Exxon versus Chevron custom essay.

According to the textbook, the income statement measures the success of a company’s operations for a given period. The income statement is important to investors and creditors, because it determines the profitability, investment value, and creditworthiness of a company. Specifically, the income statement helps investors and creditors predict the amounts, timing, and uncertainty of future cash. Income statement preparers can make such informed predictions by analyzing a company’s financial statements, calculating the priceearnings
ratio, and reviewing notes to the financial statements on the income statement.
In order to complete this assignment, use the Internet to research and review financial statements for Exxon and Chevron for the  years 2012 and 2013.
Write a five to six (56)
page paper in which you:
1. Compare and contrast the limitations and usefulness of the singlestep
income statement and the multistep
2. Analyze the gross profit, operating profits, and net income of both Exxon and Chevron for 2012 and 2013. Of the two (2)
companies, speculate on the main reasons why one (1) company may have been more profitable than the other company.
3. Compute each company’s priceearnings
(P / E) ratio and pricetosales
ratio (PSR). Identify primary estimates or
assumptions that could result in overstated earnings, and use the ratio data to compare the quality of each company’s earnings.
4. Review notes to both Exxon’s and Chevron’s financial statements. Next, identify at least two (2) notes pertaining to the
income statement, and explain the main way in which the notes in question could influence your decision to invest in each of
the companies. Provide a rationale to justify your decision.
5. Use at least three (3) quality academic resources in this assignment. Note: Wikipedia and other Websites do not qualify as
academic resources.
Your assignment must follow these formatting requirements:
• Be typed, double spaced, using Times New Roman font (size 12), with oneinch
margins on all sides; citations and references
must follow APA or schoolspecific
format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the
date. The cover page and the reference page are not included in the required assignment page length

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