Bloomberg Project

BloombergProject

Thispaper mainly focuses on application of the various concepts andtechniques for a real company and at the same time integrating theBloomberg information technology system. At this point in time, weare consulting firm that is offering advice to the company managementon myriad of issues. In preparation of the report, several issueswill be covered and among them include the financial aspects of thecompany. The financial aspects will include three most recentfillings and annual reports. Further, the reports also highlight thecompany description and this includes industry prospects, competitiveposition and corporate strategies. Further, the paper will also seekto explain the corporate governance analysis that is present in thecompany and in doing so, the paper will explain whether there is aseparation between the management and ownership of the company. Ofgreat interest is the image in society and this include the corporateactions and insider trading that the company involves itself in. Thevarious income statements, balance sheets, cash flow and capitalstructure of the firm in general shall be explained.

CompanyProfile

Thissection covers the non-financial corporations and the corporationunder our case is Exxon Mobil. Normally, the non-financialcorporations mainly are involved in the production of various goodsfor the market and the on-financial services. The financialtransactions of the non-financial corporations are usually differentfrom that of the owners. The non-financial corporations are usuallygrouped as either private or public, nonprofits or associations andthe holding companies.

ExxonMobil Corp mainly referred to as ExxonMobil is a US multinationalcorporation that deals in oil and gas. With its headquarters inIrving, Texas this company is one of the largest in the group ofStandard Oil Company and formed through a merger between Exxon andMobil.

Currently,ExxonMobil stands to be the third largest publicly traded company interms of market capitalization and is the 6thlargest company by revenue. Exxon Mobil Corporation has specialinterests and ventures in operation of petroleum and thepetrochemical businesses within the global front. The company has itsoperations mainly in the areas of exploration and production of oiland gas, generation of electric power and operations in coal andminerals. The company further deals in the manufacture and marketingof fuels, lubricants and various chemicals.

Descriptionof the Company

Industryprospects

Currently,ExxonMobil is stands out to be the largest oil and gas corporationglobally and this is due to the $324 billion market capitalization.The company’s success and ventures is traced back in 1870 on theStandard Oil. This company is on record for the highest profit that acompany has ever recorded in a year and this stood at $45.22 billionin 2008. The company currently is very profitable and is known tohave a history of rewarding the shareholder through its growing shareof dividends. The company has realized an increase in dividendpayments for the last successive 33 years.

ForExxonMobil, the S&ampP 500’s P/E ratio currently stands at justover 20. This is an overwhelming performance given that thehistorical mean P/E ratio for the market stands at 15.6. Nonetheless,there are no significant reasons why the P/E ratio should indeed behigher than the average given that currently the US is not in theboom period. Most likely, the record low interest rates have had apush on the market in a big way and this has gone past the historicallevels of P/E.

Generally,ExxonMobil has been adamant in taking part in the market rally andthis has seen a decline in stock by 19% in the last year. The P/Eratio of ExxonMobil is at just 14.1 something that is just below themarket level. Over the last 10 years, the company’s P/E 10 ratiothat mainly gauges the current price to the mean earnings of thecompany has not recovered from the Great Recession that was witnessedin 2007 to 2009 and currently it is below the historical average ofthe company (Appendix 1)

CompetitivePosition

Thebusiness model that the company employs has ensured that it remainscompetitive and within the largest oil and gas companies. Thebusiness model focuses on being excellent in the daily operations andgeneration of superior cash flow as well as creation of value to theshareholder. In order for the company to remain as the 6thlargest company by revenue, it has mainly been guided by severalfundamentals including operation in a safe and environmentallyresponsible manner. The company cherishes safety and it remains acore value and the commitment to safety ultimately ensuresresponsibility in operations and thus leads to better businessresults.

Thecompany in its operation upholds high standards and that the mannerin which the results are achieved is important just as the resultthemselves. Highest integrity is the hallmark of business operations.The company has established wide range of management system toaddress the pertinent issues in regards to the business. The otherkey aspect in the competitiveness of the company has been maintenanceof financial strength. The company has always been assigned thehighest credit rating in regards to the financial obligations. ExxonMobil also prides and pegs its success in balanced portfolio as wellas better competitive advantages in comparison to the competitors.

Corporatestrategies

Thecorporate strategies for Exxon Mobil mainly pivot on sustainablesolutions that are based on timely business practices. First, thecompany focuses on having excellence operational delivery. Thecompany has recognized that strong business strategies only work withsuperior execution hence there is working that is done to improveboth production and efficiency while at the same time maintaining theexcellent quality of products.

Theother strategy is building technology relationship and the companyhas appreciated that in essence there is need to lead the way in newproduct development while concentrating on improving the existingproducts via the technological innovations. This is essential instrengthening the industry position of the company.

Anotherstrategy is to ensure benefit in terms of integration as the companyensures that at global stage it is capable of creating enormous poolof resources and provide several opportunities to integrate. Thecompany currently has more than 90% of the chemical capacityincorporated in the refining and natural gas operations.

Theother prime corporate strategy for the company is investing withintelligence and discipline. In doing such investments, there isfocus that occurs beyond market fluctuations to assist inidentification of the long-term trends that will ensure shaping up ofthe industry. This explains the reason why the company isincreasingly investing in the high-growth areas that span theAsia-Pacific region and the continued presence in the Middle East.

CorporateGovernance Analysis

Incarrying out the analysis in this section, focus is to find outwhether the company has separation between management and ownership,that is, controlling or minority ownership. The potential conflictsof interest in the firm are raised and the manner in which thecompany manages its image in the society is explained. The areasunder focus include the corporate actions of the companies, insidertrading and the institutional ownership.

Analysisof Income Statements

Theincome statement is designed to provide information regarding thefinancial results of the business activities of a company over acertain period. The income statement usually communicates the amountof revenue that a company generates during a period and the costincurred when generating the revenue.

Inanalyzing the income statements, we start with the sales and otheroperating revenue. This usually entails the total revenue that isrecognized in a particular time and in most cases it is derived fromthe sale of goods, the services that are rendered, the insurancepremiums and other activities that make up the earning of a givenfirm. Even though our focus is on non-financial corporation, for thefinancial services companies, there is often the inclusion ofinvestment and interest income, and sales and trading gains. Duringthe financial year of 2012 to 2013, there was decline sales and otheroperating revenue for Exxon Mobil Corp. The trend would not be anydifferent in the transition period that covered the financial years2013 to 2014.

Secondis the operating income and it refers to the net result that ariseswhen one deducts operating expenses from the operating revenueswithin a given time. The operating income of Exxon Mobil Corp reducedfrom 2012 to 2013 and also the reduction would be witnessed in thefinancial years 2013 to 2014.

Theanalysis also incorporates income taxes and this alludes to the totaloperating profit and non-operating income usually referred to asexpense prior to income which is treated as loss from the equitymethod investments, the income taxes, the extraordinary items, thetotal cumulative effects of the changes taken in for the sake ofaccounting principles and the non-controlling interest. The incomebefore taxes of Exxon Mobil Corporation reduced from 2012 to 2013 andfrom 2013 to 2014.

Theother critical area in the analysis includes the non-controllinginterests. They refer to the consolidated profit or loss for a giventime. Often they are net of income taxes and they include the part orsegment that is attributed to the non-controlling interest. For thecase of Exxon Mobil Corporation, the net income entailednon-controlling interests that reduced from 2012 to the financialyear 2013. However, there was a slight increase witnessed in thefinancial year 2013 to 2014.

Theother part that is analyzed is the net income that is attributable toExxon Mobil Corporation and this part refers to a consolidation ofprofit or loss for a period and includes the net of income taxes thatare attributed to the parent. For Exxon Mobil Corporation, the netincome attributed to Exxon Mobil reduced from 2012 to 2013 and alsofrom 2013 to 2014.

Analysisof Balance Sheet

Inanalyzing the balance sheet, various aspects of the balance sheet aretaken into consideration and they include the assets, liability andequality. Of great interest in this section include examination ofthe last three years annual balance sheets, which are the financialyears 2012 to 2014. The relation of assets to cash and cashequivalents, the inventory as well as account receivable areexplored. Additionally, the relation of total liabilities andshareholder equity to long term debt, equity and retained earningsare also explained. The company’s capital structure choices shallalso be explained. Relevant observations during the period understudy will be brought out.

Assets

Theassets of ExxonMobil have grown by about 45% and this was witnessedthrough the financial year 2012 to the third quarter of the financialyear 2014. Comparing it to the other competitors like Chevron,ExxonMobil performed better given that it had a balance sheet of $353billion in comparison to Chevron’s balance sheet of $265 by the endof the same period. In analyzing the performance, it is apparent thatthere was a sharp drop in the cash and a jump in the assets. Thefirst item has mainly been as a result of the company standing pat onits dividends and also as a result of buying back of shares duringthe worst days that define the financial years.

Theeffects would even be felt after the financial crisis. Also, it isnoted that the low crude prices highly reduced the earnings duringthis period. This is a classic case of the reason for havingfundamentally sound company like Exxon Mobil to stand the inevitablebusiness or economic cycles as well as the vagaries of the commoditymarkets. The other critical item occurred mainly as a result of theseminal XOM, the ill-timed acquisition of XTO energy in 2010. Theeffect of the event is felt right across the balance sheet of ExxonMobil.

Liabilityand Equity

Oneof the critical item that has to be taken into consideration in thebalance sheet is the liabilities of the company in relation to thesteady long-term debt and payables. The former takes intoconsideration the earnings that fueled the expansion in the assetswhile the latter takes into consideration the superior workingcapital management. Combining the several factors like the earnings,share buybacks and the XTO acquisition, the balance sheet of thecompany comes out to have ideally grown from nearly $126 billion in2007 to $187 billion at the end of the 2014 financial year.

Comparingit to other Dividend Payers

ExxonMobil is known to be a dominant player in the oil and gas industrybut the main question that arises is how it compares to the otherdominant players in the industry. Doing this comparison helps toestablish whether Exxon Mobil is a solid investment within the oiland gas industry or whether it has a favorable investment in regardsto the other stock investment opportunities. In doing the comparison,the 5 Buy Rules that emanates from the 8 rules of dividend investingcompare the business that have a long history of dividend payments toeach other using several different metrics that have historicallybeen indicative of a high quality investment.

ExxonMobil has had an increase in the dividend payments for nearly 33years in a row. The long history of dividend increases is a strongindicator that the company has been able to grow in its profits forseveral decades. Notably, the dividend Aristocrats have performed waybetter than the S&ampP 500 over the last 10 years by a percentage ofmore than 2.88 every year.

Thedividend yield of Exxon Mobil Corporation standing at 3.8% is the30thhighest out of 177 businesses that have over 25 years of dividendpayments with no reduction. The dividend yield of the company isnearly at 10 years high owing to the low valuation (Appendix). Thesignificance and the general importance of this is that the stockswith higher dividend yields have historically outperformed the stockswith lower dividend yields.

PayoutRatio

Currently,the payout ratio of Exxon Mobil Corporation stands at 52% of theearnings. The payout ratio of the company currently stands at the99thlowest out of the 177 businesses that have over 25 years of dividendpayments without a reduction. The low payout ratio of Exxon MobilCorporation gives the room for growth of the dividends at asignificantly higher speed in comparison to the general growth of thecompany over the years.

GrowthRate

ForExxon Mobil Corporation, the growth in earnings for every share hasmanaged to stand at over 3.4% every year at least for the pastdecade. The company boasts of having had the 120thhighest growth rate out of the 177 businesses that had over 25 yearsof dividend payments with no reduction. This has been of greatinterest given that the growth in dividend stocks have been so goodand ideally outperformed the stocks with unchanging dividends by over2.4% every year.

Appendices

Appendix1

IncomeStatement

ANNUALINCOME STATEMENT (VALUES IN 000`S)GETQUARTERLY DATA

Period Ending:

Trend

12/31/2014

12/31/2013

12/31/2012

12/31/2011

Total Revenue

$394,105,000

$420,836,000

$451,509,000

$467,029,000

Cost of Revenue

$266,831,000

$284,681,000

$302,056,000

$306,802,000

Gross Profit

$127,274,000

$136,155,000

$149,453,000

$160,227,000

Operating Expenses

Research and Development

$0

$0

$0

$0

Sales, General and Admin.

$74,226,000

$76,696,000

$81,844,000

$88,459,000

Non-Recurring Items

$1,669,000

$1,976,000

$1,840,000

$2,081,000

Other Operating Items

$17,297,000

$17,182,000

$15,888,000

$15,583,000

Operating Income

$34,082,000

$40,301,000

$49,881,000

$54,104,000

Add`l income/expense items

$4,511,000

$3,492,000

$14,162,000

$4,111,000

Earnings Before Interest and Tax

$51,916,000

$57,720,000

$79,053,000

$73,504,000

Interest Expense

$286,000

$9,000

$327,000

$247,000

Earnings Before Tax

$51,630,000

$57,711,000

$78,726,000

$73,257,000

Income Tax

$18,015,000

$24,263,000

$31,045,000

$31,051,000

Minority Interest

($1,095,000)

($868,000)

($2,801,000)

($1,146,000)

Equity Earnings/Loss Unconsolidated Subsidiary

$13,323,000

$13,927,000

$15,010,000

$15,289,000

Net Income-Cont. Operations

$45,843,000

$46,507,000

$59,890,000

$56,349,000

Net Income

$32,520,000

$32,580,000

$44,880,000

$41,060,000

Net Income Applicable to Common Shareholders

$32,520,000

$32,580,000

$44,880,000

$41,060,000

BalanceSheet

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ANNUALINCOME STATEMENT (VALUES IN 000`S)GETQUARTERLY DATA

Period Ending:

Trend

12/31/2014

12/31/2013

12/31/2012

12/31/2011

Current Assets

Cash and Cash Equivalents

$4,658,000

$4,913,000

$9,923,000

$13,068,000

Short-Term Investments

$0

$0

$0

$0

Net Receivables

$28,009,000

$33,152,000

$34,987,000

$38,642,000

Inventory

$16,678,000

$16,135,000

$14,542,000

$15,024,000

Other Current Assets

$3,565,000

$5,108,000

$5,008,000

$6,229,000

Total Current Assets

$52,910,000

$59,308,000

$64,460,000

$72,963,000

Long-Term Assets

Long-Term Investments

$35,239,000

$36,328,000

$34,718,000

$34,333,000

Fixed Assets

$252,668,000

$243,650,000

$226,949,000

$214,664,000

Goodwill

$0

$0

$0

$0

Intangible Assets

$0

$0

$0

$0

Other Assets

$8,676,000

$7,522,000

$7,668,000

$9,092,000

Deferred Asset Charges

$0

$0

$0

$0

Total Assets

$349,493,000

$346,808,000

$333,795,000

$331,052,000

Current Liabilities

Accounts Payable

$47,165,000

$55,916,000

$60,486,000

$69,794,000

Short-Term Debt / Current Portion of Long-Term Debt

$17,468,000

$15,808,000

$3,653,000

$7,711,000

Other Current Liabilities

$0

$0

$0

$0

Total Current Liabilities

$64,633,000

$71,724,000

$64,139,000

$77,505,000

Long-Term Debt

$16,978,000

$11,633,000

$11,483,000

$9,322,000

Other Liabilities

$47,588,000

$42,426,000

$48,943,000

$46,863,000

Deferred Liability Charges

$39,230,000

$40,530,000

$37,570,000

$36,618,000

Misc. Stocks

$0

$0

$0

$0

Minority Interest

$6,665,000

$6,492,000

$5,797,000

$6,348,000

Total Liabilities

$175,094,000

$172,805,000

$167,932,000

$176,656,000

Stock Holders Equity

Common Stocks

$10,792,000

$10,077,000

$9,653,000

$9,512,000

Capital Surplus

$0

$0

$0

$0

Retained Earnings

$408,384,000

$387,432,000

$365,727,000

$330,939,000

Treasury Stock

($225,820,000)

($212,781,000)

($197,333,000)

($176,932,000)

Other Equity

($18,957,000)

($10,725,000)

($12,184,000)

($9,123,000)

Total Equity

$174,399,000

$174,003,000

$165,863,000

$154,396,000

Total Liabilities &amp Equity

$349,493,000

$346,808,000

$333,795,000

$331,052,000

CashFlow

ANNUALINCOME STATEMENT (VALUES IN 000`S)GETQUARTERLY DATA

Period Ending:

Trend

12/31/2014

12/31/2013

12/31/2012

12/31/2011

Net Income

$32,520,000

$32,580,000

$44,880,000

$41,060,000

Cash Flows-Operating Activities

Depreciation

$17,297,000

$17,182,000

$15,888,000

$15,583,000

Net Income Adjustments

$3,110,000

$482,000

$3,313,000

$262,000

Changes in Operating Activities

Accounts Receivable

$3,118,000

($305,000)

($1,082,000)

$974,000

Changes in Inventories

($1,343,000)

($1,812,000)

($1,873,000)

($2,208,000)

Other Operating Activities

($4,042,000)

($1,583,000)

($11,381,000)

($1,472,000)

Liabilities

($6,639,000)

($2,498,000)

$3,624,000

$0

Net Cash Flow-Operating

$45,116,000

$44,914,000

$56,170,000

$55,345,000

Cash Flows-Investing Activities

Capital Expenditures

($32,952,000)

($33,669,000)

($34,271,000)

($30,975,000)

Investments

$1,715,000

($3,311,000)

$952,000

($2,547,000)

Other Investing Activities

$4,262,000

$2,779,000

$7,718,000

$11,357,000

Net Cash Flows-Investing

($26,975,000)

($34,201,000)

($25,601,000)

($22,165,000)

Cash Flows-Financing Activities

Sale and Purchase of Stock

($13,153,000)

($15,949,000)

($20,671,000)

($21,147,000)

Net Borrowings

$6,966,000

$11,604,000

($2,908,000)

$1,957,000

Other Financing Activities

$115,000

$48,000

$130,000

$260,000

Net Cash Flows-Financing

($17,888,000)

($15,476,000)

($33,868,000)

($28,256,000)

Effect of Exchange Rate

($281,000)

($175,000)

$217,000

($85,000)

Net Cash Flow

($28,000)

($4,938,000)

($3,082,000)

$4,839,000

FinancialRatiosBrokCenter

ANNUALINCOME STATEMENT (VALUES IN 000`S)

Period Ending:

Trend

12/31/2014

12/31/2013

12/31/2012

12/31/2011

Liquidity Ratios

Current Ratio

82%

83%

101%

94%

Quick Ratio

56%

60%

78%

75%

Cash Ratio

7%

7%

15%

17%

Profitability Ratios

Gross Margin

32%

32%

33%

34%

Operating Margin

9%

10%

11%

12%

Pre-Tax Margin

13%

14%

17%

16%

Profit Margin

8%

8%

10%

9%

Pre-Tax ROE

30%

33%

47%

47%

After Tax ROE

19%

19%

27%

27%

DividendYield

P/E10