Financial Analysis of BHP Billiton Limited: A Comprehensive Report

HI5002: Finance for Business
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Contents
Introduction.................................................................................................................................................3
Questions.....................................................................................................................................................4
1. A Brief Description about company................................................................................................4
2. Ownership Governance Structure....................................................................................................4
3. Fundamental Ratios.........................................................................................................................6
4. Two graphs with description of result..............................................................................................8
5. Factors influencing the share price................................................................................................10
6. Calculation of beta values and expected rate of return using the CAPM.......................................11
7. Weighted Average Cost of Capital (WACC).................................................................................12
8. Debt Ratio......................................................................................................................................14
9. Dividend Policy.............................................................................................................................16
10. Letter of Recommendation........................................................................................................17
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19
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Introduction
This report explains about the management of the various resources in the organization. The
utilization of the resources is done so that the profitability can be increased and the
accountability can be maintained within the organization. For the explanation of the whole report
the BHP Billiton has been considered so that the practical knowledge about the report can be
gained. The various ratios are calculated so that the financial position of the organization can be
gained. The factors which affect the share price of the organization are also determined. The
dividend policy of the organization is also explained so that the distribution of the profits to
shareholders can be gained. The recommendations are also provided to the organization which
can be used by the organization for attaining the profitability within the organization. To give the
practical implementation for the factors that are affecting price the graphs are depicted.
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Questions
1. A Brief Description about company
The BHP Billiton is the ASX Listed Anglo Australian multinational metal, mining and petroleum
company which have its headquarters in Melbourne, Australia (BHP Billiton, 2018). It was
founded in on 29 September 1860 and is ranked as one of the world’s largest mining company
which is based upon the capitalization of market. The products of the company are coal,
petroleum and iron ore. According to the survey of 2017 revenue of the organization was
$38.285 and about 65000 employees are working to provide the quality of products to the
customers. They are committed to the highest level of governance to create the long term
shareholders value (BHP Billiton, 2018).
2. Ownership Governance Structure
I) The shareholders with higher than 20% of the shareholdings are: One of the largest is
the bank of America Corporation who has 4.2 million shareholdings. The second is
Dimensional fund Advisor LP who have the holdings of 3.2 million. The Earnest
Partners LC reported 2.1 million shares (BHP Billiton, 2018).
The shareholders for more than 5% shareholdings are: The shareholders of the organization who
have the shareholdings of more than 5% are Neuberger Berman Group LLC has the
shareholdings of 1.9 million shares (BHP Billiton, 2018).
II) The main people who are involved in the corporate governance are:
Chairman: Ken Mackenzie
Board Members: The members of the board are:
 Jac Nasser
 Andrew Mackenzie (Non independent Director and CEO)
 Malcolm Brinded (Non Executive Director)
 Malcolm Broomhead (Independent Non- Executive Director)
 Shriti Vadera (Senior Independent Director)
 Anita Frew (Independent Non- Executive Director)
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