Something's Gotta Give at XOM

Wed Oct 26 2016

The cash flow statement lets us know if a company is generating sufficient cash to service its investing and financing needs.

One has to wonder how this is going to work out for Exxon Mobil.

The column at left is 6/30/16, then 3/31/16, then 12/31/15, 9/30/15

Now just look at the famous 'bottom line'  XOM has only had one quarter when it generated cash above its needs.  Granted that quarter is more than the red ink in the other three. But notice XOM had to borrow  $4.3 billion in the financing section to generate that cash. So frankly, XOM cannot forever borrow its way to cash flow.

The three billion in dividends is  a big draw down every quarter and something the Directors will be loathe to cut.

Bottom line, will increased oil prices be enough for operations to outpace spending?

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