Exxon Mobil Case Study

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Standard Oil Company was established in 1870 by John D. Rockefeller in Ohio (Exxon). Not too long after, in 1879 Standard bought three-quarters of Vacuum Oil company, which later became Mobil (Exxon). Three years later in 1882, Rockefeller formed Standard Oil into a trust which included the Standard Oil Company of New Jersey, which later became Exxon, as well as Vacuum, and many others (Exxon). However, following a Supreme Court decision the company was split into 34 unrelated businesses in 1911 (Exxon). At the end of the century in 1999, the two companies merged back together and are now formally known as ExxonMobil (Exxon). In recent news, ExxonMobil had two of the largest oil discoveries in the Gulf of Mexico in the last decade using a deep-water …show more content…
Neither one of them is over one, which indicates they won’t be able to pay debts well. Implications from this are that they won’t be able to take on many new assets without raising their current liabilities which they are already behind on. If they add more assets, they’ll add more liabilities and fall further behind in debt. This is not good for potential investors since they normally look to have a current ratio of two (YCharts). Secondly, major implications can arise from a high debt to equity ratio including their cost to borrow money will go up dramatically because they will be seen as riskier. This, in turn, will drop their stock price as their debt to equity becomes higher. Also, when investing in a company, many people look for a company with a ratio of .3-.6 (Investopedia). Finally, the return on assets for Exxon was better for investors because Chevron had a negative net income. The return on assets for Exxon wasn’t great either though for being the top oil company in the world (Morning Star), compared to other companies who lead their industry. Implications of a low or negative return on assets are that you made no money which isn’t great for investors, so it’ll cause them to leave your company and take their money …show more content…
Operational hazards are important because in the industry employees are exposed to many different harmful chemicals, as well as long work hours which will drastically affect their health. Over 95% of oil and gas companies cited that operational factors were a risk (EnergyDigital). While working on oil rigs or wells, workers are exposed to hydrogen sulfide (OSHA). This affects them in a way which causes them to have nausea, headaches, tremors, and skin and eye irritant. Other chemicals employees face while on the job include Crystalline Silica. This is more harmful in that is causes silicosis, lung cancer, kidney disease, and chronic obstructive pulmonary disease (OSHA). Out of all of these, silicosis is incurable which places a high risk on the workers and Exxon(OSHA). This risk falls in one of the top risks because it’s almost inevitable. Exposure to Crystalline Silica comes from cutting into rocks, stone, or brick (OSHA). They Also, exposure to industrial sand causes this disease too (OSHA). Workers also typically work 12-14 hours shifts, which can lead to fatigue (NPR). On top of that, the fatality rate among employees at oil and gas companies are eight times higher than the national average, 3.2 (NPR). To address this risk, Exxon should routinely check the health of their employees who are exposed to these harmful chemicals. By

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