Finance for Business Company Performance Analysis
Added on 2020-12-09
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FINANCE FOR BUSINESS-COMPANYPERFORMANCEANALYSIS
TABLE OF CONTENTSABSTRACT.....................................................................................................................................3I INTRODUCTION........................................................................................................................3II FINANCIAL ANALYSIS OF SELECTED COMPANY...........................................................32.1 Description of the company..................................................................................................32.2 computing and analysing the company's performance ratios................................................42.3 Analysis of cash management...............................................................................................72.4 Performing sensitivity analysis with the provided data........................................................72.5 systematic and unsystematic risk which affect the performance of the organisation.........112.6 Identification of the dividend payout ratio and the dividend policy...................................12III Recommendation......................................................................................................................14IV Conclusion................................................................................................................................14REFERENCES..............................................................................................................................16
ABSTRACTBusiness performance analysis basically refers to techniques which is used to measure theperformance of the company over a period. BHP Billiton is the trading company dealing intrading of mining, petroleum and metals multinationally The company dealing mining andmetal; and also the petroleum trading with 62000 and more number of employees of theorganisation. BHP has merged with the Billiton mining company in order to form BHP BillitonThe company's previous years’ operating income is equals $17.561 billion.There are different types of ratios which helps to measure the company's financial healthand financial performance. Net profit margin is the percentage of profit generated by thecompany from revenue. After deducting all expenses from sales the percentage of left over salesrevenue is net profit margin .ESOP is basically the employee benefit plan which helps tooffering the employees an ownership interest in the entire organisation. BHP purchases the ESOP trust amount of (108)US$M in 2018. Employee share awardsare also exercised by the company to arrive at net of the employee contribution. Systematic riskis basically the risk which is associated with the market returns. Unsystematic risk is the riskwhich is associated with specific company or industryI INTRODUCTIONBusiness performance analysis basically refers to techniques which is used to measure theperformance of the company over a period and Business finance means to the money and thecredit which is employed in the business.BHP Billiton is the trading company dealing in trading of mining, petroleum and metalsmultinationally .The present study is based on the introduction of the company's different ratioswhich helps to measure the company's efficiency comparative with another. Furthermore, the report will also help to make understand the different securities undercurrents assets and also the systematic risk and unsystematic risk which company needs to face.II FINANCIAL ANALYSIS OF SELECTED COMPANY2.1 Description of the company
BHP Billiton is the company exist in the Mining and Metal sector and has expanded itsbusiness in different locations of the world. The company dealing mining and metal; and also thepetroleum trading with 62000 and more number of employees of the organisation (ouppi andet.al., 2017). The company has also diversified into the different products which includes ironore, natural gas, petrol, coal, uranium , nickel, copper in order to capture larger share of themarket.BHP Billiton focused on their repositioning by being a down market and high volumelow cost retailer into the one who designed to attract different range of the social groups byoffering them the products which ranges from the low cost.BHP has merged with the Billiton mining company in order to form BHP Billiton Thecompany's previous years’ operating income is equals $17.561 billion and net income is equalsto $4.823 billion which depicts good and efficient financial health of the organisation.2.2 computing and analysing the company's performance ratiosThere are different types of ratios which helps to measure the company's financial healthand financial performance and some ratios are explained below:PROFITABILITY RATIOSGross profit margin is the ratio which is used to measure the company's, financial healthand it also helps in revealing the amount which is left with the company from total sales afterdeducting the cost of goods sold from it ( Widhoyoko, 2018).BHP BillitonAnglo American Capital PLCRatio:201620172018201620172018gross profit margin=Revenue- cost of goods sold/Revenue *10039.4455.5560.5827.9645.2042.58From the above table it can be interpreted that BHP Billiton has increasing ratio of grossprofit margin which showing the company is continuously increasing their revenue and sales byproviding quality goods and services. whereas Anglo American PLC gross profit margin is alsoshowing the increasing trend from recent three year which also depicts that Anglo American
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