A fundamental approach to Valero..!
What Is a Crack Spread?
A crack spread refers to the overall pricing difference between a barrel of crude oil and the petroleum products refined from it.
A crack spread is the overall pricing difference between a barrel of crude oil and the petroleum products refined from it.
The price of a barrel of crude oil and the prices of the different products derived from it are not always in sync, leading to the spread in prices.
The difference in prices is important to oil refiners as it can impact their profit margins. (Investopedia)
What Is Operating Margin?
The operating margin measures how much profit a company makes on a dollar of sales after paying for variable costs of production, such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company’s operating income by its net sales. Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits. (Investopedia)
Now let's look at the correlation between Crack Spread and VLO gross profit:
Based on my calculations the next income of the first quarter for Valero could be more than all 4 quarters of 2021 combined..!
Best,
Dr . Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
A crack spread refers to the overall pricing difference between a barrel of crude oil and the petroleum products refined from it.
A crack spread is the overall pricing difference between a barrel of crude oil and the petroleum products refined from it.
The price of a barrel of crude oil and the prices of the different products derived from it are not always in sync, leading to the spread in prices.
The difference in prices is important to oil refiners as it can impact their profit margins. (Investopedia)
What Is Operating Margin?
The operating margin measures how much profit a company makes on a dollar of sales after paying for variable costs of production, such as wages and raw materials, but before paying interest or tax. It is calculated by dividing a company’s operating income by its net sales. Higher ratios are generally better, illustrating the company is efficient in its operations and is good at turning sales into profits. (Investopedia)
Now let's look at the correlation between Crack Spread and VLO gross profit:
Based on my calculations the next income of the first quarter for Valero could be more than all 4 quarters of 2021 combined..!
Best,
Dr . Moshkelgosha M.D
DISCLAIMER
I’m not a certified financial planner/advisor, a certified financial analyst, an economist, a CPA, an accountant, or a lawyer. I’m not a finance professional through formal education. The contents on this site are for informational purposes only and do not constitute financial, accounting, or legal advice. I can’t promise that the information shared on my posts is appropriate for you or anyone else. By using this site, you agree to hold me harmless from any ramifications, financial or otherwise, that occur to you as a result of acting on information found on this site.
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