Financial Reporting Analysis of BHP and Rio Tinto

FINANCIAL REPORTING ANALYSIS

Executive Summary
Corporate financial reporting plays a major role in assessing the firm's value and financial
capabilities not only in terms of financial strength and health but also in terms of reporting
regulations compliance, disclosure requirements, transparency, and efficient reporting
presentation. The instant report briefly analyses the financial reporting of two ASX listed
companies. Such companies are BHP Billiton Plc (hereinafter may be referred to as “BHP”) and
Rio Tinto Plc (hereinafter may be referred to as “Rio Tinto”). These two companies are chosen
as both the companies are huge in size and occupy a significant position in the overall Australian
mining industry.
The entire report has been divided into four different parts. At the very beginning of the study,
the researcher provides a comparative analysis of the owners' equity section of the annual report
of both the companies. The second section focuses on the comparative analysis of the cash flow
statement. In the subsequent part of the study, the report performs a comparative analysis of
another comprehensive income statement of both the companies and the last sections focuses on
the corporate income tax position for both BJP and Rio Tinto. The researcher finally wraps up
the discussion by way of ending note.
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Table of Contents
1.0 Introduction................................................................................................................................4
2.0 Comparative Analysis of Owners’ Equity.................................................................................5
2.1 Comparative Analysis of Line Items.....................................................................................5
2.2 Comparative Analysis of Debt and Equity Position..............................................................6
3.0 Comparative Analysis of Cash Flow Statement........................................................................7
3.1 Comparative Analysis of Line Items.....................................................................................7
3.2 Comparative Analysis of Cash Position.................................................................................8
4.0 Comparative Analysis of Other Comprehensive Income Statement.........................................9
4.1 Comparative Analysis of Line Items.....................................................................................9
4.2 Comparative Analysis of Comprehensive Income Position................................................10
5.0 Comparative Analysis of Corporate Income Tax....................................................................11
5.1 Tax Expenses.......................................................................................................................11
5.2 Effective Tax Rate...............................................................................................................11
5.3 Deferred Tax Position..........................................................................................................11
5.4 Cash Tax Payment...............................................................................................................12
5.5 Cash Tax Rate......................................................................................................................13
6.0 Conclusion...............................................................................................................................14
References......................................................................................................................................15
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1.0 Introduction
Analysis of financial reporting may be considered to be one of the most crucial aspects of
business studies as the process of such analysis and evaluation may involve consideration of
different success-critical business matters that are both internal and external to the operations of
the firms. Such analysis shows the comparative position of the financial reporting of two or more
companies belonging to an industry. The report discusses the same in subsequent sections.
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