Financial Analysis of Royal Dutch Shell Company | Report

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INTL303
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Table of Contents
Introduction......................................................................................................................................2
Discussion and Analysis..................................................................................................................2
Company Overview.....................................................................................................................2
Cash Flows...................................................................................................................................3
Revenue Analysis........................................................................................................................4
Currency Exchange Rate.............................................................................................................5
Exchange Rate Risks...................................................................................................................6
Cost of Capital and Required Rate of Return..............................................................................7
Changes in Stock Price................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The financial analysis has been done for the Royal Dutch Shell Company which operates
as a Dutch Oil and Gas Company and is headquartered in the Netherlands and would be
incorporated in the United Kingdom. The financial analysis of the company has been specifically
done for over the last 2 years of operations in which the changes in the cash flow of the company
has been considered. Since, the operations of the company is based on a global scale basis, it is
important to decompose the revenue earned by the company both a domestic as well as
international basis (Kumar, 2019).
Discussion and Analysis
Company Overview
The Royal Dutch Shell PLC, company operates as a British-Dutch Oil and Gas Company,
which is headquartered in the Netherlands and is incorporated in the United Kingdom. The
company also operates as one of the major player operating in the Oil and Gas “Super majors”
and also accounts as one of the third largest company when compared in terms of revenue
reported. In the recent report published by the Forbes Global 2000, the Royal Dutch Shell
Company was reported as the ninth largest company that is operating in the world (Chan, 2017).
The operations of the company is vertically integrated and is quite active in the area of Oil and
Gas Industry, which well includes the exploration, production, refining, transportation,
distribution, power generation, trading and petrochemicals (Hanna & Hurmelinna-Laukkanen,
2019). The company also has various operations in relation to renewable energy activities which,
well includes biofuels, winds energy-kite system and hydrogen. The operations of the company

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is spread well across over 40 Countries, whereby it well produces around 3.7 Million Barrel of
Oil which is equivalent on a per day basis and is having around 44,000 service stations located
on a worldwide basis.
Cash Flows
The cash flow analysis has been specifically considered and analyzed for the company
for a sum of two years whereby relevant analysis of the company including the changes in
operations, investing and financing activities of the company (Bloomberg, 2020). The cash flow
from operation activities for the company in the year 2017 was around -$336 Million which well
increased to a negative of -$3,889 Million in the year 2018. The investing activities of the
company has shown a significant boost in their overall cash flows as the company reported a
higher amount of cash inflows in the form of Dividend Received. The net cash flows from
investing activities was around $11,240 Million in the year 2017 and was around $23,667
Million in the year 2018. The cash flow from financing activities has in particular has shown a
major movement and that was particularly related to the amount of cash dividends that has been
well paid by the company. On a net basis, the cash and cash equivalents at the end of the year has
remained the same. The company however, reported a share repurchase that was to the tune or to
the amount of $3,947 Million for the year 2017, the changes in the cash flows of the company
has been well shown below: