Financial Ratios and British Petroleum

Topics: Financial ratios, Royal Dutch Shell, Supermajor Pages: 8 (2031 words) Published: September 5, 2013
British Petroleum Ratio Analysis Memo

Team B

ACC/291

September 5, 2013
Vicki Garrison

British Petroleum Analysis Memo

Memo to Bob Fryar Executive Vice President, Safety and Operational Risk Dr Brian Gilvary Chief Financial Officer of British Petroleum: Introduction
As we are sure you are already familiar with the British Petroleum organization, a lot of the information included in this memo may seem unnecessary directed only to you. It is vital to know information about your competition. However, you may find it a helpful tool to use or forward on to others who are not quite as informed on the history and financial situations surrounding British Petroleum, or use as a public relations document. We will discuss the history of both of the organizations. We will also compare liquidity, profitability and solvency ratios of these companies. Then using the data gathered from the ratio’s we will determine which users may be interested in these ratios and what does this data reveal. Then based on all the information we will give my British Petroleum some advice based on the data. Thank you for your time and consideration, we know you are a busy individual. British Petroleum History

British Petroleum is also identified as BP. BP is the fifth largest company in the world in terms of revenue. BP has locations in the Americas, Europe, Asia Pacific, Africa and the Middle East. In 1901, Mr. William D’Arcy, a businessman from England, took the risk of investing in the search for oil in Persia with investments also contributed by Burmah Oil Company. BP operates in more than forty-five different countries within four continents, so the products and services do vary in these locations ("Products and Services", 2013). Though BP have dealt with a financial crisis and low approval rating from the public due to the oil spill in the Gulf of Mexico, British Petroleum still stands as number four on the Fortune 500 listing ("Global 500", 2013). Brief History on Major Competition

As the Chief Financial Officer of British Petroleum you must try and understand facts as to why other company’s financial statements and reports important. This particular company Royal Dutch Shell is the largest company in this gas and oil industry. The Royal Dutch Shell Company (Shell) and British Petroleum (BP) are both multibillion dollar companies. These two petroleum companies serve similar products.. The Royal Dutch Shell Company is also known as Shell and is headquartered in the Netherlands. The Royal Dutch Petroleum Company is the largest company in the world in terms of revenue. Shell is also one of the world's most valuable companies. According to "Royal Dutch Shell" (2013), "Shell topped the Fortune 500 list of largest companies in the world. Royal Dutch Shell revenue was equal to 84% of the Netherlands's $555.8 billion. It has operations in over 90 countries, produces around 3.1 million barrels of oil equivalent per day and has 44,000 service stations worldwide.” The Shell Oil Company is one of the United States largest businesses especially compared to British Petroleum, other smaller threats apply and help affect British Petroleum’s Financial Statements. Company’s Performance Position Advice

According to the data recorded in past years British Petroleum numbers have decreased a lot since the major oil spill. In order for your company to make changes I recommend that you review your organizational design. The organizational design is much more than just the structure of the company. Organizational design is the process of situating the company’s mission statement. This is thinking out side of the box to get the difference between workflow and responsibility/authority. You have to make sure they all support the good aspects of and objectives of good business. Having good organizational design means that company would have awesome communication, and production, and those are what you need to t be in a great work...

References: Royal Dutch Shell. (2013). Retrieved from http://en.wikipedia.org/wiki/Royal_Dutch_Shell
Annual Report
BP Annual Balance Sheet. (2013). Retrieved from http://www.marketwatch.com/investing/stock/bp/financials/balance-sheet
BP Accounts Payable. (2012). Retrieved from http://www.wikinvest.com/stock/BP_(BP)/Data/Accounts_Payable/2012/Q4
First oil. (2013). Retrieved from http://www.bp.com/en/global/corporate/about-bp/our- history/history-of-bp/first-oil.html
Global 500. (2013). Retrieved from http://money.cnn.com/magazines/fortune/global500/2012 /snapshots/6327.html
Products and services. (2013). Retrieved from http://www.bp.com/en/global/corporate/products- and-services.html
Socially Responsible Investment. (2013). Retrieved from http://www.bp.com/en/
global/corporate/investors/socially-responsible-investment.html
What are total assets? (2013). Retrieved from http://www.wisegeek.com/what-are-total- a ssets.html
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