Analysis of Long-term (Investment) Activity Ratios
Activity ratios measure how efficiently a company performs day-to-day tasks, such us the collection of receivables and management of inventory.
Long-term Activity Ratios (Summary)
Apache Corp., long-term (investment) activity ratios
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
- Net Fixed Asset Turnover
- The net fixed asset turnover ratio exhibits a fluctuating trend over the observed period. Initially, there is a decline from 0.37 in 2011 to 0.29 in 2014, indicating a gradual decrease in the efficiency with which fixed assets are used to generate revenue. However, in 2015, this ratio sharply increases to 0.45, surpassing the initial levels observed in 2011. This sudden improvement may suggest either enhanced asset utilization or a reduction in net fixed assets relative to sales in that year.
- Total Asset Turnover
- The total asset turnover ratio reveals a consistent downward trend from 0.32 in 2011 to 0.25 in 2014, reflecting a diminishing effectiveness in using total assets to generate revenues over these years. In 2015, there is a noticeable recovery to 0.34, which not only reverses the prior decline but also exceeds the earliest recorded value. This suggests a marked improvement in overall asset efficiency by the end of the period.
- Equity Turnover
- The equity turnover ratio, representing the efficiency of equity in generating sales, shows a gradual decline from 0.58 in 2011 to 0.49 in 2013, followed by a modest uptick to 0.53 in 2014. Most notably, 2015 features a significant increase to 2.49, a substantial jump compared to previous years. This dramatic rise could indicate a considerable increase in revenue relative to equity or a reduction in equity base, highlighting a major shift in the use of equity capital during the final year examined.
Net Fixed Asset Turnover
Apache Corp., net fixed asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Oil and gas production revenues | 6,383) | 13,749) | 16,402) | 16,947) | 16,810) | |
| Property and equipment, less accumulated depreciation, depletion, and amortization | 14,119) | 48,076) | 52,421) | 53,280) | 45,448) | |
| Long-term Activity Ratio | ||||||
| Net fixed asset turnover1 | 0.45 | 0.29 | 0.31 | 0.32 | 0.37 | |
| Benchmarks | ||||||
| Net Fixed Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Net fixed asset turnover = Oil and gas production revenues ÷ Property and equipment, less accumulated depreciation, depletion, and amortization
= 6,383 ÷ 14,119 = 0.45
2 Click competitor name to see calculations.
- Oil and Gas Production Revenues
- The oil and gas production revenues exhibited a downward trend over the five-year period. Starting at 16,810 million USD in 2011, they slightly increased to 16,947 million USD in 2012 before gradually declining to 16,402 million USD in 2013 and 13,749 million USD in 2014. A more pronounced decrease occurred by 2015, dropping to 6,383 million USD. This significant reduction in 2015 points to possible operational challenges or market conditions adversely affecting revenue generation.
- Property and Equipment, Net of Depreciation, Depletion, and Amortization
- The carrying value of property and equipment showed an initial increase from 45,448 million USD in 2011 to 53,280 million USD in 2012. However, it decreased slightly to 52,421 million USD in 2013 and then more substantially to 48,076 million USD in 2014. By 2015, the value had sharply declined to 14,119 million USD. This pattern suggests considerable asset disposals, impairments, or write-downs during the later years, particularly in 2015.
- Net Fixed Asset Turnover Ratio
- The net fixed asset turnover ratio, which measures the efficiency in generating revenue from net fixed assets, declined from 0.37 in 2011 to 0.29 in 2014, indicating decreasing operational efficiency in asset utilization. However, in 2015, there was a notable improvement to 0.45. This increase may relate to the significant reduction in net fixed assets combined with the revenue levels, resulting in a higher turnover ratio despite reduced revenues.
Total Asset Turnover
Apache Corp., total asset turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Oil and gas production revenues | 6,383) | 13,749) | 16,402) | 16,947) | 16,810) | |
| Total assets | 18,842) | 55,952) | 61,637) | 60,737) | 52,051) | |
| Long-term Activity Ratio | ||||||
| Total asset turnover1 | 0.34 | 0.25 | 0.27 | 0.28 | 0.32 | |
| Benchmarks | ||||||
| Total Asset Turnover, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Total asset turnover = Oil and gas production revenues ÷ Total assets
= 6,383 ÷ 18,842 = 0.34
2 Click competitor name to see calculations.
- Oil and Gas Production Revenues
- The revenues from oil and gas production exhibited a downward trend over the analyzed period. Starting at 16,810 million US dollars at the end of 2011, the revenues peaked slightly in 2012 at 16,947 million US dollars, followed by a steady decline through 2013 and 2014, reaching 13,749 million US dollars. A significant drop occurred in 2015, where revenues fell to 6,383 million US dollars, less than half of the initial value in 2011.
- Total Assets
- Total assets increased from 52,051 million US dollars in 2011, reaching a peak of 61,637 million US dollars in 2013. Following this peak, assets declined to 55,952 million US dollars in 2014 and fell sharply in 2015 to 18,842 million US dollars, which indicates a considerable contraction in the asset base at the end of the period.
- Total Asset Turnover
- The total asset turnover ratio showed a slight decrease from 0.32 in 2011 to 0.25 in 2014, indicating a gradual decline in the efficiency of asset utilization to generate revenues. However, in 2015, the ratio increased noticeably to 0.34, suggesting an improvement in asset productivity despite the reduced asset base and declining revenues.
- Overall Analysis
- The data reveals a challenging operational environment with significant reductions in revenue and asset base by the end of 2015. Despite the decrease in total assets and revenues, the company improved its asset turnover ratio in 2015, reflecting increased efficiency in using its assets to generate sales. This improvement may indicate management's efforts to optimize operations amid shrinking scale.
Equity Turnover
Apache Corp., equity turnover calculation, comparison to benchmarks
| Dec 31, 2015 | Dec 31, 2014 | Dec 31, 2013 | Dec 31, 2012 | Dec 31, 2011 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Oil and gas production revenues | 6,383) | 13,749) | 16,402) | 16,947) | 16,810) | |
| Total Apache shareholders’ equity | 2,566) | 25,937) | 33,396) | 31,331) | 28,993) | |
| Long-term Activity Ratio | ||||||
| Equity turnover1 | 2.49 | 0.53 | 0.49 | 0.54 | 0.58 | |
| Benchmarks | ||||||
| Equity Turnover, Competitors2 | ||||||
| Chevron Corp. | — | — | — | — | — | |
| ConocoPhillips | — | — | — | — | — | |
| Exxon Mobil Corp. | — | — | — | — | — | |
| Occidental Petroleum Corp. | — | — | — | — | — | |
Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).
1 2015 Calculation
Equity turnover = Oil and gas production revenues ÷ Total Apache shareholders’ equity
= 6,383 ÷ 2,566 = 2.49
2 Click competitor name to see calculations.
- Oil and gas production revenues
- The revenues from oil and gas production exhibited a declining trend over the five-year period. Initially, revenue was relatively stable at around 16,810 to 16,947 million US dollars between 2011 and 2012, followed by a modest decrease to 16,402 million in 2013. A more significant decline occurred thereafter, dropping to 13,749 million in 2014 and sharply falling to 6,383 million by the end of 2015. This represents a substantial reduction in production revenues, suggesting challenges in either production volume, pricing, or market conditions.
- Total Apache shareholders’ equity
- Shareholders' equity showed initial growth from 28,993 million US dollars in 2011 to a peak of 33,396 million in 2013. However, in the subsequent years, equity fell markedly to 25,937 million in 2014 and further decreased drastically to 2,566 million in 2015. This large drop in equity towards the end of the period may indicate significant losses, asset write-downs, or other financial impacts on the company's net worth.
- Equity turnover
- The equity turnover ratio, which measures revenue generated per unit of shareholders’ equity, decreased slightly from 0.58 in 2011 to 0.49 in 2013, indicating a gradual decline in efficiency or capital utilization during this period. However, in 2014 the ratio increased modestly to 0.53 before spiking dramatically to 2.49 in 2015. This sharp increase is primarily a result of the steep decline in shareholders’ equity in 2015, combined with reduced but proportionally less decreased revenues, signaling a significant shift in the company's financial structure and operational leverage.