Exxon's Problem of Riches*

Introduction

The largest and most valuable company in the US announced record profits in the wake of high gasoline prices and faced increased criticism from some US politicians and the general public.

On May 09, 2006, the Wall Street Journal reported that Exxon Mobil (Exxon), the largest company in the US, was close to displacing Microsoft Corporation (Microsoft) as the non-financial company with the world’s largest cash reserves. As on March 31, 2006, Exxon's cash reserves were US$ 31.9 billion, while Microsoft's cash and short-term investments were US$ 34.8 billion. The Wall Street Journal also reported that Exxon was increasing its cash reserves at a fast rate and could overtake Microsoft by July 2006.

The period 2005 had proved to be a bountiful year for Exxon and other US oil companies like Chevron, and ConocoPhillips. The high oil prices had resulted in increased profits for these oil firms. For FY 2005, Exxon posted a record profit of US$ 36.13 billion, the highest reported annual profit for a company in the corporate history of the US...

Cases on Related Topic

1. The Exxon - Mobil Merger Controversy
2. The Exxon Valdez Oil Spill
3. Royal Dutch/Shell 'Oil Reserves' Controversy
4. The Russian Oil Giant Yukos - When Business and Politics Collide