Exxon Mobil
1. Exxon Mobil's nature of business is a natural haven for criticism; reporting record profits for 2005 only added fuel to the fire so to speak. The topic of nearly every conversation around the country had something to do with how much people were shelling out at the pumps or how the cost of most consumer goods was increasing a rate never experienced before; Exxon Mobil's feat did nothing but bring negative attention to the firm. However, Exxon Mobil knew that their profits wouldn't be well accepted by the general public and did its best to do a little damage control by creating charts comparing their profits to other industries, holding press conferences and by trying to educate the public on the costs of running their business by creating small informational advertisements. Yet, no matter how hard they tried, scrutiny was in evitable. Consumers were paying three dollars for a gallon of gas, the media constantly did special reports on the increasing cost of filling our gas tanks, and the Democratic Party constantly ridiculed the Republican's lack of effort to lower the prices of gas.
Exxon Mobil's attempt to justify its profit margin by comparing the profit margins of the oil & natural gas industry to other industries can be compared to a magicians act on stage. It's a game of misdirection that the average citizen wouldn't think twice about. To get a true comparative measure of Exxon Mobil's profit margin you want to calculate Exxon Mobil's profit margin which I calculated to be 10 cents, and compare it to the profit margins of other firms in the same industry. Looking at the chart in Exhibit 2, the oil & natural gas industry has and average return on sales of 5.8 cents, which is 3.2 cents less than Exxon Mobil's true returns. If we ...