Woodside Petroleum Analysis 2022

WOODSIDE
PETROLEUM
Analysis

Wesfarmers
O Founded in the year 1954.
O Involved in the business of petroleum
and LNG and the largest operator of oil
and gas company
O The areas the company is currently
serving are Canada, United States,
Senegal, Maynmar (Woodside, 2018) .
O The current revenue of the company is
A$2636 billion
O The team is of 3300 employees

Business Overview
O The greater sunrise gas development
Timor Sea, North of the Australia.
O Its located about 450 kilometers
north-west of Darwin (Woodside
Petroleum, 2018).
O The fields have the contingent
resource worth, 5.13 trillion cubic feet.
O In April 2010 Shell’s floating liquefied
natural gas technology

Assessment of the financial
transactions
O The current assets of the company have risen from
$1011 to $2411.
O The total assets have increased from $25399 to
$27088.
O The fixed assets are depreciated on the straight line
method .
O The expenses on the mining are amortized over the
life of mine (Campbell, 2017).
O Net profit sterilized at $148.1 million
O Overall expenses are $437 fort he current financial year
2018.
O Equity class includes the fully paid shares, other
reserves and shares reserved for employees.

Auditors and the Audit
firm
O The Ernst and Young is the auditing firm
for the Woodside Petroleum.
O The third party audits are essential and
required to give the unbiased opinion on
the review of the financial statements.
O The critical content of the audit is to
deliver the opinion on the financial
statements so as to give the true and
the fair value of the statements (Chen,
Lin and Siregar, 2018).

Initiatives towards the
Sustainability
O The sustainability of the company can be
determined by the core values which are as
follows.
O Employee ratio: Women's are 54%
O 12.7 million strategic partnerships have been
created successfully (Woodside Sustainability,
2018).
O In terms of the environment, 3.4% energy
efficiency improvement against baseline
O Reduced our flaring by 16.3% in terms of the
previous years.

Measurement of the Assets
O The exploration and evaluation is
accounted for on the basis of interest
method (Woodside Petroleum, 2018).
O The costs of acquiring interests in
new exploration and evaluation
licenses are capitalized.

O The area interest, along with the
further evaluation are capitalized.
O Once the approval is received, the
interest transferred to oil and gas
properties.
O Oil and gas are calculated at cost less
depreciation and the impairment
charges (Woodside Petroleum, 2018).

Profitability Ratios
2017 2018
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Profitability
Operating margin
Total margin
return on net asset

O Profitability overall have been reduced in
comparison of the previous years.
O The operating margin reduced to 50.3%,
the total margin declined to 2.8% and
return on asset decreased to 2.7%.
O Improvement strategy:
O Net profit can be improved by reducing the
labour costs, operation costs (Kilroy &
Schneider, 2017).
O The gross profit can be increased by
reduction of the operating costs.

Leverage Ratios
2017 2018
0.00
0.50
1.00
1.50
2.00
2.50
Liquidity
Current Ratio
Quick Ratio

O Liquidity ratios determines the ability of
the company to payback the current
liabilities through current assets.
O The current ratio improved from 0.97 to
2.31 times. The quick ratio declined from
0.37 to 0.34 times.
O Improvement strategy
O Obsolete assets shall be removed from
the company (Campbell, 2017).
O The long term liabilities shall be focused
more.
O The cash shall be realized faster.

Efficiency ratios
2017 2018
0.00
20.00
40.00
60.00
80.00
100.00
120.00
140.00
Activity Ratios
Fixed Asset Turnover
Accounts payable turnover
Inventory Turnover
Accounts Receivable

O Activity ratios are the ratios which define the
efficiency of the company and how well the
cash is realized from the debtors and the
inventory.
O The Accounts receivable turnover ratio have
seen a drastic improvement from 37.28 days
to 33.92 days.
O The inventory turnover ratio improved from
34.58 days to 21.73 days which improves
the cash conversion cycle (Petruzzo, et al
2015).
O The major change was observed in terms of
accounts payable ratio which declined from
119.93 days to 82.14 days.

Conclusion
O The Woodside is performing well yet
the several areas needs
amendments. The company has the
potential to grow and they can grab
the greater market share if the
downside areas are taken care of.
Regular scrutiny and supervision
would help in bringing back the weak
areas to strong position.

References
O Woodside Petroleum, (2018). Annual Report. Retrieved from
https://files.woodside/docs/default-source/investor-documents/
major-reports-(static-pdfs)/annual-report-2018.pdf?sfvrsn=c9a4
6145
O Woodside Sustainability, (2018). Sustainability Report.
Retrieved from
https://files.woodside/docs/default-source/investor-documents/
major-reports-(static-pdfs)/2018-sustainable-development-repor
t/sustainable-development-report-2018.pdf?sfvrsn=55694111_
21
O Campbell, J., (2017). Insights from the company monitor:
Wesfarmers. Equity, 31(8), p.16.
O Kilroy, D. & Schneider, M., (2017). Valuing the Current Strategy.
In Customer Value, Shareholder Wealth, Community
Wellbeing (pp. 109-141). Palgrave Macmillan, Cham.
O Chen, K., Lin, A. & Siregar, D., (2018). Auditor Reputation,
Auditor Independence and the Underpricing of IPOs. Journal of
Applied Business & Economics, 20(6).
O Petruzzo, P., Gazarian, A., Kanitakis, J., Parmentier, H., Guigal,
V., Guillot, M., Vial, C., Dubernard, J.M., Morelon, E. & Badet, L.,
(2015). Outcomes after bilateral hand allotransplantation: a
risk/benefit ratio analysis. Annals of surgery, 261(1), pp.213-