1. Compare and contrast the limitations and usefulness of the single-step income statement and the multi-step income statement.
A single-step income statement lists all expenses and cos of goods sold in one column; it does not break expenses down into categories. They are all totaled and listed together. Even though the single step income statement lacks in detail, many companies still like to use it because it is easy to prepare and read. To expand, the single step income statement is short and to the point and is a great tool to use for persons who want or only need to see the bottom result. A multi-step income statement lists income and expenses into three main categories with subtotals to give a much better breakdown to the financial reader. The multi-step income statement shows the different sources of income and expenses making it much for detailed for the financial reader. Although the multi-step income statement is more time consuming to prepare it provides a more in-depth financial picture of the company to the creditors and lenders.
2. Analyze the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Of the
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I believe Exxon to a bigger company altogether than Chevron, but Chevron had more growth and is more profitable. Chevron has also had better investment opportunities. The company's exploration program has been highly successful in the Gulf of Mexico, generating a flow of lucrative discoveries. ExxonMobil, on the other hand, is being much more cautious in its investment and development selection. Exxon is looking for quality and sustainability. https://www.fool.com/investing/general/2014/07/14/why-chevron-is-more-successful-than-exxonmobil.aspx Rupert Hargreaves Jul 14,
The company ExxonMobil offers an interesting insight into the inner workings of an oil company because not more than fourteen years ago they were two separate and very successful companies both sitting at the top of the industry. In the year 1980 the two companies bolstered sales revenue that towards the top of their industry. Exxon with 103 million dollars worth of revenue was by far the most dominant beating out the closest competitor, which was Royal Dutch by over thirty million dollars. Mobil Oil was not nearly as dominant in revenue but still bolstered a respectable with 59.5 million dollars worth of profit placing them in the upper half of the industry.1 As the 1980’s went on the oil industry began going through a bit of reconstruction in which efficiency and profit shot to the forefront of the minds of both oil executives and the companies stockholders. As stated by and executive of Exxon, “Exxon confirms its ‘intention to run a tight ship . . . and strive to become the low-cost operator in each area of our business’. Restructuring included the sale of Exxon Office Systems, Reliance Electric Co., and its New York headquarters, and the reorganization into fewer divisions, several of them
Chevron Texaco, or Texaco Shell, is the leading competitor to ExxonMobil. Texaco is in the same areas of business as Exxon. Their petroleum products and lubricants are sold in the same markets, stores, and in many cases opposite street corners from each other. The two companies are very similar, but Exxon’s recent petroleum deals in the Middle East and Africa have allowed its stock price to jump ahead for the time being (1). In the industry, the two companies mainly compete for the ability to negotiate for new production. The competition is not made at the pump or at the local auto store. It seems that it’s more important to control oil than it is to sell it quickly. Because oil has so much value and power in the world, the industry is made of semi-friendly companies. Surviving and making as much profit as possible, is more important than trying to put people out of business.
The purpose of this paper is to define accounting, and identify the four basic financial statements. The paper also explains how the different financial statements are interrelated to each other and why they are useful to managers, investors, creditors, and employees.
Learning Objective: 04-03 Present an income statement with earnings per share, statement of stockholders equity, balance sheet, and statement of cash flows.
The eighth step is one of the most important when doing the accounting cycle. This step is the Financial statements are prepared. The reason why this is the most important is due to a company being able to visually see the net income after all the expenses have been taken
Accounting aspects have been several in amounts. They lay out ground rules for succeeding in
Financial Statements are very important part when running any type of organization. Looking at the statements it provides a very good view in how to understand an organization financially. The balance sheet has three key points: assets, liabilities, and a net assets. When summing the liabilities and net assets should always sum equally to the total assets. Investors will use this type of information in order to determine an organization’s financial conditions. When using the balance sheets it lets the person have a quick review of what the assets, liabilities, and net assets in were they are distributed within the time fame. A single step income statements uses revenues, expenses, and the net income and using the multi-step income statements provide information on how the operating and the non-operating system work. The community hospital had there up and downs between the year 2012
Compare and contrast the limitations and usefulness of the single-step income statement and the multi-step income statement.
From the recent case data, ExxonMobil has not acted irresponsibility in pricing its gasoline products. Outside of the grocery industry, I have not heard of any business segments surviving on less than a 5% profit margin. In reading that ExxonMobil reported only a net profit of 8.5%3, it is difficult to state that the firm over priced its products to reap abnormal profits. Although Mr. Lee Raymond’s $400 million retirement seems grossly out of proportion in utilitarian terms, adding these funds back into the firm’s bottom line would not change the profit results. With profit margins of less than 10%, it is unlikely that ExxonMobil would be able to keep the price of gasoline fixed if sweet crude oil were to increase from $80 per barrel to $88. This 10% increase in raw material cost would have to be passed through to the customer in the form of higher prices for the firm to survive.
Contribution income statement is an income statement that classifies cost by behavior (fixed cost and variable cost). Traditional income statement is sometimes called the functional income statement. It is an income statement prepared in the multiple-step or single –step income statement format which conforms to Generally Accepted Accounting Principles (GAAP) and can be used for external financial reporting. The main difference between the two is that the contribution income statement list variable costs first, followed by fixed costs. Keeping in mind that GAAP and does not permit businesses to use
Formed by the merger of two big oil companies in 1999, Exxon and Mobil, the corporation is now the world’s 8th largest by revenue and third largest publicly traded company by market capitalization. Exxon’s history is the story of two groups; both Exxon and Mobil are descendants of John D. Rockefeller 's Standard Oil Company of Ohio, incorporated as Standard Oil Trust in 1882.
Exxon and Chevron are so different in a number of ways. When you compare Chevron to Exxon, Chevron is a smaller firm. The ratios of Exxon are relatively larger than Chevron's. Nevertheless, Chevron has a got a wide net working capital and market ratio than its counterpart Exxon. This therefore, means that because its larger networking capital, Chevron needs a lot of money
One of the most reputable resources that Exxon Mobil has today is a strong brand name. Exxon Mobil operates all over the world and is recognized in every part of the world (Datamonitor, 2008). When people all over the world know who a company is, what they do, and where they are located, the company gains a unique competitive advantage over
The first one is the income statement – Income statement is a financial statement that
The analysis of Exxon Mobil was performed on its consolidated financial statements in accordance with US GAAP, where all affiliates with more 50% control were included. The company didn’t have discontinued operations in the reported report, so all activities were continuing operations.