Corporate Accounting Analysis of ASX-Listed Companies

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Corporate Accounting
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Executive summary:
This report has been prepared in regards with the three public limited companies which are listed
in the Australian Securities Exchange (ASX) named BHP, Rio Tinto, and Woodside Petroleum,
which belongs to the same industry. In preparing this assignment the annual report of the last
three years has analysed to know about the financial statements of the company. The report
basically focuses on equity and liability, cash flow statements, another comprehensive statement,
and the corporate income tax. In this report the, the effective tax rate is calculated and the
comparative analysis is also done between the debt and equity and cash flow statements to
evaluate the performance of the company.
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Table of Contents
Introduction:....................................................................................................................................4
i:...................................................................................................................................................5
ii:..................................................................................................................................................6
iii:.................................................................................................................................................7
iv:.................................................................................................................................................8
v:..................................................................................................................................................9
vi:...............................................................................................................................................11
vii:..............................................................................................................................................12
viii:.............................................................................................................................................15
ix:...............................................................................................................................................16
x:................................................................................................................................................19
xi:...............................................................................................................................................20
xii:..............................................................................................................................................23
xiii:.............................................................................................................................................24
xiv:.............................................................................................................................................25
xv:..............................................................................................................................................27
xvi:.............................................................................................................................................28
xvii:............................................................................................................................................29
Conclusion:....................................................................................................................................30
References:....................................................................................................................................31
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4

Introduction:
The assignment is prepared in relation to the three Australian companies which are BHP, Rio
Tinto, and Woodside Petroleum. BHP Billiton is the Australian multinational company which is
founded in 1885 which deals in the product like metals, mining, and petroleum. The company
has the headquartered in the Melbourne, Australia and it serves the worldwide area. The
company has the revenue of US$ 43.638 billion and the operating income of US$ 17.561 billion.
Rio Tinto is one of the world’s largest Australian multinational companies which deals in the
metals and mining products and has the headquartered in the London, United Kingdom. This
company basically deals with products like iron ore, aluminum, copper, gold, diamond, titanium,
etc. The company has the operating income of US$14.474 billion and the net income of US
8.851 billion. Woodside Petroleum is the Australian company which explores and produces the
petroleum products. The company basically deals in the petroleum product of the oil and the gas
which has the headquartered in the Perth, Western Australia. The company has the net revenue
of the A$3908 billion. The report will explain the corporate accounting with the help of an
annual report of these companies. The financial statements are reviewed properly to analyse the
financial performance of the company.
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Equity and other liability:
i:
Equity analysis:
BHP: The items reported in the equity of the company BHP are Share capital of the company
and share capital of the BHP Billiton Plc, treasury shares, retained earnings, and the reserves.
The major change which has occurred it has been seen in the treasury shares. In the year 2015, it
was 76 which have reduced in the year 2016 with the amount of the 33. The retained earnings of
the company have also decreased with the high rate. In the year 2015 it was 60044 and in the
year 2016, it was 49542 (BHP, 2017). In the year 2017, the treasury shares of the company have
reduced to the 3 and the retained earnings of the company have increased with the 52618.
Rio Tinto: The items reported in the equity of the company Rio Tinto are Share premium
account, reserves, retained earnings and the share capital of the Rio Tinto plc and the Rio Tinto
Limited. The major change which has been observed it is in the reserves (Rio Tinto, 2017). In the
year 2016 the reserves were 9216 and in the year 2017, it was increased with the amount of the
12284. The retained earnings of the company have also increased as a comparison to the year
2015 to the year 2016 as the amount has increased from the 19736 to the 21631.
Woodside Petroleum: The items reported in the equity of the company BHP are issued and
fully paid shares, reserves, reserved shares for employee share plans and the retained earnings.
There were no as such major change occurred in the last three years (Woodside Petroleum,
2017). The equity of the company has increased from the previous year 2015 in the year 2016
with the amount of the 6743 to 6971. In the year 2017, the equity of the company has again
raised with the amount of the 7169.
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ii:
Liability analysis:
BHP: The liabilities of the BHP Billiton includes items such as Trade and other payables,
financial liabilities, interest-bearing liabilities, tax payable provisions, deferred income, etc. The
liability of the BHP has increased from the last year 2015 with the amount of the 54035 to the
58882. This liability has decreased in the year 2017 with the amount of the 54280 (BHP, 2016).
Rio Tinto: The liability of the company includes items such as the borrowings, tax payable,
trade payables, etc. The liability of the company has declined in the year 2016 with the amount
from 47436 to the 43533 (Rio Tinto, 2017). The liability of the Rio Tinto has increased from the
previous year 2016 with the amount of 44611.
Woodside Petroleum: The liability of the company Woodside Petroleum includes the items like
interest-bearing liabilities, provision, tax payables, liabilities which are associated with the
disposal group held for sale, etc. (Woodside Petroleum, 2017). The liability of the Woodside
Petroleum has increased from the last year 2016 with the amount of 8814 to 9091. In the year
2017 again it has increased with the amount of the 9521.
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iii:
Year BHP Rio Tinto Woodside Petroleum
Equity Debts Equity Debts Equity Debts
2017 62726 54280 51115 44611 15880 9521
2016 60071 58882 45730 43533 15662 9091
2015 70545 54035 44128 47436 15025 8814
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Cash flow statements:
iv:
BHP: The Cash flow statement of the BHP includes the items of operating, investing and
financing activities. The operating activity of the company includes the items like interest
received, interest paid, net income tax and royalty-related taxation paid, Net income tax and
royalty-related taxation refunded, settlement of the cash management, etc. (BHP, 2017). The
investing activity includes items such as purchases of the equipment, plant and property,
exploration expenditure, proceeds from the sale of assets and the other investing. The financing
activity includes the items like dividend paid, proceeds from the interest bearings, debt-related
instruments, proceeds from ordinary shares, etc.
Rio Tinto: The Cash flow statement of the Rio Tinto includes the items of operating, investing
and financing activities. The operating activity includes items such as the dividend paid and the
interest paid (Rio Tinto, 2016). Investing activity includes items such as purchase of financial
assets, the sale of financial assets, etc. Financing activity includes proceeds from the borrowings,
purchase of non-controlling interest, etc.
Woodside Petroleum: The Cash flow statement of the Woodside Petroleum includes the items
of operating, investing and financing activities. The operating activity includes cash received and
paid in the day to day activities. Investing activity includes the items cash received and paid due
to the selling and buying of the long term assets (Woodside Petroleum, 2016). Financing activity
includes the items such as the cash paid and received for the exchange of the lenders and the
stockholders.
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v:
Comparative determination:
BHP:
Particulars 2017 2016 2015
Change
2016-
2017
Change
2016-
2015
Chang
e 2015-
2017
Operating events 16804 10625 17794 -6179 7169 990
Investing in events 4161 7245 11502 3084 4257 7341
Financing events -9133 284 -8073 9417 -8357 1060
Rio Tinto:
Particulars 2017 2016 2015
Change
2016-
2017
Change
2016-
2015
Chang
e 2015-
2017
Operating events 13884 8465 9383 -5419 918 -4501
Investing in events 2373 2104 4600 -269 2496 2227
Financing events 9141 7491 7670 -1650 179 -1471
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Woodside Petroleum:
Particulars 2017 2016 2015
Change
2016-
2017
Change
2016-
2015
Chang
e 2015-
2017
Operating events 2400 2587 2475 187 -112 75
Investing in events 1568 2473 5555 905 3082 3987
Financing events -805 51 -58 856 -109 747
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