Chevron Corp. (NYSE:CVX)

The financial data reveals several key trends over the five-year period.

Net Operating Profit After Taxes (NOPAT)

NOPAT experienced significant fluctuation. In 2020, the company reported a substantial loss of approximately 10.3 billion US dollars. This shifted dramatically in 2021, with a positive profit of nearly 19.4 billion US dollars, followed by further growth to around 41.8 billion in 2022. However, in 2023, NOPAT decreased sharply to about 19.5 billion and remained relatively stable into 2024 with a slight increase to approximately 20.1 billion. This indicates a recovery phase after 2020, peaking in 2022, followed by a notable decline but stabilization thereafter.

Cost of Capital

The cost of capital showed a gradual increase from 13.26% in 2020 to a peak of 15.09% in 2022. It remained almost steady in 2023 at 15.07% and slightly declined to 14.89% in 2024. This suggests a tightening capital cost environment, perhaps influenced by market conditions or risk perception, with slight easing towards the end of the period.

Invested Capital

Invested capital decreased from about 197.3 billion US dollars in 2020 to 193.6 billion in 2021, indicating a reduction in capital investment or asset base. It then increased steadily to 212.3 billion in both 2022 and 2023, before a minor decrease to approximately 208.4 billion in 2024. Overall, the trend indicates an expansion in invested capital after 2021, peaking in 2022 and 2023, followed by slight contraction.

Economic Profit

Economic profit was deeply negative in 2020 at around -36.5 billion US dollars, reflecting a value destruction situation likely due to the large NOPAT loss and substantial invested capital. The negative trend improved in 2021, narrowing the loss to approximately -8.6 billion. In 2022, economic profit turned positive, reaching around 9.8 billion, corresponding with the strong NOPAT growth. However, 2023 saw a return to negative economic profit, approximately -12.5 billion, which slightly improved in 2024 to about -10.9 billion. This pattern suggests challenges in consistently generating returns above the cost of capital despite occasional recovery phases.

The data reveals notable fluctuations in profitability metrics over the observed five-year period. Initially, both net income and net operating profit after taxes (NOPAT) were negative in 2020, indicating a challenging financial environment or operational difficulties that year.

A significant turnaround is apparent in 2021, where both net income and NOPAT transition to positive figures. Net income improves markedly from a loss of 5,543 million US dollars in 2020 to a gain of 15,625 million US dollars in 2021. Similarly, NOPAT moves from a negative 10,295 million US dollars to a positive 19,443 million US dollars. This change suggests improved operational performance and profitability.

The positive trend continues into 2022, with net income reaching its highest point at 35,465 million US dollars and NOPAT following suit with 41,794 million US dollars. This peak indicates a period of especially strong financial results, likely driven by favorable market conditions or operational efficiencies.

Subsequently, both metrics decrease in 2023 but remain positive, with net income declining to 21,369 million US dollars and NOPAT dropping to 19,473 million US dollars. Although reduced from the previous year, these levels still reflect solid profitability.

In 2024, the trend stabilizes with a slight decrease in net income to 17,661 million US dollars, while NOPAT marginally rises to 20,090 million US dollars. The relatively stable results in the final year suggest an adjustment phase or normalization after the previous years' volatility.

Overall Trend

Initially negative performance in 2020, followed by a significant recovery and peak in 2022, then a moderated but stable profitability in subsequent years.

Net Income

Shifted from a substantial loss in 2020 to a peak in 2022, followed by a decline though maintaining positive levels through 2024.

Net Operating Profit After Taxes (NOPAT)

Mirrored the net income pattern with negative values in 2020, peaking in 2022, and settling at stable positive levels thereafter.

Financial Implications

The significant improvements from 2020 to 2022 imply successful management initiatives or external factors favoring profitability, while the subsequent moderate decrease points to normalization or increased market pressures.

The financial data reveals a significant fluctuation in the income tax expense (benefit) over the five-year period ending December 31, 2024. In 2020, a negative income tax expense value indicates a tax benefit, contrasting sharply with subsequent years where the figures show a tax expense. The income tax expense rose markedly from 5,950 million USD in 2021 to a peak of 14,066 million USD in 2022. This was followed by a decline to 8,173 million USD in 2023, and then a slight increase to 9,757 million USD in 2024.

Cash operating taxes exhibit a broadly similar trend to income tax expense, with amounts generally increasing over the period. Starting from 1,885 million USD in 2020, cash operating taxes rose substantially to 5,416 million USD in 2021, nearly doubling to 12,067 million USD in 2022. Thereafter, cash operating taxes decreased to 7,986 million USD in 2023, before modestly rising again to 8,681 million USD in 2024.

Income Tax Expense (Benefit)

Displayed volatility between 2020 and 2024, with a reversal from a tax benefit in 2020 to substantial tax expenses in following years. This indicates varied taxable income or changes in tax-related factors.

Cash Operating Taxes

Demonstrated a consistent upward trajectory from 2020 to 2022, peaking in 2022, followed by a notable decline in 2023 and a partial rebound in 2024, reflecting fluctuations in operational taxable activities or possibly changes in tax rates or policy implementations.

General Observation

The parallel movement of income tax expense and cash operating taxes suggests alignment between accounting reported tax obligations and actual cash tax payments. Both measures peaked in 2022, indicating possibly the highest taxable earnings or less favorable tax conditions during that year, before adjusting downward in 2023 and slightly increasing thereafter.

The data reveals several noteworthy trends across the financial metrics over the five-year period ending December 31, 2024.

Total reported debt & leases

There was a significant reduction in total reported debt and leases from 48,221 million US dollars in 2020 to 27,370 million in 2022. This downward trend continued in 2023 reaching 26,070 million, but there was a slight increase to 29,611 million in 2024. Overall, the company appears to have actively managed its debt, substantially lowering its obligations in the earlier years before a moderate rise in the final year.

Total Chevron Corporation stockholders’ equity

Stockholders' equity showed a consistent upward trajectory from 131,688 million US dollars in 2020 to a peak of 160,957 million in 2023. However, in 2024, equity decreased slightly to 152,318 million. This pattern suggests a generally healthy growth in equity, reflecting retained earnings or increases in capital, with a minor decline in the most recent year which could warrant further examination.

Invested capital

Invested capital experienced fluctuations during the period studied. It started at 197,314 million US dollars in 2020, saw a marginal decline to 193,606 million in 2021, followed by an increase to 212,342 million in 2022. The figure remained virtually unchanged in 2023 at 212,337 million, before slightly decreasing to 208,395 million in 2024. This indicates an overall stable level of capital investment, with periods of both expansion and modest contraction.

In summary, while debt levels decreased significantly in the initial years, there was a rebound in the latest year. Shareholders’ equity grew steadily until a slight pullback in the last year. Invested capital remained relatively stable with minor variations. These trends imply active financial management focusing on reducing leverage and maintaining shareholder value, with some adjustments apparent in the most recent period.

Economic Profit

The economic profit exhibits significant volatility over the analyzed period. It starts with a substantial negative value of -36,455 million USD at the end of 2020, indicating considerable economic losses. This loss decreases markedly in 2021 to -8,560 million USD. In 2022, there is a positive shift with economic profit reaching 9,758 million USD, suggesting improved operational efficiency or profitability during this year. However, this positive trend does not sustain, as economic profit turns negative again in 2023 (-12,524 million USD) and remains negative in 2024 (-10,937 million USD). These fluctuations suggest an unstable economic performance with occasional periods of profitability interspersed by losses.

Invested Capital

The invested capital shows a generally stable to slightly increasing trend during the period. It begins at 197,314 million USD in 2020 and declines marginally in 2021 to 193,606 million USD. Subsequently, invested capital increases in 2022 to 212,342 million USD and stabilizes at around 212,337 million USD in 2023. By 2024, there is a slight decrease to 208,395 million USD. Overall, the invested capital remains in a narrow range above 190,000 million USD, indicating consistent capital investment levels with minor fluctuations.

Economic Spread Ratio

The economic spread ratio, expressed as a percentage, mirrors the fluctuations observed in economic profit. Starting with a highly negative value of -18.48% in 2020, it improves considerably to -4.42% in 2021. The ratio reaches a positive 4.6% in 2022, reflecting a period where returns on capital exceeded the cost of capital. However, the ratio declines again sharply to -5.9% in 2023 and slightly improves to -5.25% in 2024, indicating that the company’s returns failed to cover the cost of capital in these latter years. This pattern demonstrates inconsistent value creation relative to the invested capital.

The financial data reveals several noteworthy trends over the five-year period under review.

Economic Profit

The economic profit experienced significant fluctuations during the period. In 2020, the company reported a substantial economic loss of -36,455 million US dollars, which improved dramatically in 2021 to a negative value of -8,560 million. By 2022, the economic profit turned positive, reaching 9,758 million US dollars. However, the following two years witnessed a reversion to negative economic profits of -12,524 million in 2023 and -10,937 million in 2024, indicating challenges in sustaining profitability beyond 2022.

Sales and Other Operating Revenues

The company showed a consistent growth pattern in sales and other operating revenues from 2020 through 2022, increasing from 94,471 million US dollars to 235,717 million US dollars. This trend suggests a robust revenue expansion phase. Nevertheless, in 2023 and 2024, revenues declined to 196,913 million and 193,414 million US dollars, respectively, implying a slowdown or contraction in sales that may have impacted overall performance.

Economic Profit Margin

The economic profit margin, expressed as a percentage, mirrors the trend observed in economic profit values. The margin was deeply negative at -38.59% in 2020, improved significantly to -5.5% in 2021, and briefly turned positive at 4.14% in 2022. After reaching this positive margin, it reverted to negative territory, with -6.36% in 2023 and -5.65% projected for 2024. This pattern signals temporary profitability improvement in 2022 followed by a return to economic losses relative to sales.

In summary, the data depicts a volatile financial performance with a peak in 2022 characterized by positive economic profit and margins coinciding with the highest sales level. The subsequent decline in sales and reversion to negative economic profit margins in 2023 and 2024 reflect emerging challenges that may warrant strategic review to restore sustained profitability.