Profitability & company

The company over the years has increased its profitability, gross profit has increased and this is attributed to the proper management of its assets, liquidity and debt management. The factor that has led to an increase in profitability is an increase in borrowing that has enabled the company to increase its assets and therefore generate more sales levels using these assets, despite the decline in efficiency in the use of these assets it is still evident that these assets have increased the profits of the company, the return on assets ratio is equal to 0.

1677 which is a decline from previous years and also the debt equity ratio which is 0. 98 is a decline from the previous years showing that the company has relatively increased borrowing rather than finance the operation through equity. The borrowing has enabled the company to have comparative advantage over fiance through equity. From the above discussion therefore this company has achieved high profitability through an increase in assets financed by borrowing which has proved less expensive than equity financing.

The efficiency in the use of assets has also aided the company to improve on profits, finally the current ratio shows that the company’s creditworthiness has allowed it to borrow more to finance operations. Firms stock prices: The following chart summarizes the stock prices of Exxon Mobil; data was retrieved from yahoo finance available at http://finance. yahoo. com/q/hp? s=XOM From the above chart there has been a decline in the stock prices of Exxon Mobil over the last few months, however this shows that in the near future the prices may rise to a peak as depicted by the business cycle curve.

Revenue per share according to recent data shows is $80. 367 and cash per share is $7. 643, the book value per share according to the financial times is 23. 03, cash flow per share according to the financial times is 10. 39, the cash flow margins according to the financial times is 12. 85. From previous levels it is evident that the book value per share has increased over the last three years, this has increased the value of shares and therefore created value to investments by the investors.