Phillips 66 (NYSE:PSX)

Return on Assets (ROA)

The Return on Assets demonstrates a declining trend from the beginning of the observation period in March 2016, starting at 7.51%, and decreasing steadily to a low of 3.01% by December 2016. Following this period, there is a noticeable recovery with ROA increasing to a peak of 11.73% in September 2018. After reaching this high, ROA begins to decline once more, falling to 5.24% by the end of 2019. Overall, the ROA exhibits cyclical fluctuations with a peak in late 2018 and a downward trend in the final quarters.

Financial Leverage

The financial leverage ratio remains relatively stable throughout the entire period, fluctuating modestly between 2.12 and 2.43. The data shows minor increases and decreases, with the ratio peaking around mid-2018 at 2.43. There is no significant upward or downward trend, indicating consistent use of debt relative to equity over the examined periods.

Return on Equity (ROE)

The Return on Equity follows a trend similar to that of ROA but with more pronounced fluctuations. Starting at 15.91% in March 2016, ROE declines to 6.95% by the end of that year. Subsequently, there is a substantial increase, reaching a high of 28.10% in September 2018. After this peak, ROE exhibits a clear downward trajectory, diminishing to 12.35% by December 2019. The ROE thus reflects greater volatility than ROA and shows a strong peak in 2018 followed by a notable decline.

Summary of Trends

The financial performance as measured by ROA and ROE reveals a period of weakening in 2016, followed by a significant improvement culminating in late 2018. Post-2018, both profitability ratios decline, suggesting challenges in maintaining earlier performance levels. Financial leverage remains steady, indicating that changes in returns are likely attributed to operational performance rather than variations in debt structure.

Net Profit Margin

The net profit margin exhibited a fluctuating pattern over the analyzed periods. Initially, it declined from 3.87% in the first quarter of 2016 to a low of 1.85% by the end of 2016. It then showed a gradual recovery, reaching a peak of 5.85% in the third quarter of 2018. However, following this peak, the margin experienced a gradual decline, dropping to 2.87% by the last quarter of 2019. This indicates variability in profitability with a notable peak in late 2018 followed by a weakening in 2019.

Asset Turnover

Asset turnover ratios showed moderate variation but generally maintained a steady trend within a range from 1.63 to 2.05. Starting at 1.94 in early 2016, the ratio slightly decreased during 2016 but increased again to a peak of 2.05 in late 2018. In 2019, the ratio decreased modestly, stabilizing around 1.83 towards the end of the year. This suggests relatively consistent asset utilization with some minor fluctuations.

Financial Leverage

Financial leverage ratios ranged between 2.12 and 2.43 across the periods. After starting at 2.12 in early 2016, leverage increased slightly, peaking at 2.43 in mid-2018 before declining to approximately 2.2 by the end of that year. In 2019, leverage ratios remained relatively stable around 2.33 to 2.36. Overall, the data indicates moderate leverage with slight shifts but no significant structural changes in financing strategy.

Return on Equity (ROE)

Return on equity followed a pattern similar to net profit margin but with more pronounced fluctuations. The ROE declined markedly from 15.91% in the first quarter of 2016 to a low of 6.95% by the end of 2016. Subsequently, ROE improved significantly, peaking at 28.1% in the third quarter of 2018. After this peak, ROE declined steadily, reaching 12.35% at the end of 2019. This indicates periods of strong shareholder returns in 2017-2018 followed by a reduction in profitability and efficiency impacting equity returns in 2019.

The analyzed quarterly financial data reveals several notable trends and fluctuations in key financial ratios over the specified periods.

Tax Burden

The tax burden ratio remained relatively stable around 0.7 to 0.75 from early 2016 through mid-2017, before experiencing a significant increase, peaking at 1.54 in the fourth quarter of 2017. Subsequently, it showed a marked decline back to approximately 0.78 to 0.8 by the end of 2019, indicating considerable volatility in tax impact during the observed timeframe.

Interest Burden

This ratio displayed a gentle downward trend from 0.94 in early 2016 to a low of 0.86 in late 2016 and early 2017, followed by a moderate recovery up to 0.93 through 2019, concluding slightly lower at 0.89 in the final quarter. The interest burden thus reflected relatively minor fluctuations with a moderate weakening in early periods and stabilization thereafter.

EBIT Margin

The earnings before interest and taxes (EBIT) margin showed a clear dip from 5.88% in the first quarter of 2016 to a low of 2.9% by the end of that year. Thereafter, the margin steadily improved through 2018, reaching a peak of 6.88% in the final quarter of 2018. However, a downward trajectory was observed throughout 2019, declining to 4.04% by year-end. This pattern suggests a recovery phase after early weakness followed by renewed margin compression.

Asset Turnover

Asset turnover demonstrated a general decline from 1.94 in early 2016 to about 1.63 by the end of 2016. From 2017 onwards, the ratio improved consistently, peaking at 2.05 in late 2018, before a slight decrease to around 1.83 by the close of 2019. This indicates improved efficiency in asset utilization post-2016, with marginal reductions in late periods.

Financial Leverage

The financial leverage ratio exhibited incremental increases during 2016 and 2017, reaching 2.34 in the third quarter of 2017. Afterward, a downward correction occurred, dropping to 2.17 by the end of 2017, followed by a secondary rise and stabilization around 2.36 during 2018 and 2019. This suggests a moderate increase in leverage initially, with some stabilization in the later quarters.

Return on Equity (ROE)

ROE experienced a decline from 15.91% at the start of 2016 to 6.95% by year-end 2016. The subsequent year showed gradual improvement and a strong surge to a peak of 28.1% in the third quarter of 2018. In 2019, ROE trended downward again, falling to 12.35% by the last quarter. This pattern reflects significant volatility, with periods of strong profitability followed by notable contractions.

Net Profit Margin

The net profit margin exhibits noticeable fluctuations over the examined periods. Initially, it declines from 3.87% to a low of 1.85% by the end of 2016, indicating a reduction in profitability relative to revenues during that year. Following this trough, there is a gradual recovery beginning in early 2017, with the margin rising steadily to a peak of approximately 5.85% by the third quarter of 2018. However, subsequent quarters reveal a downward trend, with margins decreasing to 2.87% by the final quarter of 2019. This pattern suggests that profitability experienced a recovery phase but faced pressures toward the end of the period.

Asset Turnover

Asset turnover remains relatively stable yet demonstrates minor variations. From the start of the dataset through 2016, this ratio trends downward slightly from 1.94 to 1.63, indicating a modest decrease in operational efficiency in generating sales from assets. Throughout 2017 and 2018, asset turnover improves steadily, reaching a high of 2.05 in the final quarter of 2018, implying enhanced utilization of assets. In 2019, however, the ratio declines somewhat, stabilizing near 1.83 by year-end, which could imply a slight reduction in efficiency or asset base expansion without proportional sales growth.

Return on Assets (ROA)

The return on assets shows a distinct pattern mirroring the combined effects of net profit margin and asset turnover. Beginning with a decline from 7.51% to 3.01% during 2016, ROA signals diminishing overall effectiveness in generating profits from assets. A resurgence occurs in 2017 and 2018, with ROA peaking at 11.73% in the third quarter of 2018, reflecting stronger profitability and asset use efficiency. Despite this peak, the ratio declines sharply in 2019, down to 5.24% by the last quarter, indicating reduced profitability or operational effectiveness in relation to asset usage toward the end of the period.

Tax Burden

The tax burden ratio remained relatively stable around 0.7 to 0.75 from early 2016 until the third quarter of 2017. A significant spike occurred in the fourth quarter of 2017, reaching 1.5 and peaking at 1.54 in the first quarter of 2018. This elevated level persisted moderately high through the end of 2018 before returning to a range near 0.78 to 0.8 during 2019. This pattern indicates a substantial fluctuation in taxes affecting net income during late 2017 and 2018, followed by normalization.

Interest Burden

The interest burden ratio exhibited a gradual decline from 0.94 in the first quarter of 2016 to a low of 0.86 by the last quarter of 2016. It remained fairly consistent around 0.86 to 0.89 through 2017 and into 2018. A slight improvement was observed in the first three quarters of 2019 with ratios around 0.93, before a minor decline to 0.89 in the final quarter. The data suggests a moderate effect of interest expense on earnings before tax, with relatively stable trends after an initial early decline.

EBIT Margin

The EBIT margin declined notably from 5.88% in the first quarter of 2016 to a low of 2.9% by the end of that year. It gradually improved throughout 2017, reaching 3.76% in the last quarter, and continued its upward trajectory throughout 2018, peaking at 6.88% in the final quarter. In 2019, the margin remained strong in the first three quarters before dipping to 4.04% in the last quarter. Overall, the margin demonstrated a recovery and growth trend after a trough in 2016, with a slight weakening at the end of 2019.

Asset Turnover

Asset turnover showed a declining trend from 1.94 in early 2016 to around 1.63 by the end of that year. This was followed by a steady increase through 2017 and 2018, peaking at 2.05 in the last quarter of 2018. The ratio slightly declined in 2019, stabilizing around 1.83 by year-end. These movements indicate improving efficiency in asset utilization after an initial decrease, with a slight moderation in asset turnover efficiency during 2019.

Return on Assets (ROA)

ROA mirrored the EBIT margin trend, starting at 7.51% in the first quarter of 2016, decreasing to 3.01% by the end of that year. Substantial improvement occurred in 2017 and 2018, with ROA peaking at 11.73% in the third quarter of 2018. However, the ratio showed a declining pattern throughout 2019, ending at 5.24%. This reflects an overall positive return trend post-2016 with a notable contraction in asset profitability toward the end of the observed period.

Tax Burden Ratio

The tax burden ratio exhibits relative stability around values close to 0.7 from early 2016 through mid-2017. A significant spike is observed in late 2017, reaching values above 1.3, peaking at 1.54, indicating an unusual tax effect or potential one-time tax-related adjustments during that period. After this spike, the ratio declines sharply and stabilizes around 0.78 to 0.8 throughout 2018 and 2019, suggesting a return to more typical tax burdens.

Interest Burden Ratio

The interest burden ratio demonstrates a gradual decrease from 0.94 in early 2016 to a low of 0.86 by the end of 2016. Subsequently, there is a moderate recovery, with values fluctuating around the 0.9 mark for most of 2017 through 2019. This pattern indicates some variation in interest expenses relative to earnings before interest and taxes but generally reflects stable interest cost management over the analyzed timeframe.

EBIT Margin (%)

The EBIT margin starts relatively strong at 5.88% in the first quarter of 2016 but experiences a downward trend, hitting a low of 2.9% by the end of 2016. Beginning in early 2017, the margin shows recovery and improvement, peaking at 6.88% in the last quarter of 2018. This improvement is moderated by some declines in 2019, ending at 4.04% in the fourth quarter, suggestive of volatility in operating profitability but a positive overall recovery trend after 2016.

Net Profit Margin (%)

Net profit margin mirrors several movements of the EBIT margin with an initial decline from 3.87% to 1.85% during 2016, followed by gradual recovery through 2017 and stabilization above 4.5% during 2018. Noteworthy is a spike in net margin to nearly 5% at the end of 2017, indicative of favorable tax or interest effects impacting the bottom line. 2019 shows a mild downward trend concluding at 2.87% in the last quarter, implying challenges in maintaining profitability levels achieved in 2018.