Analysis of Profitability Ratios
Profitability ratios measure the company ability to generate profitable sales from its resources (assets).
Profitability Ratios (Summary)
Valero Energy 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).
- Gross Profit Margin
- The gross profit margin demonstrated considerable volatility over the analyzed periods. Starting at 4.41% in 2019, it declined sharply to -1.14% in 2020, indicating a period of negative gross profitability. This was followed by a recovery in 2021 to 2.75%, and a strong improvement in 2022 and 2023, reaching 9.52% and 8.93%, respectively. Overall, the trend shows a significant rebound and stabilization at substantially higher profitability levels compared to the initial years.
- Operating Profit Margin
- The operating profit margin mirrored the gross profit margin's trajectory with a negative value of -2.43% in 2020 after a positive 3.54% in 2019. Subsequently, it recovered to 1.87% in 2021 and achieved robust growth in 2022 and 2023, peaking at 8.9% and slightly decreasing to 8.19%. This indicates improved operational efficiency and cost management after the downturn in 2020.
- Net Profit Margin
- The net profit margin followed a similar pattern, dropping from 2.24% in 2019 to -2.19% in 2020, reflecting a net loss period. Recovery began in 2021 with a positive margin of 0.82%, followed by significant improvement to 6.54% in 2022 and a slight decrease to 6.1% in 2023. This trend suggests an overall recovery in bottom-line profitability post-2020.
- Return on Equity (ROE)
- Return on equity experienced a sharp decline from 11.11% in 2019 to -7.56% in 2020, indicating negative returns to shareholders during that year. A steady recovery ensued, with ROE rising to 5.05% in 2021 before an exceptional increase in 2022 to 48.93%, followed by a decrease to 33.53% in 2023. Despite the decrease in the last period, ROE remains significantly elevated relative to earlier years, indicating enhanced shareholder value creation.
- Return on Assets (ROA)
- Return on assets showed a decline from 4.5% in 2019 to -2.74% in 2020, reflecting reduced asset efficiency. This was followed by progressive improvements: 1.61% in 2021, 18.9% in 2022, and a decrease to 14.01% in 2023. The notable increase in 2022 and maintained elevated levels in 2023 suggest improved utilization of assets to generate earnings after the downturn.
Return on Sales
Return on Investment
Gross Profit Margin
Valero Energy 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 profit (loss) ÷ Revenues, includes excise taxes on sales by certain of foreign operations
= 100 × 12,932 ÷ 144,766 = 8.93%
The financial data indicates considerable fluctuation in performance metrics over the five-year period.
- Gross Profit (Loss)
- The gross profit experienced a significant decline in 2020, turning negative with a loss of 740 million US dollars compared to a profit of 4,778 million US dollars in 2019. This was followed by a recovery phase, with gross profit rising to 3,129 million US dollars in 2021. The upward trend accelerated substantially in 2022, reaching a peak of 16,796 million US dollars, before slightly decreasing to 12,932 million US dollars in 2023. This pattern suggests a sharp impact in 2020, with subsequent rebounds and strong profitability during the last two years analyzed.
- Revenues
- Revenues show a parallel trend with gross profit, initially dropping from 108,324 million US dollars in 2019 to 64,912 million US dollars in 2020, reflecting a considerable contraction. Revenues then surged to 113,977 million US dollars in 2021 and continued growing sharply to 176,383 million US dollars in 2022. A decline was also observed in 2023, with revenues decreasing to 144,766 million US dollars. This movement mirrors volatility in the business environment or market conditions affecting sales volumes or prices.
- Gross Profit Margin
- The gross profit margin follows the same volatile trajectory, starting at 4.41% in 2019, dropping to a negative margin of -1.14% in 2020, indicating an unprofitable year at the gross level. The margin returned to positive territory in 2021 at 2.75%, surged notably to 9.52% in 2022, and slightly declined to 8.93% in 2023. This indicates significant improvements in the cost of goods sold relative to revenues after the dip in 2020, maintaining a substantially higher profitability margin in recent years compared to the start of the period.
Overall, the data reflects a challenging year in 2020, likely due to external or internal disruptions, followed by a recovery and strong growth phase in 2021 and 2022. Despite a slight downturn in 2023, profitability and revenue levels remained elevated compared to the initial years, indicating improved operational performance and market conditions over the medium term.
Operating Profit Margin
Valero Energy 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) | ||||||
| Operating income (loss) | 11,858) | 15,690) | 2,130) | (1,579) | 3,836) | |
| Revenues, includes excise taxes on sales by certain of foreign operations | 144,766) | 176,383) | 113,977) | 64,912) | 108,324) | |
| Profitability Ratio | ||||||
| Operating profit margin1 | 8.19% | 8.90% | 1.87% | -2.43% | 3.54% | |
| 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 × Operating income (loss) ÷ Revenues, includes excise taxes on sales by certain of foreign operations
= 100 × 11,858 ÷ 144,766 = 8.19%
2 Click competitor name to see calculations.
- Operating Income (Loss)
- The operating income experienced significant fluctuations over the given period. In 2019, the company reported a positive operating income of 3836 million USD. However, this was followed by a notable loss of 1579 million USD in 2020, indicating a challenging year. The company regained profitability in 2021 with an operating income of 2130 million USD and saw a substantial improvement in 2022, reaching 15690 million USD. In 2023, operating income slightly decreased to 11858 million USD but remained considerably higher than pre-2022 levels.
- Revenues (Including Excise Taxes)
- Revenues displayed volatility consistent with the fluctuations in operating income. Starting at 108324 million USD in 2019, revenue dropped sharply to 64912 million USD in 2020, likely reflecting adverse market conditions. There was a strong recovery in 2021, with revenues rising to 113977 million USD, followed by a pronounced increase to 176383 million USD in 2022. In 2023, revenues decreased to 144766 million USD, though they remained well above the 2019 level.
- Operating Profit Margin
- The operating profit margin mirrored the trends in operating income and revenue. It was positive but moderate at 3.54% in 2019, then turned negative at -2.43% in 2020, reflecting the operating loss that year. The margin recovered to 1.87% in 2021, before improving sharply to 8.9% in 2022. In 2023, there was a slight reduction to 8.19%, which still indicates a strong operational performance compared to earlier years.
- Summary
- The overall financial performance indicates a period of volatility with a significant downturn in 2020, likely due to external economic or industry-specific factors. Following this, there was a strong recovery phase in 2021 and exceptional growth in 2022, as reflected in substantially increased operating income, revenue, and profit margins. Although 2023 showed some decline from the peak of 2022, performance metrics remained robust and considerably above pre-2020 levels, suggesting a stabilizing trend at a higher level of operational and financial efficiency.
Net Profit Margin
Valero Energy 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 Valero Energy Corporation stockholders | 8,835) | 11,528) | 930) | (1,421) | 2,422) | |
| Revenues, includes excise taxes on sales by certain of foreign operations | 144,766) | 176,383) | 113,977) | 64,912) | 108,324) | |
| Profitability Ratio | ||||||
| Net profit margin1 | 6.10% | 6.54% | 0.82% | -2.19% | 2.24% | |
| 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 Valero Energy Corporation stockholders ÷ Revenues, includes excise taxes on sales by certain of foreign operations
= 100 × 8,835 ÷ 144,766 = 6.10%
2 Click competitor name to see calculations.
- Net income (loss) attributable to Valero Energy Corporation stockholders
- The net income experienced a significant fluctuation over the five-year period. In 2019, the company reported a positive net income of $2,422 million. However, in 2020, this figure turned negative, with a loss of $1,421 million, indicating a challenging year likely influenced by external factors. Recovery began in 2021 with a return to profitability at $930 million. This positive trend accelerated sharply in 2022, when net income surged to $11,528 million, the highest value in the period under review. In 2023, net income moderated somewhat but remained robust at $8,835 million, reflecting continued strong financial performance.
- Revenues, includes excise taxes on sales by certain foreign operations
- Revenue showed considerable volatility corresponding to market conditions across the analyzed years. Starting from $108,324 million in 2019, revenues declined notably in 2020, falling to $64,912 million, likely due to reduced demand or operational constraints. A recovery phase followed in 2021 with revenues rising back to $113,977 million. The revenue peak occurred in 2022, reaching $176,383 million, suggesting a period of robust sales or favorable market pricing. In 2023, revenues decreased to $144,766 million, indicating a partial retreat but maintaining levels substantially higher than those of 2019 and 2021.
- Net profit margin
- The net profit margin mirrored fluctuations observed in net income and revenue. It started at a modest 2.24% in 2019 before falling into negative territory at -2.19% in 2020, aligning with the net loss reported that year. Margins improved in 2021, turning positive at 0.82%, reflecting modest profitability. A significant margin expansion was noted in 2022, reaching 6.54%, indicative of improved operational efficiency or pricing power. In 2023, the margin slightly decreased to 6.1% but remained significantly higher than the levels before 2022, demonstrating sustained profitability strength.
Return on Equity (ROE)
Valero Energy Corp., ROE calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Valero Energy Corporation stockholders | 8,835) | 11,528) | 930) | (1,421) | 2,422) | |
| Total Valero Energy Corporation stockholders’ equity | 26,346) | 23,561) | 18,430) | 18,801) | 21,803) | |
| Profitability Ratio | ||||||
| ROE1 | 33.53% | 48.93% | 5.05% | -7.56% | 11.11% | |
| 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 Valero Energy Corporation stockholders ÷ Total Valero Energy Corporation stockholders’ equity
= 100 × 8,835 ÷ 26,346 = 33.53%
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Stockholders
- The net income has demonstrated considerable volatility over the analyzed period. In 2019, the company reported a positive net income of $2,422 million, which turned into a significant loss of $1,421 million in 2020. Following this downturn, net income rebounded to $930 million in 2021 and then surged substantially to $11,528 million in 2022, before slightly declining to $8,835 million in 2023. This fluctuation reflects a recovery and strong growth phase after the challenging financial performance observed in 2020.
- Total Stockholders’ Equity
- The total stockholders’ equity showed a declining trend from 2019 to 2021, decreasing from $21,803 million to $18,430 million. However, equity began to recover in 2022, increasing significantly to $23,561 million and continuing the positive trend into 2023, reaching $26,346 million. This improvement indicates strengthening of the company’s capital base after a period of contraction.
- Return on Equity (ROE)
- The ROE mirrored the volatility observed in net income. It started at 11.11% in 2019, fell to a negative -7.56% in 2020, then improved modestly to 5.05% in 2021. A substantial increase occurred in 2022, with ROE reaching 48.93%, reflecting high profitability relative to equity. Although ROE declined somewhat in 2023, it remained strong at 33.53%, indicating sustained efficient use of equity capital.
- Overall Insights
- The financial data indicate the company experienced significant challenges in 2020, as evidenced by negative net income and ROE along with declining equity. Recovery commenced in 2021 and accelerated markedly through 2022, demonstrating robust profitability and capital growth. Despite a slight reduction in net income and ROE in 2023 compared to 2022, the company maintained strong financial performance and improved equity position relative to earlier years.
Return on Assets (ROA)
Valero Energy Corp., ROA calculation, comparison to benchmarks
| Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Net income (loss) attributable to Valero Energy Corporation stockholders | 8,835) | 11,528) | 930) | (1,421) | 2,422) | |
| Total assets | 63,056) | 60,982) | 57,888) | 51,774) | 53,864) | |
| Profitability Ratio | ||||||
| ROA1 | 14.01% | 18.90% | 1.61% | -2.74% | 4.50% | |
| 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 Valero Energy Corporation stockholders ÷ Total assets
= 100 × 8,835 ÷ 63,056 = 14.01%
2 Click competitor name to see calculations.
- Net Income (Loss) Attributable to Stockholders
- The net income exhibited significant volatility over the analyzed period. In 2019, a positive net income of $2,422 million was recorded, which sharply declined to a loss of $1,421 million in 2020. This loss reversed in subsequent years, with a moderate profit of $930 million in 2021, followed by a substantial increase to $11,528 million in 2022. In 2023, net income decreased but remained strong at $8,835 million, still well above pre-pandemic levels.
- Total Assets
- Total assets demonstrated a consistent upward trend across the five years. The value decreased slightly from $53,864 million in 2019 to $51,774 million in 2020, likely reflecting market or operational impacts during that year. However, assets increased steadily thereafter, reaching $57,888 million in 2021, then $60,982 million in 2022, and further to $63,056 million in 2023, indicating progressive asset growth and potential expansion or investment activity.
- Return on Assets (ROA)
- ROA followed a pattern closely aligned with net income trends. It declined from a positive 4.5% in 2019 to a negative 2.74% in 2020, reflecting the net loss incurred that year. Recovery commenced in 2021 with an ROA of 1.61%, followed by a sharp increase to 18.9% in 2022. In 2023, ROA decreased to 14.01%, which, while lower than the previous year, still represented a strong return on asset utilization compared to the earlier years.