidity over time. Conversely, the adjusted current ratio remains higher across all years and shows a similar fluctuating trend, declining from 1.81 in 2015 to 1.61 in 2019, which still points to a slightly stronger liquidity position after adjustments.

Leverage Ratios

The reported debt to equity ratio rises steadily from 0.38 in 2015 to 0.47 in 2019, which may indicate increasing reliance on debt financing relative to equity. The adjusted debt to equity remains more stable, fluctuating mildly around the 0.32–0.36 range, suggesting that adjustments moderate the perceived leverage increase. Reported debt to capital ratios display a modest upward trend from 0.28 to 0.32, consistent with the reported debt to equity pattern, while adjusted debt to capital remains nearly flat around 0.25 to 0.26.

Financial Leverage

The reported financial leverage ratio grows from 2.1 in 2015 to 2.36 in 2019, confirming increased gearing over the period. The adjusted leverage ratio is substantially lower and more stable, increasing slightly from 1.65 to 1.7, reflecting a more conservative view of leverage after adjustments.

Profitability Ratios

The reported net profit margin exhibits pronounced volatility, with a decrease from 4.27% in 2015 to 1.85% in 2016, then a rebound to about 5% in 2017 and 2018, before a decline to 2.87% in 2019. The adjusted net profit margin, however, remains relatively consistent around 4.2% to 4.6% after a jump from 2.96% in 2015 to above 4.6% in 2016, indicating adjustments smooth out profit margin variations.

The reported return on equity (ROE) mirrors the volatility of net profit margins, dropping sharply in 2016 to 6.95% from 18.3% in 2015, peaking in 2018 at 22.7%, and then falling again to 12.35% in 2019. Adjusted ROE, while lower, presents a steadier upward trend from 9.38% in 2015 to 13.43% in 2019, reflecting improved shareholder returns based on adjusted figures.

The reported return on assets (ROA) shows a similar pattern, declining to 3.01% in 2016 after 8.7% in 2015, then increasing to 10.3% in 2018, followed by a drop to 5.24% in 2019. Adjusted ROA trends upward more smoothly from 5.68% in 2015 to a peak of 7.93% in 2018, slightly decreasing to 7.89% in 2019.

In summary, the data reflect periods of volatility especially around 2016 and 2019, with apparent recovery in operating efficiency and profitability between 2017 and 2018. Adjusted ratios generally demonstrate more stable and sometimes more conservative assessments of liquidity, leverage, and profitability. The increasing leverage and modest reduction in liquidity ratios over time suggest a strategic shift toward greater use of debt financing, balanced against generally improving operational returns when excluding adjustments. The fluctuations in profitability ratios indicate sensitivity to external factors or internal changes influencing net margins and returns.

The financial data over the five-year period demonstrates several key trends in operational performance and asset management.

Sales and other operating revenues

Revenues experienced fluctuations, initially declining from 98,975 million US$ in 2015 to 84,279 million US$ in 2016. This was followed by a notable recovery and growth to 102,354 million US$ in 2017 and reaching a peak of 111,461 million US$ in 2018. However, revenues slightly decreased to 107,293 million US$ in 2019.

Total assets

Total assets increased steadily during the period, rising from 48,580 million US$ in 2015 to 58,720 million US$ by the end of 2019. This reflects a growing asset base over the five years.

Reported total asset turnover ratio

The reported total asset turnover ratio shows variability, beginning at 2.04 in 2015, decreasing to 1.63 in 2016, then improving to 1.88 in 2017 and 2.05 in 2018. In 2019, this ratio declined again to 1.83. The initial decline and subsequent recovery suggest fluctuating efficiency in using assets to generate sales. The drop in 2019 indicates a slight reduction in asset utilization efficiency that year.

Adjusted total assets

Adjusted total assets also showed a steady upward trend, increasing from 51,530 million US$ in 2015 to 63,013 million US$ in 2019. This indicates asset growth after adjustments, which may account for factors such as depreciation or certain asset reclassifications.

Adjusted total asset turnover ratio

This ratio follows a similar pattern to the reported total asset turnover, starting at 1.92 in 2015, declining to 1.50 in 2016, then rising to 1.70 in 2017 and 1.90 in 2018, before slightly falling to 1.70 in 2019. This pattern confirms variability in the efficiency of asset utilization when adjusted figures are considered, with the best performance seen in 2018 and a pullback in 2019.

Overall, the data reveals a pattern of initial decline in revenue and asset turnover efficiency in 2016, followed by general recovery and growth peaking around 2018. Despite increases in both total and adjusted assets, the asset turnover ratios indicate some challenges in maintaining consistent efficiency in turning assets into revenues, particularly with a decline observed in the final year of the dataset.

The analyzed financial data reveals notable trends in the company's liquidity position over the five-year period ending in December 2019.

Current Assets

Current assets experienced an overall upward trend, increasing from $12,256 million in 2015 to $14,395 million in 2019. There was a steady rise through 2017, peaking at $14,390 million, followed by a slight decrease in 2018, and another increase in 2019.

Current Liabilities

Current liabilities showed volatility, beginning at $7,531 million in 2015 and increasing substantially to $11,646 million by the end of 2019. There was a significant jump from 2018 ($8,935 million) to 2019, indicating increased short-term obligations.

Reported Current Ratio

The reported current ratio decreased from 1.63 in 2015 to 1.24 in 2019, indicating a gradual weakening in the company's ability to cover short-term liabilities with current assets. Although the ratio fluctuated slightly, the downward trend reflects an increasing pressure on liquidity.

Adjusted Current Assets

Adjusted current assets, which likely account for additional considerations beyond reported current assets, showed a consistent upward movement from $13,611 million in 2015 to $18,736 million in 2019. Despite a drop in 2018 similar to reported assets, the overall increase was more pronounced, signaling improved asset quality or revaluation.

Adjusted Current Ratio

The adjusted current ratio mirrored the trend in adjusted assets, starting at 1.81 in 2015, peaking at 1.85 in 2017, and gradually declining to 1.61 in 2019. While the ratio remains above 1.5, suggesting adequate short-term liquidity, the downward movement suggests some erosion in this cushion.

Overall, the data indicates that while the company has increased its current and adjusted current assets over the analyzed period, current liabilities have risen at a faster pace, particularly in the final year reported. This has resulted in declining reported and adjusted current ratios, pointing to a potential weakening in short-term financial stability. Nevertheless, the adjusted ratios maintain a moderate margin, suggesting that adjusted liquidity remains relatively sound despite the decline.

Total Debt

The total debt of the company increased consistently over the five-year period, rising from $8,887 million at the end of 2015 to $11,763 million by the end of 2019. This reflects a progressive accumulation of debt, with a notable increase between 2017 and 2018.

Stockholders' Equity

Stockholders’ equity showed some variability but overall maintained a stable upward trend. It decreased slightly from $23,100 million in 2015 to $22,390 million in 2016, then increased steadily through 2017 to 2019, reaching $24,910 million at the end of 2019.

Reported Debt to Equity Ratio

The reported debt to equity ratio exhibited fluctuations, initially rising from 0.38 in 2015 to 0.45 in 2016, then decreasing to 0.40 in 2017. Thereafter, it increased again, reaching its peak at 0.47 in 2019. This indicates an overall trend toward higher financial leverage over the period considered.

Adjusted Total Debt

Adjusted total debt followed a clear upward trajectory, increasing from $10,643 million in 2015 to $13,024 million in 2019. This steady increase, consistent with the total debt trend, suggests adjustments reflecting additional liabilities or refinements in debt measurement.

Adjusted Total Equity

Adjusted total equity demonstrated a general upward movement, growing from $31,173 million in 2015 to $37,015 million in 2019. Despite a small reduction from 2017 to 2018, the equity base expanded over the period, indicating value enhancement or revaluation benefits.

Adjusted Debt to Equity Ratio

The adjusted debt to equity ratio remained relatively stable over the five years, fluctuating narrowly between 0.32 and 0.36, ending at 0.35 in 2019. This suggests balanced growth in adjusted debt and equity, implying a consistent capital structure after adjustment factors are applied.

The financial data reveals several notable trends in the company's debt and capital structure over the five-year period ending in 2019.

Total Debt and Total Capital

Total debt displayed a consistent upward trajectory, increasing from approximately $8.9 billion in 2015 to nearly $11.8 billion by the end of 2019. This represents a growth of roughly 32%. Over the same period, total capital also rose steadily from about $32.0 billion to $36.7 billion, an increase of approximately 15%.

Reported Debt to Capital Ratio

The reported debt to capital ratio exhibited relative stability, fluctuating modestly between 0.28 and 0.32. Starting at 0.28 in 2015, it peaked at 0.32 in 2019, indicating a slight increase in leverage but maintaining a ratio range suggestive of moderate indebtedness relative to total capital.

Adjusted Total Debt and Adjusted Total Capital

The adjusted total debt, which presumably accounts for additional liabilities or refinements in measurement, showed a similar upward trend, rising from about $10.6 billion in 2015 to over $13.0 billion in 2019, an increase of approximately 22%. Adjusted total capital increased from $41.8 billion to $50.0 billion during the same timeframe, reflecting growth of about 20%.

Adjusted Debt to Capital Ratio

The adjusted debt to capital ratio was more stable compared to the reported ratio, beginning and ending the period close to 0.25 and 0.26 respectively, with a slight dip to 0.24 in 2017 before returning to 0.26 in 2019. This suggests a consistent capital structure when considering the adjusted values, with a balanced approach to leverage.

Overall, the data indicates a moderate increase in both debt and capital levels over the period, with leverage ratios remaining relatively stable. The consistency in adjusted debt to capital ratios implies the company maintained a cautious and steady financial position regarding debt financing relative to its capital base, even as absolute amounts grew.

The financial data demonstrates several notable trends over the five-year period ending in 2019.

Total Assets

Total assets steadily increased from $48,580 million in 2015 to $58,720 million in 2019, indicating ongoing asset growth of approximately 21% over the period. This reflects an expansion in the company’s asset base.

Stockholders’ Equity

Stockholders’ equity showed minor fluctuations, initially decreasing from $23,100 million in 2015 to $22,390 million in 2016, then rising consistently to $24,910 million by 2019. The overall change represents a marginal increase of roughly 8% from 2015 to 2019.

Reported Financial Leverage

The reported financial leverage ratio increased from 2.1 in 2015 to 2.36 in 2019. This trend suggests a gradual rise in the company's use of debt relative to equity over the period, potentially indicating increased financial risk or greater reliance on external financing.

Adjusted Total Assets

Adjusted total assets, which may account for valuation adjustments or other refinements, rose steadily from $51,530 million in 2015 to $63,013 million in 2019. This growth trend is consistent with the reported total assets but begins at a higher base and reflects a more pronounced increase of about 22%.

Adjusted Total Equity

Adjusted total equity increased consistently each year from $31,173 million in 2015 to $37,015 million in 2019, a gain of nearly 19%. This reflects a stronger equity position when adjustments are considered, contrasting with the relatively flat reported stockholders’ equity.

Adjusted Financial Leverage

The adjusted financial leverage ratio remained relatively stable, fluctuating narrowly between 1.64 and 1.7 throughout the period. This stability suggests that when adjustments are applied, the company maintained a consistent balance between debt and equity financing, with limited additional leverage risk.

In summary, the data reflects growth in asset levels irrespective of whether reported or adjusted figures are considered. Equity growth is more apparent in the adjusted figures, signifying possible revaluation or accounting treatments enhancing perceived equity strength. The reported leverage indicates a mild upward trend in debt use, while adjusted leverage remains steady, suggesting the company's core financial structure is stable once adjustments are incorporated.

The analysis of the financial data reveals several noteworthy trends in profitability and revenue over the five-year period. Net income attributable to the company showed significant variability, starting at 4,227 million US dollars in 2015, sharply declining to 1,555 million in 2016, then recovering strongly to reach a peak of 5,595 million in 2018 before decreasing again to 3,076 million in 2019. This fluctuation indicates volatility in net earnings during the period under review.

Sales and other operating revenues experienced fluctuations but exhibited an overall increasing trend from 98,975 million US dollars in 2015 to a high of 111,461 million in 2018, followed by a slight decline to 107,293 million in 2019. Despite the slight dip in the final year, the general upward trajectory until 2018 suggests growth in the company's operating revenues over most of the period.

The reported net profit margin mirrors the net income pattern closely, declining from 4.27% in 2015 to 1.85% in 2016, then rising significantly to 4.99% in 2017 and 5.02% in 2018. The margin subsequently dropped to 2.87% in 2019. This fluctuation further confirms the profitability volatility highlighted by the net income data.

When examining adjusted net income, which excludes certain non-recurring items, a more stable and generally upward trend emerges. Adjusted net income rose from 2,925 million in 2015 to 4,971 million in 2019, indicating improved profitability when smoothing out irregular factors.

Aligned with this, the adjusted net profit margin shows a consistent upward trend from 2.96% in 2015 to 4.63% in 2019, albeit with a slight dip to 4.17% in 2018. This stability and growth suggest that the company's core operations have been improving in profitability despite the variations seen in reported figures.

Summary of key observations

The company's net income and reported net profit margin were volatile, with notable swings particularly between 2015 and 2019, including a peak in 2018 followed by declines.

Sales and other operating revenues generally increased until 2018, reflecting expansion in the business, with a minor reduction in 2019.

Adjusted net income and adjusted net profit margin both displayed a more consistent and positive trajectory, suggesting enhanced underlying profitability once exceptional items were removed.

The disparity between reported and adjusted profit metrics emphasizes the impact of non-recurring items and indicates the importance of considering adjusted results for assessing core business performance.

The financial data reveals several notable trends in profitability and equity levels over the five-year period under review. Net income attributable to the company showed considerable volatility, with a sharp decrease from 4,227 million USD in 2015 to 1,555 million USD in 2016, followed by a strong recovery reaching a peak of 5,106 million USD in 2017. Subsequently, it further increased to 5,595 million USD in 2018 but then declined to 3,076 million USD in 2019.

Stockholders' equity exhibited more stability, with a slight dip from 23,100 million USD in 2015 to 22,390 million USD in 2016, then a gradual increase to 25,085 million USD in 2017. However, it experienced minor fluctuations thereafter, settling around 24,910 million USD by the end of 2019, indicating relative steadiness in the company's net assets during this period.

The reported Return on Equity (ROE) mirrored the volatility seen in net income. It started at a high of 18.3% in 2015, dropped to 6.95% in 2016, rebounded strongly to 20.35% in 2017, and peaked at 22.7% in 2018 before declining to 12.35% in 2019. This pattern underscores the impact of fluctuating earnings on shareholder returns in the reported figures.

Adjusted net income, on the other hand, followed a more consistent upward trajectory from 2,925 million USD in 2015 to 4,971 million USD in 2019. This suggests that adjustments made to net income to exclude certain items provide a smoother and progressively improving earnings trend.

Similarly, adjusted total equity increased steadily over the period, rising from 31,173 million USD in 2015 to 37,015 million USD in 2019. This consistent growth in adjusted equity indicates an accumulation of shareholder value when considering the adjusted basis, which may better reflect the ongoing capital structure.

The adjusted ROE depicts a stable and gradual improvement throughout the years, increasing from 9.38% in 2015 to 13.43% in 2019. This steady rise, in contrast to the more volatile reported ROE, suggests underlying strengthening profitability when excluding certain nonrecurring or unusual items.

Summary of findings:

- Net income and reported ROE show significant volatility, with decreases in 2016 and 2019 contrasting against peaks in 2017 and 2018.

- Stockholders’ equity has been relatively stable but with minor fluctuations over the period.

- Adjusted net income and adjusted total equity demonstrate consistent growth, supporting a narrative of improving core business performance.

- Adjusted ROE exhibits gradual enhancement, reflecting a steady increase in profitability on an adjusted basis.

The data reveals several noteworthy trends spanning from 2015 to 2019. Net income attributable to the company demonstrates significant variability, peaking in 2017 and 2018 before declining in 2019. This fluctuation contrasts with the more consistent increase in total assets over the same period, indicating growth in asset base despite the volatility in net income.

Reported Return on Assets (ROA) follows a similar pattern to net income, with a high value in 2015, a notable dip in 2016, recovery and peak in 2018, followed by a decrease in 2019. This variability suggests that the company's profitability relative to its asset base was subject to environmental or operational changes during these years.

When examining adjusted figures, the adjusted net income presents a smoother upward trajectory from 2015 through 2019, reflecting improved underlying profitability when excluding certain items. Adjusted total assets also show consistent growth, mirroring the pattern in reported total assets but with slightly higher values.

Adjusted ROA exhibits a gradual and stable increase from 2015 to 2018, stabilizing somewhat in 2019. This stability in adjusted ROA contrasts with the more volatile reported ROA, suggesting adjusted metrics may provide a clearer view of operational efficiency and profitability trends over time.

Net Income

Displayed high volatility with a peak in 2017 and 2018, followed by a decline in 2019.

Total Assets

Showed a steady increase across the entire period, indicating growth in the asset base.

Reported ROA

Varied considerably, reflecting fluctuations in profit generation relative to assets, peaking in 2018 and declining in 2019.

Adjusted Net Income

Displayed a consistent upward trend, suggesting improved core profitability over the years when adjustments are made.

Adjusted Total Assets

Consistently increased, illustrating asset growth consistent with reported figures but at slightly elevated levels.

Adjusted ROA

Increased steadily from 2015 to 2018 and remained stable in 2019, indicating sustained operational performance when measured on an adjusted basis.