MBA504 - Financial Analysis of Woodside Petroleum Presentation

This assignment is a presentation and supporting report analyzing the financial statements of Woodside Petroleum, an Australian Stock Exchange (ASX) listed firm. The analysis covers the company's business overview, including its operations and recent financial performance. It examines key financial aspects, such as asset valuation, profitability, and leverage ratios, comparing current data with previous years to identify trends. The presentation, designed for prospective investors, highlights improvements and strategies for enhancing profitability and efficiency, including reducing operational and labor costs. The analysis includes the use of ratio analysis, horizontal and vertical analysis, and trend analysis to interpret the company's financial health and potential for future growth. The report also incorporates insights from academic literature to support the findings and recommendations.

WOODSIDE
PETROLEUM
Analysis

Wesfarmers
O Founded in the year 1954.
O Involved in the business of petroleum
and LNG and the largest operator of oil
and gas company
O The areas the company is currently
serving are Canada, United States,
Senegal, Maynmar (Woodside, 2018) .
O The current revenue of the company is
A$2636 billion
O The team is of 3300 employees

Business Overview
O The greater sunrise gas development
Timor Sea, North of the Australia.
O Its located about 450 kilometers
north-west of Darwin (Woodside
Petroleum, 2018).
O The fields have the contingent
resource worth, 5.13 trillion cubic feet.
O In April 2010 Shell’s floating liquefied
natural gas technology

Assessment of the financial
transactions
O The current assets of the company have risen from
$1011 to $2411.
O The total assets have increased from $25399 to
$27088.
O The fixed assets are depreciated on the straight line
method .
O The expenses on the mining are amortized over the
life of mine (Campbell, 2017).
O Net profit sterilized at $148.1 million
O Overall expenses are $437 fort he current financial year
2018.
O Equity class includes the fully paid shares, other
reserves and shares reserved for employees.

Auditors and the Audit
firm
O The Ernst and Young is the auditing firm
for the Woodside Petroleum.
O The third party audits are essential and
required to give the unbiased opinion on
the review of the financial statements.
O The critical content of the audit is to
deliver the opinion on the financial
statements so as to give the true and
the fair value of the statements (Chen,
Lin and Siregar, 2018).

Initiatives towards the
Sustainability
O The sustainability of the company can be
determined by the core values which are as
follows.
O Employee ratio: Women's are 54%
O 12.7 million strategic partnerships have been
created successfully (Woodside Sustainability,
2018).
O In terms of the environment, 3.4% energy
efficiency improvement against baseline
O Reduced our flaring by 16.3% in terms of the
previous years.

Measurement of the Assets
O The exploration and evaluation is
accounted for on the basis of interest
method (Woodside Petroleum, 2018).
O The costs of acquiring interests in
new exploration and evaluation
licenses are capitalized.

O The area interest, along with the
further evaluation are capitalized.
O Once the approval is received, the
interest transferred to oil and gas
properties.
O Oil and gas are calculated at cost less
depreciation and the impairment
charges (Woodside Petroleum, 2018).

Profitability Ratios
2017 2018
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
Profitability
Operating margin
Total margin
return on net asset

O Profitability overall have been reduced in
comparison of the previous years.
O The operating margin reduced to 50.3%,
the total margin declined to 2.8% and
return on asset decreased to 2.7%.
O Improvement strategy:
O Net profit can be improved by reducing the
labour costs, operation costs (Kilroy &
Schneider, 2017).
O The gross profit can be increased by
reduction of the operating costs.

Leverage Ratios
2017 2018
0.00
0.50
1.00
1.50
2.00
2.50
Liquidity
Current Ratio
Quick Ratio

O Liquidity ratios determines the ability of
the company to payback the current
liabilities through current assets.
O The current ratio improved from 0.97 to
2.31 times. The quick ratio declined from
0.37 to 0.34 times.
O Improvement strategy
O Obsolete assets shall be removed from
the company (Campbell, 2017).
O The long term liabilities shall be focused
more.
O The cash shall be realized faster.