Accounting for Business Assignment PDF

RUNNING HEAD: ACCOUNTING FOR BUSINESS
ACCOUNTING FOR BUSINESS

ACCOUNTING FOR BUSINESS 1
EXECUTIVE SUMMARY
In this assignment, organisational performance of the BHP is considered. BHP
Billiton Limited is an Australian based public company established in 1885 engaged in
multinational mining, oil and gas, metals and petroleum products. The company is
headquartered in Melbourne, Australia. The company is operating as a Dual listed company
with two parent companies named BHP Billiton limited and BHP Billiton Plc. which is refer
as BHP. The performance of BHP is evaluated by analysing income statement, cash flow
statement and balance sheet by comparing current financial year’s figures (2017) with the
previous financial year (2016) and with the competitor (RIO Tinto Limited). Further four
financial ratios are also calculated for evaluating financial position such as Return on Assets,
Inventory Turnover, Quick ratio and Price-earnings ratio by taking three financial years
(2017, 2016 and 2015). This report also includes the ethical standards including corporate
governance, business operations, major competitors, industry size etc. Thus, this has been
concluded that BHP’s overall performance is good and investors should invest in this
company for earning sound returns in future.

ACCOUNTING FOR BUSINESS 2
Contents
BHP........................................................................................................................ 3
INTRODUCTION................................................................................................... 3
COMPANY OVERVIEW.......................................................................................... 3
SECTION 1.......................................................................................................... 4
Analyse Consolidated Income statement and comparison with the previous
year’s figures and also from the competitor (RIO Tinto limited)......................4
Analyse Cash Flow statement..........................................................................7
Analyse Balance Sheet.................................................................................... 8
SECTION 2.......................................................................................................... 9

ACCOUNTING FOR BUSINESS 3
BHP
INTRODUCTION
This report will provide the analysis of the BHP financial performance considering
2017 financial year. The performance of this company is gauged in three sections. The first
section includes analysing income statement, cash flow statement and balance sheet by
comparing current financial year’s figures (2017) with the previous financial year (2016) and
with the competitor (RIO Tinto Limited). Second section of the report includes ratio analysis
technique where financial position of BHP is evaluated from Return on Assets, Inventory
Turnover, Quick ratio and Price-earnings ratio by taking three financial years (2017, 2016
and 2015) to recommend to the current investor whether to continue to capitalize in BHP or
not and also to the potential investor whether to spend in the company or not. Last but not the
least third section of the report includes ethical standards including corporate governance
statement, elaborating business operations, identification of major competitors, industry size,
market value etc. explaining how management works for the best interest of the company.
Further this report begins with the company overview and ends with recommendations and
conclusions.
The financial figures will be pull out from the Balance sheet, income statement and
the cash flow statement given in the Annual report. The financial health will be determined
for the purpose of assessing whether the investor should invest or not.
COMPANY OVERVIEW
BHP is an Australian based publicly listed company incorporated in 1885. The issuer code is
ASX: BHP. The headquarter of the company is situated in Melbourne, Australia. From 2001,
the company is functioning as a Double registered company with two parent companies