bp class presentation

8/3/2019 Bp Class Presentation

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Index Company Background Stock Market Research

Ratios and Industry Comparison Financial Statements and Analysis

Income Statement

Balance Sheet Cash Flow

Recommendation


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Company

Background BP was one of the worlds most leading oil and gas

companies.

It provided consumers with a variety of products

The products generated are from scratch


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History BP (Anglo Persian Oil company) was founded in 1901 by William Darcy 1908 BP found the black gold and from here on the legacy began.

1914 BP had an oversupply of oil and nobody to sell it to, the problem was at thatstage in time the technology was coal not oil.

BP played a big part in 1939 where the world war , their services where utilized verywell in this period

1969 BP struck it rich and attained oil from Alaska this further aided their healthygrowth.

1987 Black Monday, BP shares plummeted.

1997 BP became the first major energy company to acknowledge the potential risksof global warming.

2008 BP hit a gold mine; oil began to flow from the worlds largest floating platform atthe thunder horse field in Gulf of Mexico

2010 an explosion occurred in the new generated floating platform which was verydetrimental to the company


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Competitors Cairn energy

Parenco Premer Oil Salamander energy

Royal Dutch Shell Total S.A


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Recent Events January 2011 BP faced legal actions from its oligarch partners in the

TNK-BP as they tried to halt BPs recent share swap and arcticexploration deals.

The Gulf of Mexico spill in 2010 was another detrimental event whichset BP back in growth and profit.

BPs main partner in the exploded Gulf of Mexico oil well has agreed tocontribute 4 billion towards clean up costs and civil claims.

Early October the US regulators have approved BPs Gulf of Mexicodrilling plan

3.7 Billion Of bonds as oil were sold in March 2011 by BP as oil boostsenergy debt.

BP had lost trust from major buyers and where sinking to the deep low.*


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Ratios and IndustryComparison


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Liquidity

Measures a company's ability topay short-term obligations

The higher the current ratio, themore capable the company is ofpaying its obligations

Determines whether a firm hasenough short-term assets to coverits immediate liabilities withoutselling inventory

Companies with ratios of less than1 cannot pay their currentliabilities and should be looked at

with extreme caution.

0.90

0.95

1.00

1.05

1.10

1.15

1.20

2008 2009 2010

Ratio

Year

CURRENT RATIO

BP

IndustryAverage

0.70

0.75

0.80

0.85

0.90

0.95

2008 2009 2010

Ratio

Year

QUICK RATIO

BP

IndustryAverage


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Long Term Solvency

Determine how easily acompany can pay interest onoutstanding debt

The lower the ratio, the morethe company is burdened byinterest expense

Indicates what proportion ofdebt a company has relative toits assets

A debt ratio of greater than 1indicates that a company hasmore debt than assets, which isunsafe

-5.00

0.005.00

10.00

15.00

20.00

25.00

30.00

35.00

2008 2009 2010

Times

Year

INTEREST COVER

BP

IndustryAverage

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

2008 2009 2010

Ratio

Year

DEBT RATIO

BP

IndustryAverage


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Management Efficiency

Measure length of time, in days, thatit takes for a company toconvert resource inputs into cashflows

The shorter the cycle, the less timecapital is tied up in the businessprocess, and thus the better for the

company's bottom line.

Measures a firm's efficiency atusing its assets in generatingsales or revenue

The higher the better because itindicates the company is using itsasset efficiently to generate sales

0.60

0.80

1.00

1.20

1.40

1.60

1.80

2008 2009 2010

Times

Year

TOTAL ASSETS TURNOVER

BP

Industry

Average

10.00

15.00

20.00

25.00

30.00

35.00

40.00

2008 2009 2010

Days

Year

NET TRADE CYCLE

BP

IndustryAverage


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Profitability

To show the margin oneach $1 of sales

The higher, the better

To show how productively afirm is using its assets togenerate earnings.


20.00

25.00

30.00

35.00

40.00

45.00

50.00

2008 2009 2010

Percentage

Year

GROSS PROFIT MARGIN

BP

IndustryAverage

(1.50)

(0.50)0.501.502.503.504.505.506.507.508.509.50

10.5011.50

2008 2009 2010

Percentage

Year

RETURN ON ASSETS

BP

IndustryAverage


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Investment Ratio

A measure of the actualcash return (i.e. dividend) toshareholders on theirinvestment


The price for which ashare of that companytrades on the stock market


-

1.00

2.00

3.00

4.00

5.00

6.00

7.00

2008 2009 2010

Percentage

Year

DIVIDEND YIELD

BP

IndustryAverage

-

200.00

400.00

600.00

800.00

1,000.00

1,200.00

2008 2009 2010

pence

Market value per share

BP

Industry Average


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Balance Sheet

41%

-15%

-10%

24%

12%

3%

2010 2009 2008

Trend Analysis - Liabilities

Current Liabilit ies Long-term liabilit ies

43%

2%

-17%

15%

3%

-3%

2010 2009 2008

Trend Analysis - Assets

Current Assets Total Assets

-7%

12%

-3%

15%

3%

2010 2009 2008

Trend Analysis - Equity

Retained earnings Total L and SE


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Balance Sheet

31%

25%

31% 33%34%

32%29% 27%

33%

41% 38% 37%

2% 2% 2% 2%

2010 2009 2008 2007

L & E - Common-size Statments

Current Liabilities Long-term liabilities

Retained earnings Contributed capital

36%

29% 29%34%

40%

46%45% 42%

24% 25% 26% 25%

2010 2009 2008 2007

Assets - Common-size Statements

Current Assets

Property, plant and equipment, net

Other Assets


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Income Statement


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Cash Flow


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Recommendation


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Bibliography Bloomberg Finance L.P. BP anual report 2007 and 2010

Financial Times Forbes Wall Street Market www.opec.org/opec_web/en/data_graphs/40.h

tm

www.marketwatch.com

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