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Investment in Bp Plc

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INVESTMENT IN BP PLC Financial Statement Analysis Compiled by MBA Association FEM 205 CONTENTS PAGE 2 1. Introduction 4 2. Snapshot 5 3. Current Performance 2006 6 4. Background 8 5. Ratio Analysis 2001 – 2005 9 6. Profitability Ratios 11 a. Return on Ordinary Shareholders Funds 11 b. Return on Capital Employed 13 c. Net Profit Margin 15 d. Gross Profit Margin 16 7. Efficiency Ratios 17 a. Average Stock Turnover Period 17 b. Average Settlement Period for Debtors / Receivables 19 c. Average Settlement Period for Creditors / Payables 20 d. Sales Revenue to Capital Employed Ratio 21 e. Sales per Employee 23 8. Liquidity Ratios 24 a. Current Ratio 24 b. Acid …show more content…

[pic] According to current figures given by the FTSE 100 as at 27 Nov 2006, BP is listed as the one of the top six listed companies with the FTSE 100. This in itself is a major achievement. BP Prides itself on being at the forefront of the sector by investing heavily in the following areas for 2006. During the current year BP has been committed to continuing improvement in the number of oil spills. It is also faced with the decision to invest $3bn at the Whiting refinery to process Canadian heavy oil. They are in the process of acquiring the wind power company, Greenlight Energy Inc. BP is responsible for funding the Cashimain Trinidad and LNG train 1 supply project in Egypt. BP is in a position to acquire additional exploration acreage in Pakistan’s, Indus Delta Coal bed, methane acreage in West Bengal, India and the North Sea. BP has made two discoveries, in the Titanian Block 31 in Angola and Kaskidain the deepwater Gulf of Mexico. These are but two of the recommendations that indicate climbing on board with BP is a magnificent investment opportunity. Further recommendations are contained within the report in the form of the ratios and comparisons. The figures speak volumes there is undoubtedly no other petrochemical company that can rival BP with the investment potential and the intended growth over the next five years. 3.

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