Profitability Analysis

Difficulty level: Basic


Ratios (Summary)

Royal Dutch Shell PLC, profitability ratios

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Return on Sales
Gross profit margin 15.15% 15.44% 15.23% 15.67% 16.42%
Operating profit margin 4.47% 5.73% 7.84% 8.91% 6.93%
Net profit margin 3.53% 3.63% 5.69% 6.58% 5.47%
Return on Investment
Return on equity (ROE) 8.65% 9.09% 14.11% 18.24% 13.60%
Return on assets (ROA) 4.21% 4.58% 7.38% 8.96% 6.24%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Royal Dutch Shell PLC's gross profit margin improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Royal Dutch Shell PLC's operating profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Royal Dutch Shell PLC's net profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.
ROE A profitability ratio calculated as net income divided by shareholders' equity. Royal Dutch Shell PLC's ROE deteriorated from 2012 to 2013 and from 2013 to 2014.
ROA A profitability ratio calculated as net income divided by total assets. Royal Dutch Shell PLC's ROA deteriorated from 2012 to 2013 and from 2013 to 2014.

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Gross Profit Margin

Royal Dutch Shell PLC, gross profit margin calculation

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Gross profit 63,789  69,650  71,148  73,669  60,422 
Revenue 421,105  451,235  467,153  470,171  368,056 
Ratio
Gross profit margin1 15.15% 15.44% 15.23% 15.67% 16.42%
Benchmarks
Gross Profit Margin, Competitors
BP PLC 12.53% 14.05% 12.89% 17.51% 5.48%
Chevron Corp. 23.62% 23.77% 25.69% 26.48% 27.22%
ConocoPhillips 40.96% 45.08% 44.75% 13.98% 15.50%
Exxon Mobil Corp. 24.85% 25.08% 25.83% 27.13% 29.13%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2014 Calculations

1 Gross profit margin = 100 × Gross profit ÷ Revenue
= 100 × 63,789 ÷ 421,105 = 15.15%

Ratio Description The company
Gross profit margin Gross profit margin indicates the percentage of revenue available to cover operating and other expenditures. Royal Dutch Shell PLC's gross profit margin improved from 2012 to 2013 but then deteriorated significantly from 2013 to 2014.

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Operating Profit Margin

Royal Dutch Shell PLC, operating profit margin calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Operating income 18,840  25,878  36,636  41,877  25,497 
Revenue 421,105  451,235  467,153  470,171  368,056 
Ratio
Operating profit margin1 4.47% 5.73% 7.84% 8.91% 6.93%
Benchmarks
Operating Profit Margin, Competitors
BP PLC 0.37% 3.87% 1.87% 7.69% -5.22%
Chevron Corp. 9.84% 12.36% 15.18% 15.67% 12.80%
ConocoPhillips 13.29% 20.52% 20.94% 7.17% 6.24%
Exxon Mobil Corp. 8.65% 9.58% 11.01% 11.58% 10.84%
Operating Profit Margin, Sector
Integrated Oil & Gas 5.69% 7.82% 8.88% 10.03% 6.13%
Operating Profit Margin, Industry
Oil & Gas 6.29% 8.52% 9.29% 10.12% 6.68%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2014 Calculations

1 Operating profit margin = 100 × Operating income ÷ Revenue
= 100 × 18,840 ÷ 421,105 = 4.47%

Ratio Description The company
Operating profit margin A profitability ratio calculated as operating income divided by revenue. Royal Dutch Shell PLC's operating profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.

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Net Profit Margin

Royal Dutch Shell PLC, net profit margin calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Income attributable to Royal Dutch Shell plc shareholders 14,874  16,371  26,592  30,918  20,127 
Revenue 421,105  451,235  467,153  470,171  368,056 
Ratio
Net profit margin1 3.53% 3.63% 5.69% 6.58% 5.47%
Benchmarks
Net Profit Margin, Competitors
BP PLC 1.07% 6.19% 3.08% 6.84% -1.25%
Chevron Corp. 9.60% 9.73% 11.35% 11.01% 9.60%
ConocoPhillips 13.08% 16.83% 14.54% 5.08% 6.00%
Exxon Mobil Corp. 8.25% 7.74% 9.90% 8.79% 8.23%
Net Profit Margin, Sector
Integrated Oil & Gas 5.44% 6.75% 7.43% 7.60% 5.43%
Net Profit Margin, Industry
Oil & Gas 5.14% 6.93% 7.37% 7.54% 5.60%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2014 Calculations

1 Net profit margin = 100 × Income attributable to Royal Dutch Shell plc shareholders ÷ Revenue
= 100 × 14,874 ÷ 421,105 = 3.53%

Ratio Description The company
Net profit margin An indicator of profitability, calculated as net income divided by revenue. Royal Dutch Shell PLC's net profit margin deteriorated from 2012 to 2013 and from 2013 to 2014.

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Return on Equity (ROE)

Royal Dutch Shell PLC, ROE calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Income attributable to Royal Dutch Shell plc shareholders 14,874  16,371  26,592  30,918  20,127 
Equity attributable to Royal Dutch Shell plc shareholders 171,966  180,047  188,494  169,517  148,013 
Ratio
ROE1 8.65% 9.09% 14.11% 18.24% 13.60%
Benchmarks
ROE, Competitors
BP PLC 3.39% 18.14% 9.78% 23.06% -3.92%
Chevron Corp. 12.41% 14.37% 19.18% 22.16% 18.10%
ConocoPhillips 13.23% 17.58% 17.56% 19.07% 16.57%
Exxon Mobil Corp. 18.65% 18.72% 27.06% 26.59% 20.74%
ROE, Sector
Integrated Oil & Gas 11.63% 15.04% 17.90% 22.03% 13.71%
ROE, Industry
Oil & Gas 10.17% 14.33% 16.39% 20.05% 12.76%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2014 Calculations

1 ROE = 100 × Income attributable to Royal Dutch Shell plc shareholders ÷ Equity attributable to Royal Dutch Shell plc shareholders
= 100 × 14,874 ÷ 171,966 = 8.65%

Ratio Description The company
ROE A profitability ratio calculated as net income divided by shareholders' equity. Royal Dutch Shell PLC's ROE deteriorated from 2012 to 2013 and from 2013 to 2014.

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Return on Assets (ROA)

Royal Dutch Shell PLC, ROA calculation, comparison to benchmarks

 
Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010
Selected Financial Data (USD $ in millions)
Income attributable to Royal Dutch Shell plc shareholders 14,874  16,371  26,592  30,918  20,127 
Total assets 353,116  357,512  360,325  345,257  322,560 
Ratio
ROA1 4.21% 4.58% 7.38% 8.96% 6.24%
Benchmarks
ROA, Competitors
BP PLC 1.33% 7.67% 3.86% 8.77% -1.37%
Chevron Corp. 7.23% 8.44% 11.24% 12.84% 10.30%
ConocoPhillips 5.89% 7.76% 7.19% 8.12% 7.27%
Exxon Mobil Corp. 9.30% 9.39% 13.45% 12.40% 10.07%
ROA, Sector
Integrated Oil & Gas 5.64% 7.45% 8.75% 10.29% 6.24%
ROA, Industry
Oil & Gas 4.93% 7.02% 7.97% 9.53% 5.98%

Source: Based on data from Royal Dutch Shell PLC Annual Reports

2014 Calculations

1 ROA = 100 × Income attributable to Royal Dutch Shell plc shareholders ÷ Total assets
= 100 × 14,874 ÷ 353,116 = 4.21%

Ratio Description The company
ROA A profitability ratio calculated as net income divided by total assets. Royal Dutch Shell PLC's ROA deteriorated from 2012 to 2013 and from 2013 to 2014.

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