Financial Analysis of BHP Billiton: 2017-2018

Executive Summary
In this report, the discussion is made on the financial analysis of the organisation. For this, BHP Billiton has
been taken into consideration to evaluate the financial position of an organisation. BHP Billiton is a mining
company of metals and petroleum dual-listed company. The financial ratio’s has been evaluated to analyse the
financial position of the company. The operating cost of the organisation is affected due to economic crises such
as fluctuating currency, and recession period. As per the market analysis, the company allocation amount is
decreases due to falling down the profit. The company has to build the strong relation with shareholders to
improve the performances.
Analysis
2017
201
8
Gross Profit
Margin 0.56 0.61
Profit Margin 0.15 0.08
Return on Assets 0.05 0.03
Return on Equity 2.63 1.65
Current Ratio 1.85 2.51
Quick Ratio 1.50 1.36
Operating Cash
Flow Margin 0.44 0.42
Earnings Per
share 2.63 1.67
There are some data is founded that helps the shareholders to take the decision towards the organisation for
investment. It has been evaluated that the organisation financial performance is continuously improving in terms
of profit from 0.56 to 0.61. Increasing profit helps to attract the short terms investors and suppliers to support
the company. But the company allocate the profit to shareholders is not effective that is why; shareholders have
to analyse the policies before purchasing the shares.
Interpretation
Profitability Ratio is the financial metrics which helps to measure the ability of an organisation to generate
revenue, assets and shareholders’ equity. As per the above evaluation, it has been seen that the organisation
amount of net income is increases from the year 2017 to 2018 with the amount of 21269 and 26434 respectively
(BHP Billiton, 2018). The net sales of the organisation are increases but the net income of the company is
decreases due to high cost consuming on the different activities. Liquidity Ratio is the financial ratio that
depicts the current asset of an organisation in order to meet the obligations. It is observed that the ability of the
company to pay all the obligations is increases as the current asset amount is large as compare to the current