Analysis of Financial Accounting for Corporations: BHP Billiton

Corporate and
Financial accounting

EXECUTIVE SUMMARY
Present report is based upon the analysis of financial accounting for corporations such as
BHP Billiton. This assignment summarises different concepts such as elements of cash flow,
importance of EPS, movement in elements of statement of changes in equities, discussion of
non-current liabilities etc. The company is recommended to disclose its final accounts every year
so that it can meet expectation of internal as well as external stakeholders.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
Table of Contents.............................................................................................................................3
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1. Discussion and analysis of the items of statement of cash flow and identification of the
items which are related to balance sheet......................................................................................1
2. Explanation of the company’s performance according to EPS and calculation of EPS for last
two years......................................................................................................................................2
3. Discussion of whether EPS is useful performance indicator for the company or not.............3
4. Explanation of the way in which material movement in the statement of changes in equity is
reflected and reported in the statement of cash flows..................................................................3
5. Discussion of the items which are recorded as non-current liabilities, including the related
notes and providing explanation of material movement of each item.........................................4
6. Discussion of potential advantages and disadvantages of each source of capital according to
the capital structure of the company............................................................................................5
PART B...........................................................................................................................................6
Research and discussion of the disclosure requirements for publicly listed companies in the
financial statements in comparison to other non-listed companies.............................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Financial accounting can be defined as the procedure which is followed by most of the
entities for the purpose of generating final accounts so that actual performance and market
position of business could be determined. Almost all the corporations are focused with it as it
guides them to formulate effective and strategic decisions for future so that desired targets could
be achieved successfully. If an enterprise is not able to make sure that are its financial statements
are not having accurate figures then it may leave negative impact upon execution of business as
it will affect interest of stakeholders in business (Caires, 2018). Main aim of this report is to
enhance understanding of financial accounting for companies so that they can meet the long-term
business goals. For this purpose, the entity which is selected for the assignment is BHP Billiton.
It is a mining, petroleum and metal company which is listed on Australian Stock Exchange. It is
having headquarter in Melbourne, Australia and founded in year 1885. This project covers
various topics such as discussion of items of cash flow statement, calculation of EPS and
discussion of its usefulness, analysis of material movement in cash flow and other items.
Additionally, research and discussion of disclosure requirements for publicly listed companies in
the financial statements in comparison to non-listed companies are also covered in this
assignment.
PART A
1. Discussion and analysis of the items of statement of cash flow and identification of the
items which are related to balance sheet
Cash flow statement is generated by all the companies on yearly basis so that they can
analyse the liquidity and liquid strength of business. Main purpose of generating it, is to analyse
that the organisation is having sufficient funds to meet long term business goals or not. From the
cash flow statement of BHP Billiton it has been identified that total cash generation from
operations for year was 23428, total cash flow from operating activities was 17871. Apart from
this, the total capital and exploration expenses were 7123 for the same year. Net cash inflow
from investing activities for the company is 2607 and for financing activities it is 20528 in
negative. At the end of the year there was a decrement of 10477 in the cash and cash equivalents
(Annual report of BHP Billiton, 2019).
1