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Exxon Mobil Analysis Winston Crutchfield Indiana Wesleyan University


The following observations have been made based on the Summary Annual Reports from Exxon Mobil for 2010 and 2011. The vast majority of Exxons assets are in the form of tangible goods and products. Exxon is heavily invested in fixed assets such as land, equipment, and buildings. They are also heavily invested in liquid assets such as inventory, accounts receivable, and investment portfolios. Exxon does invest large sums of money in intangible assets such as research for the development of technology, exploration for the development of new resources, research for the maximization of existing technology, and the impact of existing technology on the environment. According to the Summary Annual Report (2011), the value of their current assets is about $73 billion, the value of their fixed assets is about $250 billion, and the value of their intangible assets is about $9 billion. This represents a significant increase from 2010 of about $30 billion, most of which came in the form of current and fixed assets (p. 42). The net income for the company as a whole over the past two years has increased from about $30 billion in 2010 to about $41 billion in 2011. This represents a 30% increase in net income between the two years. Total revenues increased by about $100 billion for a percentage change of 26% increase, while total expenses increased by about $85 billion for a percentage change of 25% increase (p. 41). The cash flow during this period increased from $7.8 billion in 2010 to $12.6 billion in 2011 for a total increase of 62%. Operating activities provided $55 billion in 2011, up 14.5% from the $48 billion in 2010. Investing activities decreased from $24 billion to $22 billion over this period, for a decrease of 8%. Financing activities increased from $27 billion to $28 billion, for an increase of 4% (p. 43).

EXXON MOBIL ANALYSIS Over the past two years, the stock price has risen from $64.99 to $79.71 average daily closing, for a percentage increase of 23%. The year end closing rate increased from $73.12 to $84.76 for a percentage increase of 16% (p. 40). Net income and cash flow differ because of the application of GAAP accounting and the measurement of real assets. Because GAAP governs net income, income and expenses are recognized in the accounting during the time period in which they are incurred or accrued as an account payable or receivable. Because cash flow measures the amount of real assets on hand at any given time, income and expenses are recognized when the money changes hands. This can

cause differences when, for example, a company makes a sale on credit and pays for expense out of pocket. Their total assets will exceed the cash on hand because the cash for the sale has not yet been collected. The cash flow statement is divided into three sections. Operating activities describes revenue and expenses that are realized in the process of normal daily operations. Investing activities describes expenditures and income dealing with operating activities that are not incurred on a regular basis, and that are outside the strict scope of company operation such as the acquisition and disposal of equipment. Financing activities describe transactions that affect the operating capital of the company, such as acquisition or retirement of debt and the sale or purchase of common stock. According to the cash flow statements in the Annual Report, Exxon receives most of its money from its net income, with a significant amount realized by adjustments for non-cash transactions. The largest part of their cash expenditure relates to additions to property, plants, and equipment, with a significant portion of that expense being returned by the sale of old


property, plants, and equipment. Exxon also spent a significant sum on the acquisition of its own common stock to be held by the company.

EXXON MOBIL ANALYSIS References zzzzzzz ======Reference placeholder, don't delete====== zzzzzz Exxon Mobil. (2011). 2011 Summary Annual Report. Retrieved from