This report provides a comprehensive financial analysis of BHP Billiton, including revenue, profitability, liquidity, and market analysis. It also discusses the impact of economic crises and provides non-financial information such as competitor analysis and market size. The report concludes with recommendations for the company.
Contribute Materials
Your contribution can guide someone’s learning journey. Share your
documents today.
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. 20172018 0.00 0.50 1.00 1.50 2.00 2.50 3.00 3.50 4.00 Return on Equity Return on Assets Profit Margin Gross Profit Margin Liquidity Ratio 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 liabilities. It has been evaluated that the current asset of the company is 21056 in the year 2017 and it is increases to 35130 in the year 2018 respectively (BHP Billiton, 2018). 20172018 0 1 2 3 Current Ratio Quick Ratio Cash Management Cash flow ratio of the organisation indicates the inflow and outflow of cash in the organisation. According to ratio evaluation, the amount of operating activities is evaluated in the year 2017 it is 16804 and in the year 2018, it is 18461(BHP Billiton, 2018). The ratio of cash return equity reflects that the amount of return to owners on their equity. The company cash return ratio depicts that the company has the capacity to pay’s the owner’s equity from 7.49 to 8.23 in the year 2017 to 2018 respectively. Net cash provided by operating activities1680418461 Operating cash flow1680418461 Profitability Ratio 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. 2017-062018-06 Revenue3828543638 Gross profit2126926434 Net income58903705 Net income available to common shareholders58903705 Liquidity Ratio Current Ratio 1.852.51 Quick Ratio 1.501.36
Secure Best Marks with AI Grader
Need help grading? Try our AI Grader for instant feedback on your assignments.
2017 2018 0 0.2 0.4 0.6 0.8 1 1.2 1.4 Dividend Pay Out Earning Per share (Source: IBIS World, 2019) Market Analysis Market analysis reflects the size in the market in terms of shares price. Earnings per share and dividend pay- out are the ratio which is evaluated to measure the company performance in the market. The ratio of earning per share is decreases that mean allocated profit amount is distributed to each outstanding share and its common stock. Non-Financial Information Competitor analysis There are many companies compete the BHP Billiton providing the similar services such as Rio Tinto, Vale, Alcoa and many others. Rio Tinto is the main competitors who compete the company in terms of revenue and customerpreferences. Market Size Australia has a large supply of mineral, hydrocarbon and non-mineral reserves. The export and import of minerals earn 78% of revenue in the year 2018-19. The annual growth of the market is 2.4% and it is expected that the market will grow with the high rate. Economic Crises In the recent financial crises of recession, the oil prices were fall down due to which the company suffer with the loss. But after the recovery of crises in the year 2009, the demand oil is increases. But due to fluctuation in the prices of petroleum, the demands of consumers are affected. Conclusion At the end, it is concluded that the organisation has to implement some changes and strategies. It has been seen that the company financial performance is decreases due to which the allocation amount of profit to shareholders are also falls down. The company has to reduce the expenses so that the profit amount is increases and it distributes the effective amount of profit. The company has to build the strong relation with its shareholders and also promise them to give the high profit amount.
References BHP Billiton. (2018).Annual Report 2018. Retrieved from: https://www.bhp.com/-/media/documents/investors/annual-reports/2018/ bhpannualreport2018.pdf?la=en CSI Market. (2018).Bhp Group Ltd's Comment on Sales, Marketing and Customers. Retrieved from:https://csimarket.com/stocks/markets_glance.php?code=BHP Dunn, M. (2009)Recession fears as economy hits lowest level since 2009 global financial crisis.Retrieved from: https://finance.nine.com.au/personal-finance/australian- recession-2019-economy-slowed-to-weakest-level-since-2009-global-financial- crisis/9282fe6c-b394-40d2-ab83-39add2e099d5 IBIS World. (2019).Mining - Australia Market Research Report. Retrieved from: https://www.ibisworld.com.au/industry-trends/market-research-reports/mining/ mining.html Owler. (2018).BHP's Competitors, Revenue, Number of Employees, Funding and Acquisitions.Retrieved from:https://www.owler.com/company/bhpbillitonplc