Exxon Mobil
1. Exxon Mobil's nature of business is a natural haven for criticism; reporting record profits for 2005 only added fuel to the fire so to speak. The topic of nearly every conversation around the country had something to do with how much people were shelling out at the pumps or how the cost of most consumer goods was increasing a rate never experienced before; Exxon Mobil's feat did nothing but bring negative attention to the firm. However, Exxon Mobil knew that their profits wouldn't be well accepted by the general public and did its best to do a little damage control by creating charts comparing their profits to other industries, holding press conferences and by trying to educate the public on the costs of running their business by creating small informational advertisements. Yet, no matter how hard they tried, scrutiny was in evitable. Consumers were paying three dollars for a gallon of gas, the media constantly did special reports on the increasing cost of filling our gas tanks, and the Democratic Party constantly ridiculed the Republican's lack of effort to lower the prices of gas.
Exxon Mobil's attempt to justify its profit margin by comparing the profit margins of the oil & natural gas industry to other industries can be compared to a magicians act on stage. It's a game of misdirection that the average citizen wouldn't think twice about. To get a true comparative measure of Exxon Mobil's profit margin you want to calculate Exxon Mobil's profit margin which I calculated to be 10 cents, and compare it to the profit margins of other firms in the same industry. Looking at the chart in Exhibit 2, the oil & natural gas industry has and average return on sales of 5.8 cents, which is 3.2 cents less than Exxon Mobil's true returns. If we put their true figures on this chart they would jump up to the likes of real estate industry, which earns on average 10.8 cents on the dollar. But even comparing Exxon Mobil to these different industries isn't very justifiable because different industries have different operating costs, so to get a better picture of how Exxon Mobil stacks to other firms or industries the ROE should be looked. The ROE shows how well the firms generate money with money that was brought in through equity. An ROE figure has different factors that would be accounted for such as how levered a firm is, how high operating costs are, and how efficient a firm is at generating money with its assets, combined giving you a more accurate picture of a firm's profitability.
Rockefeller was America’s first billionaire, and he was the true epitome of capitalism. Rockefeller was your typical rags-to-riches businessman, and at the turn of the twentieth century, while everyone else in the working class was earning ten dollars max every week, Rockefeller was earning millions. There has been much discussion as to whether Rockefeller’s success was due to being a “robber baron”, or as a “captain of industry”. By definition, a robber baron was an industrialist who exploited others in order to achieve personal wealth, however, Rockefeller’s effect on the economy and the lives of American citizens has been one of much impact, and deserves recognition. He introduced un-seen techniques that greatly modified the oil industry. During the mid-nineteenth century, there was a high demand for kerosene. In the refining process from transforming crude oil to kerosene, many wastes were produced. While others deemed the waste useless, Rockefeller turned it into income by selling them. He turned those wastes into objects that would be useful elsewhere, and in return, he amassed a large amount of wealth. He sold so much “waste” that railroad companies were desperate to be a part of his company. However, Rockefeller demanded rebates, or discounted rates, from the railroad companies, when they asked to be involved with his business. By doing so, Rockefeller was able to lower the price of oil to his customers, and pay low wages to his workers. Using these methods,
During the late 1800's and early 1900's, change in American society was very evident in the economy. An extraordinary expansion of the industrial economy was taking place, presenting new forms of business organization and bringing trusts and holding companies into the national picture. The turn of the century is known as the "Great Merger Movement:" over two thousand corporations were "swallowed up" by one hundred and fifty giant holding companies.1 This powerful change in industry brought about controversy and was a source of social anxiety. How were people to deal with this great movement and understand the reasons behind the new advancements? Through the use of propaganda, the public was enlightened and the trusts were attacked. Muckraking, a term categorizing this type of journalism, began in 1903 and lasted until 1912. It uncovered the dirt of trusts and accurately voiced the public's alarm of this new form of industrial control. Ida Tarbell, a known muckraker, spearheaded this popular investigative movement.2 As a journalist, she produced one of the most detailed examinations of a monopolistic trust, The Standard Oil Company.3 Taking on a difficult responsibility and using her unique journalistic skills, Ida Tarbell was able to get to the bottom of a scheme that allowed the oil industry to be manipulated by a single man, John D. Rockefeller.
The Gilded Age refers to a period in which things were fraudulent and deceitful; the surface was clinquant while underneath that lustrous coat laid corruption. During the Gilded Age companies recruited to corrupt methods to further increase profits, leading to an increase in power, rapid economic prosperity, and domination of industries, leading to monopolistic corporations. As a result, antitrust laws to regulate business began to emerge in the late 19th and early 20th century known as the Progressive Era. Among these companies was Standard Oil, which was founded in 1870 by John D. Rockefeller; in 1880, Standard Oil was responsible for refining 90 percent of America’s oil and between 1880-1910, dominating the oil industry (Marshall). The lack of intervention from the government and regulations impeding monopolistic practices allowed Standard Oil to
None of the competition knew what the rates were for the rebates or the rates that Rockefeller was paying the railroad. This made it hard for the competition to keep up with the Standard Oil Company. The consequences led to many oil companies being secretly bought out by Rockefeller. All in all, 25 companies surrendered to Rockefeller's relentless expansion, which was 20% of the oil industry in America.... ...
Imperial Oil ltd. Limited (Esso) is a Canadian public corporation that produces crude oil and natural gas. Currently the headquarters are based out of Calgary, Alberta employing over 5000 people, with Exxon Mobil owning 69.6 percent of the company. Imperial Oil ltd. was previously located in Toronto and has recently moved all main facilities over to the Calgary, Alberta headquarters.1 Esso was incorporated in London, ON in 1880 and became a land mark in the development of crude oil and natural gases.1 Its retail business consists of service stations and "On the Run Express and Tiger Express-brand" convenience stores. Esso also owns a 25% portion of Syncrude, which are the world’s largest oil sands.1
In terms of Equity Financing strategies, Exxon is implementing a continuous stock repurchase program rather than equity financing. In the first half of 2007, Exxon’s gross share purchases were worth $16 billion, reducing the shares outstanding by 3.2 percent. In 2006, Exxon Mobil paid out 1.77 percent of its stock price in dividends, about equal to the dividend yield for the entire S&P 500. Factoring in the $29.6 billion Exxon Mobil spent on buybacks that year, its yield jumps to 8.64 percent. Public companies share the wealth with investors mainly through dividends and stock buybacks, and both actions have historically benefited investor returns. Since both types of yield signify added value to shareholders, investors should be able to improve their odds in the market by harnessing the power of both statistics. Buybacks benefit shareholders by reducing the amount of stock, giving each remaining share a bigger slice of a company's earnings. Although U.S. policymakers claim that the company does not invest enough in new pumping capacity and spends too much on share buybacks, CEO Rex Tillerson reports that company disagrees with claims.
One of the Gilded Age’s most prominent well-known philanthropist’s, John D. Rockefeller, had a lasting effect in the United States. He was America’s first ever billionaire. Rockefeller entered the oil business by first investing on an oil refinery in Cleveland, Ohio in 1863. He established his own oil company named “Standard Oil”, which controlled nearly 90 percent of America’s oil refineries by the 1880’s. At first, Rockefeller borrowed money from some of his buddy’s to buy out some stocks and take control of his first refinery in Ohio. He then formed the “Standard Oil Company” along with his brother William Rockefeller and other groups of men, John D. Rockefeller was the largest shareholder of the company. Standard oil was a monopoly in the oil industry for buying other refineries who were competition to Standard oil in order to distribute and market there oil around the globe. Standard oil even went as far as making their own oil barrels and employed scientists to develop other uses for kerosene and petroleum products. John D. Rockefeller was viewed as a target of “muckraking” by journalists, who viewed him as a monopoly giant setting up a monopolistic company in America which helped build his vast oil empire. Critics accused Rockefeller of engaging unethical practices such as competitive pricing when it came to products and negotiating with railroads to eliminate his competitors. The United States Supreme Court wou...
During the mid 2000’s until late 2012, media mogul Rupert Murdoch’s newspaper company, News Corp, conceived one the biggest scandals in media history to date. Speculation of phone hacking occurred in November of 2005 when the Royal’s officials reported possible voice mail phone hacking to the police because News of the World released a story about Prince William hurting his knee. The victims of the phone hacking scandal not only included the Royal family but also politicians, celebrities, people who were murdered, and family members of soldiers who died during combat totaling the victim list to 3,870. The entire duration of the investigation revealed not only disturbing information about the conducts committed by journalist, but the conspiring with private investigators and the London police enforcement, also known as the Scotland Yard, to cover up corruptions on all ends (CNN, 2012).
Exxon/Mobil, one of the nation’s leading oil producers, has its main refinery located in Beaumont, Texas. Each year, the residents of Beaumont/Port Arthur have to contend with the 39,000 pounds of pollution spewed each year by the Exxon refinery. Exxon’s emissions are 385% above the state refinery average. In 1999, the Texas Natural Resources Conservation Committee (TNRCC) allowed the plant to increase their emissions, without allowing the public to have a say in the matter. Interestingly, 95% of the people living near the plant are of African American descent and are in the poverty range. Some believe that this, along with the lack of education in the area, allows Exxon to get away with such high emissions. Residents in nearby neighborhoods have been complaining of headaches, nausea, eye, and throat irritation for years. Since 1997, Mobil has repeatedly violated health standards in its emissions of two key air pollutants: sulfur dioxide and hydrogen sulfide, These “rotten egg” smells are so strong, one can smell it through a car driving past the refinery. After numerous complaints and one record of a refinery worker becoming unconscious because of the fumes, the EPA awarded Exxon with a $100,000 environmental justice grant in October of 1998. Hopefully, Exxon has put the money to good use and cleaned up their emissions.
Kmart was formed in the late 1950's to challenge new forms of discount stores. They are a descendant of an organization Sebastian S. Kresge. The average Kmart store is around 100,000 square feet. In 1987 Kmart was the largest discount retailer in the United States. They currently have 2,223 stores and last year they had over $25 billion in sales which is nearly double that of Wal-Mart. In 1991 they opened their Kmart superstores. The superstore is a 150,000 square feet and is expected to gross $40 to $50 million dollars in revenues. It will also remain open 24 hours a day.
Return on equity (ROE) measures profitability from the stockholders perspective. The ROE is a calculation of the return earned on the common stockholders' investment in the firm. Generally, the higher this return, the better off the stockholders are. Harley Davidson's return on equity was 24.92% for 2001, 24.74% for 2000. They have sustained consistent, positive, returns for their shareholders for the past two years.
the gas prices unfairly in order to make a bigger profit. It's true, gas prices
...o chance of competing with Standard Oil due to all the tactics they employed to keep their prices low. This ravished small town families and had a similar effect as to what Wal-Mart does to family run shops nowadays. Numerous families living in small town America lost their income because of Standard Oil and forced hardship upon many.
To be the number one aerospace company in the world and among the premier industrial concerns in terms of quality, profitability and growth
The analysis of these ratios shows how Ford stands as a company for the past five years. Return on equity (ROE) reveals how much profit a company earned in comparison to the total amount of shareholder equity on the balance sheet. For long-term investing with great rewards, companies that have high return on equity ratios can provide the biggest payoffs. This ratio also tells investors how effectively their capital is being reinvested, so it is a good gauge of management's money handling skills. Ford is showing a considerable turn around in this area this past year, which could easily be due to changes in management. They are also reasonably following the industry in this area.