Measuring Firm Performance

Financial Performance
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Introduction
Exxon Mobil is one of the largest international companies dealing with the trade of oil and Gas. The Company has adopted the use of technology and innovation to meet the growing energy need in various parts of the world. Through various initiatives which have been put in place by the company management, the company has been able to improve in it’s the performance on the financial statements (Alo, Akosile & Ayoola, 2016). The performance of the company has been analyzed for various years to show the performance of the company. This report examined the Exxon Mobil Return on Equity Ratio and Current Ratio. The analysis will focus on the year 2016 and 2017.
Return on Equity (ROE)
This ratio helps in measuring the profitability on how many dollars the company can generate using shareholders money. This is calculated by the following formula: –
ROE = Net income/Shareholders equity
2017 = 19,710 /194,500
= 10.1%
2016 = 7,840/ 173,830
= 4.51%
From the ROE calculated above, it is clear that the return on equity improves in 2017 compared with 2016. This is an overall improvement by 5.62% which is a remarkable improvement regarding the dollars generated by shareholders.

This is presented in the graph above.
Current Ratio (CR)
This ratio measures the company liquidity, that’s is the ability to pay both the short term and long-term liability (Alo, Akosile & Ayoola, 2016). This ratio is calculated using the following formula: –
Current ratio = Total assets/Total Liability
2017= 348,691/154,191
= 2.

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2016 = 330,314/156,484
= 2.11
For the two years, the liquidity ratio is two and above indicating that the company can pay its debts twice hence the company is liquid.
Reference
Alo, E. A., Akosile, A. I., & Ayoola, A. O. (2016). The Statistical Evaluation of the Performance of Financial Ratio Analysis in Nigerian Manufacturing Industry: An Empirical Study of Guinness Nigeria PLC. The International Journal of Business & Management, 4(1), 295.