Questions On Stock Valuation Of Different Companies

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A. Introduction
This document is about understanding and implementing the fundamental analysis in practical while studying its implications for the purpose of stock valuation of different companies.
In this study, fundamental analysis is performed for the stock valuation of a renowned oil and gas sector company named British Petroleum PLC (hereinafter referred to as “BP”).
To perform fundamental analysis of the stock of BP, various qualitative and quantitative factors are discussed and analyzed in detail. These include studying business model and governance structure of BP as well as financial analysis of its financial statements. Overall, economy and industry analysis is also performed to aid the study.
Finally, based on the analysis
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It has a vide customer base. It holds a sizeable market share as compared to its competitors. Competition is restricted in Oil and Gas industry by OPEC. The industry also faced strict health and safety requirements and has to observe stringent exploration and production rights regulations.
The core business model of BP involves the exploration of oil and gas resources. It has a very strong and efficient business model that is highly attractive for potential shareholders.
BP is involved in research in collaboration with many universities hence gaining advantage of latest research and highly talented employees. It deploys it seismic imaging technology to enhance the data analysis and productivity of its projects. BP has introduced world’s first automated robot to enhance its oil recovery hence providing more light oil to its customers. All these and few other steps provided a great competitive advantage to BP.
BP showed a decline in Sales in 2014, which is mainly due to price collapse in the Oil and Gas industry. It has reduced its short-term investments to improve cash flow. Due to the liabilities and obligations of BP regarding Gulf of Mexico, oil spill its interest cost has significantly increased. EPS of BP is also significantly decreased in 2014.It has also paid a good amount of dividend in 2014 which is a positive signal
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