Financial Analysis of BHP Billiton

Exec utive Summ ary
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.
2017 2018
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).
2017 2018
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
activities 16804 18461
Operating cash flow 16804 18461
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.
2017-06 2018-06
Revenue 38285 43638
Gross profit 21269 26434
Net income 5890 3705
Net income available to common shareholders 5890 3705
Liquidity Ratio
Current Ratio
1.85 2.51
Quick Ratio
1.50 1.36