Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Marathon Petroleum Corp., profitability ratios
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
The financial data reveals notable fluctuations and recovery trends across key profitability and return metrics over the five-year span.
- Gross Profit Margin
- Starting at 11.06% in 2019, the gross profit margin decreased significantly to 5.8% in 2020, indicating diminished profitability at the gross level during that year. Thereafter, a recovery trend is evident, with the margin increasing to 8.31% in 2021 and further rising to reach a peak of 14.53% in 2022 before slightly declining to 13.35% in 2023. Overall, the margin shows resilience and improvement following the downturn in 2020.
- Operating Profit Margin
- Operating profitability experienced a sharp negative impact in 2020, plunging from 4.5% in 2019 to -17.55%. This reflects operational challenges or extraordinary expenses during that year. Subsequent years show recuperation, with the margin rebounding to 3.58% in 2021 and further improving to 12.1% in 2022. In 2023, it decreased moderately to 9.78%, maintaining a solid positive margin above pre-2020 levels.
- Net Profit Margin
- The net profit margin also mirrors the adverse effects in 2020, dropping from a positive 2.13% in 2019 to a negative margin of -14.08%, suggestive of overall net losses. Recovery ensued with margins of 8.12% in 2021 and around 8.18% in 2022, before a slight decline to 6.52% in 2023. The data indicate improved bottom-line performance after the 2020 dip, yet the margin is somewhat lower than the gross and operating profit margins, denoting non-operating factors or costs impacting net results.
- Return on Equity (ROE)
- This metric displayed the most extreme volatility, with a drastic fall from 7.83% in 2019 to -44.26% in 2020, highlighting a severe erosion of shareholder value during that year. However, there was a remarkable rebound in 2021 to 37.16%, followed by further considerable increases to 52.38% in 2022. In 2023, although the ROE declined to 39.67%, it remained substantially higher than in earlier periods, indicating strong profitability relative to equity after the 2020 crisis.
- Return on Assets (ROA)
- ROA decreased from 2.68% in 2019 to -11.54% in 2020, evidencing an asset utilization inefficiency or losses in 2020. A substantial recovery occurred in the following years, climbing to 11.41% in 2021 and peaking at 16.15% in 2022. The ratio fell to 11.26% in 2023 but remained significantly improved compared to the pre-2020 and 2020 figures, highlighting enhanced asset profitability in the later years.
In summary, 2020 was a notably challenging year across all examined financial metrics, with negative margins and returns indicating operational and financial stress. From 2021 onwards, there is a clear pattern of recovery and improvement, with profitability and efficiency measures surpassing earlier levels by 2022, followed by slight moderation in 2023. The data imply successful mitigation of the earlier adverse impacts and a return to more robust financial performance thereafter.
Return on Sales
Return on Investment
Gross Profit Margin
Marathon Petroleum Corp., gross profit margin calculation
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Gross profit margin = 100 × Gross margin ÷ Sales and other operating revenues
= 100 × 19,813 ÷ 148,379 = 13.35%
The financial data reveals notable fluctuations in key performance indicators over the five-year period ending December 31, 2023.
- Gross margin
- The gross margin experienced significant variability. Starting at 13,706 million US dollars in 2019, it sharply declined to 4,046 million in 2020, likely reflecting external economic pressures or operational challenges. Subsequently, it recovered to 9,975 million in 2021 and surged to a peak of 25,782 million in 2022, indicating marked improvement or favorable market conditions. However, in 2023, it decreased to 19,813 million, suggesting some contraction but still sustained relatively high levels compared to earlier years.
- Sales and other operating revenues
- Sales and other operating revenues showed a parallel trend to gross margin, beginning at 123,949 million US dollars in 2019. There was a steep drop to 69,779 million in 2020, aligning with the gross margin decline. Revenues then increased substantially over the next two years, reaching 119,983 million in 2021 and peaking at 177,453 million in 2022. In 2023, revenues declined to 148,379 million but remained above pre-pandemic levels, indicating resilient business activity despite some recent contraction.
- Gross profit margin (%)
- The gross profit margin percentage highlights efficiency trends within the revenues and cost structure. It dropped significantly from 11.06% in 2019 to 5.8% in 2020, reflecting reduced profitability during that period. Margins improved steadily to 8.31% in 2021 and rose substantially to 14.53% in 2022, signifying enhanced cost control or pricing power. By 2023, the margin slightly declined to 13.35%, maintaining a relatively strong profitability position compared to earlier years.
Overall, the data illustrates a sharp impact on financial performance in 2020, followed by a strong recovery phase during 2021 and 2022. The reduction in both gross margin and revenues in 2023 suggests caution, though profitability measures remain above earlier periods, signaling the company’s underlying operational strength despite recent softening.
Operating Profit Margin
Marathon Petroleum Corp., operating profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Income (loss) from operations | 14,514) | 21,469) | 4,300) | (12,247) | 5,576) | |
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 9.78% | 12.10% | 3.58% | -17.55% | 4.50% | |
| Benchmarks | ||||||
| Operating Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 15.37% | 21.42% | 14.81% | -6.22% | — | |
| ConocoPhillips | 30.57% | 36.80% | 29.84% | -12.74% | — | |
| Exxon Mobil Corp. | 16.24% | 19.82% | 11.91% | -14.85% | — | |
| Occidental Petroleum Corp. | 24.21% | 38.32% | 17.59% | -79.89% | — | |
| Operating Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 17.63% | 23.01% | 14.73% | -15.83% | — | |
| Operating Profit Margin, Industry | ||||||
| Energy | 17.57% | 22.71% | 14.61% | -18.01% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Operating profit margin = 100 × Income (loss) from operations ÷ Sales and other operating revenues
= 100 × 14,514 ÷ 148,379 = 9.78%
2 Click competitor name to see calculations.
The financial data reflects notable fluctuations in the company's operational performance and revenue generation over the analyzed years. The income from operations experienced significant volatility, with a substantial loss recorded in 2020 followed by recovery and growth in subsequent years. Sales and operating revenues demonstrated a sharp decline in 2020, likely influenced by external factors, but rebounded strongly in 2021 and peaked in 2022 before slightly declining in 2023.
- Income (loss) from operations
- The income from operations showed a decline from a positive value in 2019 to a significant loss in 2020, highlighting a challenging operating environment that year. However, there was a recovery in 2021 with positive income returning. This trend continued with a substantial increase in 2022, reaching a peak, before experiencing a decrease in 2023, though still maintaining profitability above pre-2020 levels.
- Sales and other operating revenues
- The sales figures declined sharply in 2020 compared to 2019, suggesting reduced business activity or market demand during that period. The data shows a robust recovery in 2021, with revenues nearing pre-2020 levels, followed by an even more pronounced increase in 2022. The following year, 2023, saw a decrease in sales, though the level remained significantly higher than the low point in 2020.
- Operating profit margin
- The operating profit margin followed a similar pattern to income from operations. Starting with moderate profitability in 2019, it shifted to a negative margin in 2020, reflecting operational challenges. Margins then improved steadily over the next two years, reaching a high point in 2022. In 2023, the margin decreased but remained positive and notably above the level observed in 2019.
Overall, the data indicates a period of operational difficulty in 2020 followed by recovery and growth in the subsequent years. Despite the decline in some metrics in 2023 compared to the peak in 2022, the company maintained improved profitability and revenue relative to the pre-2020 period. The fluctuations highlight potential exposure to external shocks but also suggest resilience and capacity for operational recovery.
Net Profit Margin
Marathon Petroleum Corp., net profit margin calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Sales and other operating revenues | 148,379) | 177,453) | 119,983) | 69,779) | 123,949) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 6.52% | 8.18% | 8.12% | -14.08% | 2.13% | |
| Benchmarks | ||||||
| Net Profit Margin, Competitors2 | ||||||
| Chevron Corp. | 10.85% | 15.05% | 10.04% | -5.87% | — | |
| ConocoPhillips | 19.52% | 23.80% | 17.63% | -14.38% | — | |
| Exxon Mobil Corp. | 10.76% | 13.98% | 8.33% | -12.57% | — | |
| Occidental Petroleum Corp. | 16.62% | 36.32% | 8.95% | -83.28% | — | |
| Net Profit Margin, Sector | ||||||
| Oil, Gas & Consumable Fuels | 11.86% | 16.44% | 9.73% | -14.70% | — | |
| Net Profit Margin, Industry | ||||||
| Energy | 11.90% | 16.28% | 9.67% | -16.81% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
Net profit margin = 100 × Net income (loss) attributable to MPC ÷ Sales and other operating revenues
= 100 × 9,681 ÷ 148,379 = 6.52%
2 Click competitor name to see calculations.
The financial data indicates considerable fluctuations in the company's profitability and revenue over the recent five-year period.
- Net Income (Loss) Attributable to MPC:
-
The net income shows significant volatility. In 2019, the company reported a positive net income of $2,637 million, followed by a drastic loss of $9,826 million in 2020. This loss was then reversed in 2021 with a net income of $9,738 million, which further increased to a peak of $14,516 million in 2022, before dropping again to $9,681 million in 2023.
- Sales and Other Operating Revenues:
-
Revenues experienced a substantial drop in 2020 compared to 2019, decreasing from approximately $123.9 billion to $69.8 billion. Subsequently, revenues rebounded strongly to $119.9 billion in 2021 and further surged to $177.5 billion in 2022 before declining to $148.4 billion in 2023. This pattern indicates high sensitivity to external market conditions or operational factors.
- Net Profit Margin:
-
The net profit margin reflects the trends seen in net income, with negative performance in 2020 (-14.08%) followed by recovery in the subsequent years. Margins improved to 8.12% in 2021, remained relatively stable at 8.18% in 2022, and declined moderately to 6.52% in 2023. Despite the fluctuations, profitability margins after 2020 indicate some restoration of operational efficiency.
Overall, the analysis highlights notable instability during the 2020 period, likely due to external shocks or disruptions. Recovery phases demonstrate resilience with increased revenues and profitability, although the decline in 2023 suggests ongoing challenges impacting earnings and margin sustainability.
Return on Equity (ROE)
Marathon Petroleum Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Total MPC stockholders’ equity | 24,404) | 27,715) | 26,206) | 22,199) | 33,694) | |
| Profitability Ratio | ||||||
| ROE1 | 39.67% | 52.38% | 37.16% | -44.26% | 7.83% | |
| Benchmarks | ||||||
| ROE, Competitors2 | ||||||
| Chevron Corp. | 13.28% | 22.27% | 11.24% | -4.21% | — | |
| ConocoPhillips | 22.23% | 38.91% | 17.79% | -9.05% | — | |
| Exxon Mobil Corp. | 17.58% | 28.58% | 13.67% | -14.28% | — | |
| Occidental Petroleum Corp. | 15.52% | 44.22% | 11.42% | -79.85% | — | |
| ROE, Sector | ||||||
| Oil, Gas & Consumable Fuels | 16.40% | 28.49% | 13.14% | -13.50% | — | |
| ROE, Industry | ||||||
| Energy | 16.59% | 28.13% | 13.12% | -16.04% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROE = 100 × Net income (loss) attributable to MPC ÷ Total MPC stockholders’ equity
= 100 × 9,681 ÷ 24,404 = 39.67%
2 Click competitor name to see calculations.
The financial data reveals significant fluctuations in net income and key equity metrics over the analyzed period from 2019 to 2023.
- Net Income (Loss) Attributable to MPC
- The net income experienced a sharp decline in 2020, recording a substantial loss of 9,826 million USD after posting a profit of 2,637 million USD in 2019. This drastic shift indicates a challenging environment or operational setbacks during 2020. However, a remarkable recovery followed, with net income surging to 9,738 million USD in 2021 and further increasing to 14,516 million USD in 2022. In 2023, net income decreased but remained strong at 9,681 million USD, indicating sustained profitability though with some volatility.
- Total MPC Stockholders’ Equity
- Stockholders' equity declined from 33,694 million USD in 2019 to 22,199 million USD in 2020, likely reflecting the net loss incurred and possible other equity adjustments. The equity base showed gradual recovery over the subsequent years, increasing to 26,206 million USD in 2021 and further to 27,715 million USD in 2022, before decreasing to 24,404 million USD in 2023. This pattern suggests partial restoration of financial strength, though the 2023 drop may indicate distributions, losses, or other equity-reducing activities.
- Return on Equity (ROE)
- ROE mirrored the net income trend, declining steeply from 7.83% in 2019 to a negative 44.26% in 2020, corresponding to the significant net loss. ROE rebounded strongly in 2021 reaching 37.16%, and continued to improve to 52.38% in 2022, conveying efficient utilization of equity during these years. In 2023, ROE declined to 39.67%, signaling a decrease in profitability relative to equity but remaining at a relatively high return level.
Overall, the data reflects a period of financial distress in 2020 followed by a recovery phase with robust profitability and partial rebuilding of equity through 2023. The volatility in net income and equity metrics highlights sensitivity to external or internal factors impacting the company's financial performance. Despite fluctuations, the company demonstrated resilience with strong returns on equity in the latter years analyzed.
Return on Assets (ROA)
Marathon Petroleum Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to MPC | 9,681) | 14,516) | 9,738) | (9,826) | 2,637) | |
| Total assets | 85,987) | 89,904) | 85,373) | 85,158) | 98,556) | |
| Profitability Ratio | ||||||
| ROA1 | 11.26% | 16.15% | 11.41% | -11.54% | 2.68% | |
| Benchmarks | ||||||
| ROA, Competitors2 | ||||||
| Chevron Corp. | 8.17% | 13.76% | 6.52% | -2.31% | — | |
| ConocoPhillips | 11.42% | 19.91% | 8.91% | -4.31% | — | |
| Exxon Mobil Corp. | 9.57% | 15.10% | 6.80% | -6.74% | — | |
| Occidental Petroleum Corp. | 6.35% | 18.32% | 3.09% | -18.52% | — | |
| ROA, Sector | ||||||
| Oil, Gas & Consumable Fuels | 9.04% | 15.53% | 6.59% | -6.36% | — | |
| ROA, Industry | ||||||
| Energy | 9.02% | 15.14% | 6.48% | -7.40% | — | |
Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).
1 2023 Calculation
ROA = 100 × Net income (loss) attributable to MPC ÷ Total assets
= 100 × 9,681 ÷ 85,987 = 11.26%
2 Click competitor name to see calculations.
- Net income (loss) attributable to MPC
- The net income demonstrated considerable volatility over the analyzed period. Starting at a positive value in 2019, it experienced a significant loss in 2020, reflecting substantial operational or market challenges during that year. Subsequently, the company returned to profitability in 2021, with net income rising sharply and further increasing in 2022. However, in 2023, net income decreased relative to the previous year, indicating some pressure on earnings but remaining positive overall.
- Total assets
- Total assets decreased notably from 2019 to 2020, suggesting a reduction in asset base or divestitures, and then remained relatively stable through 2021 and 2022 with a slight recovery in 2022. In 2023, total assets declined again, pointing to either asset sales, depreciation, or other factors impacting the asset base in the most recent year.
- Return on Assets (ROA)
- The return on assets mirrored the fluctuations observed in net income, starting with a moderate positive return in 2019. It turned strongly negative in 2020, consistent with the net loss incurred that year. The ROA rebounded sharply in 2021 and improved further in 2022, reaching its highest point during the period. In 2023, ROA decreased but remained solidly positive, indicating sustained profitability relative to asset base despite some decline from the peak.