Exxon Financial Analysis
Expense Tracking and Controls
XOM
Rating: 7
Reasoning: After looking at Exxon 's financials and their expense controls they are looking pretty good. When it comes to the expenses they have had a steady decrease in the past three years, which has had a positive outlook on their operating margin. Their current operating margin is 11%, which as a whole two points higher than the industry average, which is 9% (XOM Competitors). This shows that as a company as a whole they are proving to be more profitable than their industry as a whole. Having lower operating expenses as a company allows you to become more profitable. Exxon has been able to put in place some controls for being able to maintain their expenses in order to stay profitable. Major …show more content…
Their current operating margin is 26% which is very high and showing great profitability for the company (MON Competitors). This number is very good compared to their industry as a whole which has an industry average of only 10%. When looking also at their operating expenses for the last three years they have been able to stay pretty consistent as of the past three years. Being able to keep your expenses consistent from year to year is a great way for a company to project your profitability. In order to control expenses MON is able to use a hedging strategy for short-term changes in commodity pricing (Monsanto 10k form). This allows them to provide insurance against themselves in case a negative event occurs. This is a great way for a company to make sure that they are protected against any unforeseen expenses in the future. Monsanto is labeled as a 9 because they have the highest operating margin as compared to their industry average and they have the greatest controls for their …show more content…
Looking into the expenses of the past three years they have showed a consistent increases which has lead to a operating margin of 7% (BA Competitors). This compared to an 11% operating margin for the industry shows that they are less profitable than their industry as a whole currently. Even thought they do have some controls in place to try and keep their operating expenses down it is hard for this industry because of what they do. Boeing has in place an effort to decrease the cost to build some of their aircrafts by reorganizing its plants for greater efficiency and renegotiating contracts with their suppliers and labor unions (The Boeing Company 2013 Annual Report). The better implementation of these expense controls will be able to better benefit them in the future. Boeing is labeled a 4, the lowest out of all the companies because they have shown an increase in expenses over the last three years which the other companies have not as well as not having the best controls in place for their company to improve this in the
XOM
Rating: 7
Reasoning: After looking at Exxon 's financials and their expense controls they are looking pretty good. When it comes to the expenses they have had a steady decrease in the past three years, which has had a positive outlook on their operating margin. Their current operating margin is 11%, which as a whole two points higher than the industry average, which is 9% (XOM Competitors). This shows that as a company as a whole they are proving to be more profitable than their industry as a whole. Having lower operating expenses as a company allows you to become more profitable. Exxon has been able to put in place some controls for being able to maintain their expenses in order to stay profitable. Major …show more content…
Their current operating margin is 26% which is very high and showing great profitability for the company (MON Competitors). This number is very good compared to their industry as a whole which has an industry average of only 10%. When looking also at their operating expenses for the last three years they have been able to stay pretty consistent as of the past three years. Being able to keep your expenses consistent from year to year is a great way for a company to project your profitability. In order to control expenses MON is able to use a hedging strategy for short-term changes in commodity pricing (Monsanto 10k form). This allows them to provide insurance against themselves in case a negative event occurs. This is a great way for a company to make sure that they are protected against any unforeseen expenses in the future. Monsanto is labeled as a 9 because they have the highest operating margin as compared to their industry average and they have the greatest controls for their …show more content…
Looking into the expenses of the past three years they have showed a consistent increases which has lead to a operating margin of 7% (BA Competitors). This compared to an 11% operating margin for the industry shows that they are less profitable than their industry as a whole currently. Even thought they do have some controls in place to try and keep their operating expenses down it is hard for this industry because of what they do. Boeing has in place an effort to decrease the cost to build some of their aircrafts by reorganizing its plants for greater efficiency and renegotiating contracts with their suppliers and labor unions (The Boeing Company 2013 Annual Report). The better implementation of these expense controls will be able to better benefit them in the future. Boeing is labeled a 4, the lowest out of all the companies because they have shown an increase in expenses over the last three years which the other companies have not as well as not having the best controls in place for their company to improve this in the