COP: Financial Analysis through December 2007 (Updated)

ConocoPhillips's (COP) preliminary financial results for the quarter and year that ended on 31 December 2007 did not include a Balance Sheet. This omission is typical for Conoco, and it was later rectified in the 10-K filed with the SEC. In our original analysis of these results, we simply assumed that the Balance Sheet did not change between 30 September and 31 December. We have now updated the analysis to take the latest data in the 10-K into account.

The new data did not significantly change the Gauge scores, as can be seen below:

• Cash Management: 10 of 25 (was 11)
• Growth: 3 of 25 (unchanged)
• Profitability: 12 of 25 (was 11)
• Value: 0 of 25 (unchanged)
  

• Overall: 24 of 100 (was 23)

The data in the 10-K didn't change our examination of Conoco's fourth-quarter Income Statement, which was included here.

The updated Balance Sheet did change the values for some of the Cash Management metrics. The latest figures are listed below:

The metrics that contributed the most to the score were:

• LTD/Equity = 22.8 percent; down significantly from 27.9 percent in December 2006
• Cash Conversion Cycle Time (CCCT) = -2.1 days, down from 0.9 days last year, for this measure of efficiency
• Debt/CFO = 0.9 years, compared to 1.3 years 12 months ago
  

The metrics that contributed the least to the score were:

• Working Capital/Market Capitalization = -1.3 percent, down from -0.9 percent
• Days of Sales Outstanding (DSO) = 29.7 days, up from 25.9 days in December 2006
• Current Ratio = 0.9; weaker than we like, but hardly a concern for this behemoth
  

With the new way we are calculating the Accrual Ratio, the figure dropped (a good thing) from 14.6 percent in 2006 to -2.3 percent in 2007. The decreasing Accrual Ratio indicates that more of the company's Net Income is due to CFO, and, therefore, less is due to changes in non-operational Balance Sheet accruals.