Stock Analysis on Net

Valero Energy Corp. (NYSE:VLO)

Analysis of Inventory

Microsoft Excel

Inventory Disclosure

Valero Energy Corp., balance sheet: inventory

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Refinery feedstocks 2,223 1,949 1,995 1,979 2,399
Refined petroleum products and blendstocks 3,790 3,579 3,567 3,425 4,034
Renewable diesel feedstocks and products 913 583 135 50 46
Ethanol feedstocks and products 313 328 273 297 260
Materials and supplies 344 313 295 287 274
Inventories 7,583 6,752 6,265 6,038 7,013

Based on: 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), 10-K (reporting date: 2019-12-31).

Item Description The company
Inventories Amount after valuation and LIFO reserves of inventory expected to be sold, or consumed within one year or operating cycle, if longer. Valero Energy Corp. inventories increased from 2021 to 2022 and from 2022 to 2023.

Adjustment to Inventory: Conversion from LIFO to FIFO

Adjusting LIFO Inventory to FIFO (Current) Cost

US$ in millions

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Adjustment to Inventories
Inventories at LIFO (as reported) 7,583 6,752 6,265 6,038 7,013
Add: Inventory LIFO reserve 4,400 6,300 5,200 1,300 2,500
Inventories at FIFO (adjusted) 11,983 13,052 11,465 7,338 9,513
Adjustment to Current Assets
Current assets (as reported) 26,221 24,133 21,165 15,844 18,969
Add: Inventory LIFO reserve 4,400 6,300 5,200 1,300 2,500
Current assets (adjusted) 30,621 30,433 26,365 17,144 21,469
Adjustment to Total Assets
Total assets (as reported) 63,056 60,982 57,888 51,774 53,864
Add: Inventory LIFO reserve 4,400 6,300 5,200 1,300 2,500
Total assets (adjusted) 67,456 67,282 63,088 53,074 56,364
Adjustment to Total Valero Energy Corporation Stockholders’ Equity
Total Valero Energy Corporation stockholders’ equity (as reported) 26,346 23,561 18,430 18,801 21,803
Add: Inventory LIFO reserve 4,400 6,300 5,200 1,300 2,500
Total Valero Energy Corporation stockholders’ equity (adjusted) 30,746 29,861 23,630 20,101 24,303
Adjustment to Net Income (loss) Attributable To Valero Energy Corporation Stockholders
Net income (loss) attributable to Valero Energy Corporation stockholders (as reported) 8,835 11,528 930 (1,421) 2,422
Add: Increase (decrease) in inventory LIFO reserve (1,900) 1,100 3,900 (1,200) 1,000
Net income (loss) attributable to Valero Energy Corporation stockholders (adjusted) 6,935 12,628 4,830 (2,621) 3,422

Based on: 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), 10-K (reporting date: 2019-12-31).

Valero Energy Corp. inventory value on Dec 31, 2023 would be $11,983 (in millions) if the FIFO inventory method was used instead of LIFO. Valero Energy Corp. inventories, valued on a LIFO basis, on Dec 31, 2023 were $7,583. Valero Energy Corp. inventories would have been $4,400 higher than reported on Dec 31, 2023 if the FIFO method had been used instead.


Valero Energy Corp., Financial Data: Reported vs. Adjusted


Adjusted Financial Ratios: LIFO vs. FIFO (Summary)

Valero Energy Corp., adjusted financial ratios

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
Current Ratio
Reported current ratio (LIFO) 1.56 1.38 1.26 1.71 1.44
Adjusted current ratio (FIFO) 1.82 1.74 1.56 1.85 1.63
Net Profit Margin
Reported net profit margin (LIFO) 6.10% 6.54% 0.82% -2.19% 2.24%
Adjusted net profit margin (FIFO) 4.79% 7.16% 4.24% -4.04% 3.16%
Total Asset Turnover
Reported total asset turnover (LIFO) 2.30 2.89 1.97 1.25 2.01
Adjusted total asset turnover (FIFO) 2.15 2.62 1.81 1.22 1.92
Financial Leverage
Reported financial leverage (LIFO) 2.39 2.59 3.14 2.75 2.47
Adjusted financial leverage (FIFO) 2.19 2.25 2.67 2.64 2.32
Return on Equity (ROE)
Reported ROE (LIFO) 33.53% 48.93% 5.05% -7.56% 11.11%
Adjusted ROE (FIFO) 22.56% 42.29% 20.44% -13.04% 14.08%
Return on Assets (ROA)
Reported ROA (LIFO) 14.01% 18.90% 1.61% -2.74% 4.50%
Adjusted ROA (FIFO) 10.28% 18.77% 7.66% -4.94% 6.07%

Based on: 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), 10-K (reporting date: 2019-12-31).

Financial ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Valero Energy Corp. adjusted current ratio improved from 2021 to 2022 and from 2022 to 2023.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Valero Energy Corp. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Valero Energy Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Valero Energy Corp. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Valero Energy Corp. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Valero Energy Corp. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Valero Energy Corp., Financial Ratios: Reported vs. Adjusted


Adjusted Current Ratio

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Current assets 26,221 24,133 21,165 15,844 18,969
Current liabilities 16,802 17,461 16,851 9,283 13,160
Liquidity Ratio
Current ratio1 1.56 1.38 1.26 1.71 1.44
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted current assets 30,621 30,433 26,365 17,144 21,469
Current liabilities 16,802 17,461 16,851 9,283 13,160
Liquidity Ratio
Adjusted current ratio2 1.82 1.74 1.56 1.85 1.63

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 26,221 ÷ 16,802 = 1.56

2 Adjusted current ratio = Adjusted current assets ÷ Current liabilities
= 30,621 ÷ 16,802 = 1.82

Liquidity ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by current liabilities. Valero Energy Corp. adjusted current ratio improved from 2021 to 2022 and from 2022 to 2023.

Adjusted Net Profit Margin

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Valero Energy Corporation stockholders 8,835 11,528 930 (1,421) 2,422
Revenues, includes excise taxes on sales by certain of foreign operations 144,766 176,383 113,977 64,912 108,324
Profitability Ratio
Net profit margin1 6.10% 6.54% 0.82% -2.19% 2.24%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Valero Energy Corporation stockholders 6,935 12,628 4,830 (2,621) 3,422
Revenues, includes excise taxes on sales by certain of foreign operations 144,766 176,383 113,977 64,912 108,324
Profitability Ratio
Adjusted net profit margin2 4.79% 7.16% 4.24% -4.04% 3.16%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Net profit margin = 100 × Net income (loss) attributable to Valero Energy Corporation stockholders ÷ Revenues, includes excise taxes on sales by certain of foreign operations
= 100 × 8,835 ÷ 144,766 = 6.10%

2 Adjusted net profit margin = 100 × Adjusted net income (loss) attributable to Valero Energy Corporation stockholders ÷ Revenues, includes excise taxes on sales by certain of foreign operations
= 100 × 6,935 ÷ 144,766 = 4.79%

Profitability ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by revenue. Valero Energy Corp. adjusted net profit margin ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Total Asset Turnover

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Revenues, includes excise taxes on sales by certain of foreign operations 144,766 176,383 113,977 64,912 108,324
Total assets 63,056 60,982 57,888 51,774 53,864
Activity Ratio
Total asset turnover1 2.30 2.89 1.97 1.25 2.01
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Revenues, includes excise taxes on sales by certain of foreign operations 144,766 176,383 113,977 64,912 108,324
Adjusted total assets 67,456 67,282 63,088 53,074 56,364
Activity Ratio
Adjusted total asset turnover2 2.15 2.62 1.81 1.22 1.92

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Total asset turnover = Revenues, includes excise taxes on sales by certain of foreign operations ÷ Total assets
= 144,766 ÷ 63,056 = 2.30

2 Adjusted total asset turnover = Revenues, includes excise taxes on sales by certain of foreign operations ÷ Adjusted total assets
= 144,766 ÷ 67,456 = 2.15

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Valero Energy Corp. adjusted total asset turnover ratio improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Financial Leverage

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Total assets 63,056 60,982 57,888 51,774 53,864
Total Valero Energy Corporation stockholders’ equity 26,346 23,561 18,430 18,801 21,803
Solvency Ratio
Financial leverage1 2.39 2.59 3.14 2.75 2.47
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted total assets 67,456 67,282 63,088 53,074 56,364
Adjusted total Valero Energy Corporation stockholders’ equity 30,746 29,861 23,630 20,101 24,303
Solvency Ratio
Adjusted financial leverage2 2.19 2.25 2.67 2.64 2.32

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 Financial leverage = Total assets ÷ Total Valero Energy Corporation stockholders’ equity
= 63,056 ÷ 26,346 = 2.39

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Valero Energy Corporation stockholders’ equity
= 67,456 ÷ 30,746 = 2.19

Solvency ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Valero Energy Corp. adjusted financial leverage ratio decreased from 2021 to 2022 and from 2022 to 2023.

Adjusted Return on Equity (ROE)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Valero Energy Corporation stockholders 8,835 11,528 930 (1,421) 2,422
Total Valero Energy Corporation stockholders’ equity 26,346 23,561 18,430 18,801 21,803
Profitability Ratio
ROE1 33.53% 48.93% 5.05% -7.56% 11.11%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Valero Energy Corporation stockholders 6,935 12,628 4,830 (2,621) 3,422
Adjusted total Valero Energy Corporation stockholders’ equity 30,746 29,861 23,630 20,101 24,303
Profitability Ratio
Adjusted ROE2 22.56% 42.29% 20.44% -13.04% 14.08%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROE = 100 × Net income (loss) attributable to Valero Energy Corporation stockholders ÷ Total Valero Energy Corporation stockholders’ equity
= 100 × 8,835 ÷ 26,346 = 33.53%

2 Adjusted ROE = 100 × Adjusted net income (loss) attributable to Valero Energy Corporation stockholders ÷ Adjusted total Valero Energy Corporation stockholders’ equity
= 100 × 6,935 ÷ 30,746 = 22.56%

Profitability ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity. Valero Energy Corp. adjusted ROE improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.

Adjusted Return on Assets (ROA)

Microsoft Excel
Dec 31, 2023 Dec 31, 2022 Dec 31, 2021 Dec 31, 2020 Dec 31, 2019
As Reported
Selected Financial Data (US$ in millions)
Net income (loss) attributable to Valero Energy Corporation stockholders 8,835 11,528 930 (1,421) 2,422
Total assets 63,056 60,982 57,888 51,774 53,864
Profitability Ratio
ROA1 14.01% 18.90% 1.61% -2.74% 4.50%
Adjusted: After Conversion from LIFO to FIFO
Selected Financial Data (US$ in millions)
Adjusted net income (loss) attributable to Valero Energy Corporation stockholders 6,935 12,628 4,830 (2,621) 3,422
Adjusted total assets 67,456 67,282 63,088 53,074 56,364
Profitability Ratio
Adjusted ROA2 10.28% 18.77% 7.66% -4.94% 6.07%

Based on: 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), 10-K (reporting date: 2019-12-31).

2023 Calculations

1 ROA = 100 × Net income (loss) attributable to Valero Energy Corporation stockholders ÷ Total assets
= 100 × 8,835 ÷ 63,056 = 14.01%

2 Adjusted ROA = 100 × Adjusted net income (loss) attributable to Valero Energy Corporation stockholders ÷ Adjusted total assets
= 100 × 6,935 ÷ 67,456 = 10.28%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Valero Energy Corp. adjusted ROA improved from 2021 to 2022 but then slightly deteriorated from 2022 to 2023 not reaching 2021 level.