Review the Financial Statements below for XOM. For one year, briefly summarize t

ID: 2728612 • Letter: R

Question

Review the Financial Statements below for XOM. For one year, briefly summarize the effect of Treasury Stock transactions on the Balance Sheet for XOM. Please see the attach spreadsheet.

???EXXON MOBIL CORP (XOM) CashFlowFlag BALANCE SHEET Fiscal year ends in December. USD in millions except per share data. 2011-12 2012-12 2013-12 2014-12 2015-12 Assets Current assets Cash Cash and cash equivalents $ 12,664.00 $ 9,582.00 $ 4,644.00 $ 4,616.00 $ 3,705.00 Total cash $ 12,664.00 $ 9,582.00 $ 4,644.00 $ 4,616.00 $ 3,705.00 Receivables $ 38,642.00 $ 34,987.00 $ 33,152.00 $ 28,009.00 $ 19,875.00 Inventories $ 15,024.00 $ 14,542.00 $ 16,135.00 $ 16,678.00 $ 16,245.00 Other current assets $ 6,633.00 $ 5,349.00 $ 5,377.00 $ 3,607.00 $ 2,798.00 Total current assets $ 72,963.00 $ 64,460.00 $ 59,308.00 $ 52,910.00 $ 42,623.00 Non-current assets Property, plant and equipment Gross property, plant and equipment $ 393,995.00 $ 409,314.00 $ 434,517.00 $ 446,789.00 $ 447,337.00 Accumulated Depreciation $ (179,331.00) $ (182,365.00) $ (190,867.00) $ (194,121.00) $ (195,732.00) Net property, plant and equipment $ 214,664.00 $ 226,949.00 $ 243,650.00 $ 252,668.00 $ 251,605.00 Equity and other investments $ 34,333.00 $ 34,718.00 $ 36,328.00 $ 35,239.00 $ 34,245.00 Other long-term assets $ 9,092.00 $ 7,668.00 $ 7,522.00 $ 8,676.00 $ 8,285.00 Total non-current assets $ 258,089.00 $ 269,335.00 $ 287,500.00 $ 296,583.00 $ 294,135.00 Total assets $ 331,052.00 $ 333,795.00 $ 346,808.00 $ 349,493.00 $ 336,758.00 Liabilities and stockholders' equity Liabilities Current liabilities Accounts payable $ 33,969.00 $ 30,920.00 $ 25,286.00 $ 18,074.00 Short-term debt $ 6,474.00 $ 3,653.00 $ 15,086.00 $ 16,995.00 $ 18,762.00 Capital leases $ 1,237.00 $ 722.00 $ 473.00 Income taxes payable $ 12,727.00 $ 9,758.00 $ 7,831.00 $ 4,938.00 $ 2,802.00 Accrued liabilities $ 6,762.00 Other current liabilities $ 23,098.00 $ 50,728.00 $ 17,165.00 $ 16,941.00 $ 7,576.00 Total current liabilities $ 77,505.00 $ 64,139.00 $ 71,724.00 $ 64,633.00 $ 53,976.00 Non-current liabilities Long-term debt $ 9,322.00 $ 7,928.00 $ 6,891.00 $ 11,653.00 $ 18,687.00 Capital leases $ 1,238.00 Deferred taxes liabilities $ 36,618.00 $ 37,570.00 $ 40,530.00 $ 39,230.00 $ 36,818.00 Pensions and other postretirement benefits $ 24,994.00 $ 25,267.00 $ 20,646.00 $ 25,802.00 $ 22,647.00 Minority interest $ 6,348.00 $ 5,797.00 $ 6,492.00 $ 6,665.00 $ 5,999.00 Other long-term liabilities $ 21,869.00 $ 27,231.00 $ 26,522.00 $ 27,111.00 $ 26,582.00 Total non-current liabilities $ 99,151.00 $ 103,793.00 $ 101,081.00 $ 110,461.00 $ 111,971.00 Total liabilities $ 176,656.00 $ 167,932.00 $ 172,805.00 $ 175,094.00 $ 165,947.00 Stockholders' equity Common stock $ 154,396.00 $ 165,863.00 $ 174,003.00 $ 174,399.00 $ 170,811.00 Additional paid-in capital $ 9,512.00 $ 9,653.00 $ 10,077.00 $ 10,792.00 $ 11,612.00 Retained earnings $ 330,939.00 $ 365,727.00 $ 387,432.00 $ 408,384.00 $ 412,444.00 Treasury stock $ (176,932.00) $ (197,333.00) $ (212,781.00) $ (225,820.00) $ (229,734.00) Accumulated other comprehensive income $ (163,519.00) $ (178,047.00) $ (184,728.00) $ (193,356.00) $ (194,322.00) Total Stockholders' equity $ 154,396.00 $ 165,863.00 $ 174,003.00 $ 174,399.00 $ 170,811.00 Total liabilities and stockholders' equity $ 331,052.00 $ 333,795.00 $ 346,808.00 $ 349,493.00 $ 336,758.00

Explanation / Answer

Treasury stock is the stock, a company has repurchased. It decreases the amount of shareholder’s equity in the balance sheet. Following table shows the year wise treasury stock for the firm:

Year

2011

2012

2013

2014

2015

Treasury stock

(176,932.00)

$ (197,333.00)

$ (212,781.00)

$ (225,820.00)

$ (229,734.00)

All the amounts are negative that shows reduction in shareholder’s equity. We can see that the company is very aggressive on buy back. Treasury stock balance increases with the year. In 2011, treasury stock balance was 176,932 million whereas it became 229,734 million by the end of 2015. One of the reason for stock buyback could be to trade on equity and improve the Return on Equity. We can see that long term debt balance is increasing, that means the company is using long term debt to repurchase stocks. It has increased the weight of debt and reduced the weight of equity in the capital structure.