1. Chevron Greg Hines ACG2021.003

2. Executive Summary Chevron has had a great year, they have increased their sales greatly from the previous year. They are making many advancements in technology to provide a better goods and services for the customer. Annual Reports Annual Reports

3. Part A. Introduction Davis J. O’Reilly is the CEO Davis J. O’Reilly is the CEO San Ramon, CA Is where the main office is located San Ramon, CA Is where the main office is located December 31, 2005 is the end of the fiscal year December 31, 2005 is the end of the fiscal year Chevron is one of the leading included energy companies in the world. Chevron is one of the leading included energy companies in the world. Chevron’s geographic region is located all over the world Chevron’s geographic region is located all over the world

4. Part A. Audit Report PricewaterhouseCoopers LLP PricewaterhouseCoopers LLP The auditors found that all the information in Chevron’s annual report all copied down correctly. Chevron shows its beliefs in ethics with the truthful annual reports. The auditors found that all the information in Chevron’s annual report all copied down correctly. Chevron shows its beliefs in ethics with the truthful annual reports.

5. Part A. Stock Market Information Most recent stock price is $63.24 Most recent stock price is $63.24 The 12 month of Chevron’s stock is $53.76 - $68.47 The 12 month of Chevron’s stock is $53.76 - $68.47 Dividend per share is $2.08 Dividend per share is $2.08 Date of the above information is on October 09, 2006 Date of the above information is on October 09, 2006 I believe that if you own stock in Chevron you should sell it because it normally does bad in the winter, since less people use chevron products. I believe that if you own stock in Chevron you should sell it because it normally does bad in the winter, since less people use chevron products.

6. Part B. Industry Situation and Company Plans The gasoline industry that chevron is in has changed a lot with the unexpected event of hurricane Katrina, which caused a big raise in gas prices and a shortage of gas being transported. Chevrons future includes expanding by new discoveries in crude oil and natural gas. http://www.chevron.com/investor/annual/2005/s tockholder.asp http://www.chevron.com/investor/annual/2005/s tockholder.asphttp://energy.einnews.com/news/chevron

7. Part C. Income Statement The income statement is multi-step The income statement is multi-step Within a one year period Chevron has increased in all categories. Within a one year period Chevron has increased in all categories. 20042005 Gross profit 94419127968 Income from operations 1469020105 Net Income 1332814099

8. Part C. Balance Sheet Over the last year everything has increased. Chevron is doing a lot more business this year. Year Assets = Liabilities + Stockholders’ Equity 2004$93,208$47,978$45,230 2005$125,833$63,157$62676

9. Part C. Statement of Cash Flows Cash from operations has increased over the last 2 years dramatically. It went up by 73% from 2004- 2005. Cash from operations has increased over the last 2 years dramatically. It went up by 73% from 2004- 2005. Chevron is growing greatly through investing because they are spending a lot more money in investing. Chevron is growing greatly through investing because they are spending a lot more money in investing. Chevron’s primary source of financing is through sale of stock. Chevron’s primary source of financing is through sale of stock. Cash has increased over the past 2 years. Cash has increased over the past 2 years.

10. Part D. Accounting Policies Chevron manages its investments and provides financial and management support to the U.S. Chevron manages its investments and provides financial and management support to the U.S. Topics about the notes Topics about the notes General, Subsidiary and affiliated companies, Derivatives, short term investments, inventories, property plant and equipment, goodwill, environmental expenditures, currency translation, revenue recognition. General, Subsidiary and affiliated companies, Derivatives, short term investments, inventories, property plant and equipment, goodwill, environmental expenditures, currency translation, revenue recognition.

11. Part E. Financial Analysis Liquidity Ratios Working Capital is $10,325 (in millions) This means the company has that much more money than they owe Working Capital is $10,325 (in millions) This means the company has that much more money than they owe Current Ratio is 1.373 This explains their ratio of assets to liabilities, which means they only have 1.373 times as many assets as liabilities. Current Ratio is 1.373 This explains their ratio of assets to liabilities, which means they only have 1.373 times as many assets as liabilities. Receivable turnover is 13.08 This means that it takes 13.08 days to turn receivables into cash Receivable turnover is 13.08 This means that it takes 13.08 days to turn receivables into cash Average days’ sales uncollected is 27.9 This shows how long it takes to receive payments Average days’ sales uncollected is 27.9 This shows how long it takes to receive payments Inventory turnover is 55.80 This means that every 55.8 days the company needs more inventory Inventory turnover is 55.80 This means that every 55.8 days the company needs more inventory Average days’ inventory on hand 6.54 This means the average number of days to sell inventory is 6.54 days. Average days’ inventory on hand 6.54 This means the average number of days to sell inventory is 6.54 days.

12. Part E. Financial Analysis Profitability Ratios Profit margin is 7.3% This means that for every dollar 7.3% is profit Profit margin is 7.3% This means that for every dollar 7.3% is profit Asset turnover is 1.77 This means that Chevron produces $1.77 in sales for every $1.00 invested Asset turnover is 1.77 This means that Chevron produces $1.77 in sales for every $1.00 invested Return on assets is 12.9% This means for every dollar chevron invests 12.9 cents of it is net income Return on assets is 12.9% This means for every dollar chevron invests 12.9 cents of it is net income Return on equity is 26.1% Chevron earned 26.1 cents for every dollar invested by stockholders Return on equity is 26.1% Chevron earned 26.1 cents for every dollar invested by stockholders

13. Part E. Financial Analysis Solvency Ratio Debt to equity is 100.7% This means that just about half of the companies assets are financed by creditors and half by investors. Debt to equity is 100.7% This means that just about half of the companies assets are financed by creditors and half by investors.

14. Part E. Financial Analysis Market Strength Ratios Price/earnings per share is 30.4 which means that the market price is 30.4 times its earnings Price/earnings per share is 30.4 which means that the market price is 30.4 times its earnings Dividend yield is 3.3% Dividend yield is 3.3%