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Exxon Mobil Corporation

Introduction: Exxon corporation was founded in the year 1870, however in 1999 it changed its name to Exxon Mobil corporation after merging with Mobil, in 2007 the company was ranked as the largest company in terms of it revenue, it is a fortune 500 company whose business include exploration and the production of petroleum products. The company operates in Canada, US, South America and other regions and has over 16,000 wells in these regions, according to the 2007report the company employs over 106,000 employees and has been ranked one of the best in terms of divided earnings.

This company has a comparative advantage over its competitors due to economies of scale that help in reducing production costs and also technological advantage that helps in reducing these costs through optimal drilling and pipelines used in transporting their products, this paper discusses financial ratios of Exxon Mobil that will help in determining the companies profitability, return on equity, return on assets, liquidity and leverage. Liquidity:

The company has maintained a good liquidity position, some of the ratios that show the liquidity position of the company include the current ratio, the cash ratio and the cash flow from operation ratio, the current ratio is determined by dividing the current assets by current liabilities, according to the balance sheet as at 31 December 2007 current assets amounted to $85,963,000 while current liabilities amounted to $58,312,000, the current ratio is therefore determined by dividing the current assets by the current liabilities which yield the value of 1.

47, the following table summarizes the current ratio over the years: From the table it is evident that there has been an increase in current assets, also an increase in the current liabilities but the current ratio has declined over the years. The current ratio for the year 2007 is 1. 47 and this means that for every dollar the company owes its creditors it has 1. 47 dollars in form of assets, therefore this ratio has decline but its creditworthiness is still appropriate in the market.