BP and Shell PLC Report

Business and Financial Analysis of BP with comparison to Shell PLC
2011
Dissertation Topic BUSINESS AND Financial analysis OF BRITISH PETROLEUM WITH COMPARISON TO SHELL PLC
Supervisor: - Mr. John Waites Submitted By AAMIR YAQOOB University ID: - 1092187255350 Year: 2011
Submitted in accordance with the requirements for The degree of

MASTER OF BUSINESS ADMINISTRATION At the
UNIVERSITY OF WALES
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ACKNOWLEDGEMENT:
In the name of Allah (God) the most Beneficent the Merciful
All praise to Allah, the Almighty, on whom ultimately we depend for sustenance and guidance.
First and special I offer sincerest thanks to my research supervisor MR. John Waites, who really supported me in my research work and guide me with patience and devotion to complete it to his best level, I found him not only a good research supervisor but also a good friend who really guide me in friendly way, Secondly Dr. Ana-Maria Pascal who also guide me to complete my all thesis and approve it for final submission. I also convey special thanks to my elder brothers Mr.Sohail Yaqoob and Mr.Javed Yaqoob for their indispensable help dealing with funds, special care and politeness. I realise that without their efforts, it could have not been possible for me to do MBA from UK. I would like to special thanks to my cousins Mr.Zafar Iqbal and Mr.Nasir iqbal who really help me with special care and pay my attention towards my degree, I also thanks to my friend like Mr.Naveed Zahid who support me during my work and guide me to choose right topic for my dissertation. Special thanks for my classmates and group members Mr.Abdul Hameed, Mr.Paramjit Singh and Mr.Ali Warraich who really make it possible to arrange group study and show their interest in group work, meetings and presentation.
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Finally, I am thankful to academic and administrative staff at LCB and University of Wales who gave me an opportunity to complete my degree from one of the best intuition in UK. Who designed and managed such an interesting MBA program which helps me in my career development. I offer my Special thanks to Dr.Ana-Maria Pascal (Principal and MBA Director of LCB) and all Professors and Lecturers. Your efforts and hard work will always be remembered.
Dedications:
This thesis is dedicated to My Father and Mother who has supported me all the way since the beginning of my life. I wont forget their sacrifice, love, motivation and inspiration in building up my character and personality. I would also like to dedicate my research work to my brothers and sisters who always pray for me and for my success as well.
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EXECUTIVE SUMMARY
This report is about the financial and business analysis of British Petroleum with compare to the similar type of company Shell PLC, which are the worlds 2nd and third largest Oil Companies around the globe. Both the companies are the giant of the petroleum industry. The British petroleum in the recent past few years affected by the large oil Spill of the history named as Deep water oil Spill or BP Oil Spill. The losses from this are not only to the BP itself it has affected the environment and marine life also. The environment and the marine life have recovered from this loss but the BP is still impacted from this painful event in the past. The Shell PLC in comparison is doing the business at its high performance and is in level of British Petroleum in providing the services to the petroleum industry.
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List of Abbreviations Used

PLC BP APOC AIOC ROA BA BUC Private Limited Corporation British Petroleum Anglo-Persian Oil Company Anglo-Iranian Oil Company Return on Assets Business Analyst Business Use Case
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List of Contents
Chapter 1 Introduction 1.1 Introduction 1.1.1 1.1.2 1.2 Definition Financial Analysis Background 10 11 12 13 14 14 15 15
The Significance 1.2.1 1.2.2 1.2.3 1.2.4 Financial Analysis The Scope Oil spilt in the Gulf Issues brief overview of Topic Limitation of this researcha clear statement of the dissertation
16 16
1.3 1.4
Research Questions Research Objectives reasons for the investigation and Purpose of the study
17 18 19 19 20 25 25 25 26
Chapter 2 Review of Literature 2.0 2.1 2.2 Companys Overview British Petroleum Shell PLC 2.2.1 2.2.2 2.2.3 2.2.4 Efficiency Financial Ratio Profitability Ratio ROA
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2.4.5 2.4.6 2.3
Accounts Receivable Turnover (Credit Risk) Steps for Financial Analysis
26 26 30 30
Business Analysis 2.4.1 2.4.2 Business Analysis (BA) Methods for analysing business responses for an event 2.4.3 2.4.4 Organizing the Analysis Learning from the experiences
31 32 32 33 34 35 36 36 36 37 37 39 39 39 40 41 43 43 43 43
2.5 2.6
Modelling
Summary overview to the subsequent section
Chapter 3 3.1
Research Methodology
Introduction 3.2 3.3 3.3.1 3.4 Choice of Sector The Choice of the Organization Financial Sector Information Congregation
3.5 3.6
Method of Research Data Collection 3.6.1 3.6.2 3.6.3 3.6.4 Primary Data Collection Designing of Questionnaire Surveys/Questionnaires Collection of Secondary Data
3.7
Method of Data Analysis 3.7.1 3.7.2 Reliability of Data Collected Validity of the data
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3.8 3.9
Population Study The Introduction of the Chapter That Follows
44 44 45 46 46 46 46 46
Chapter 4 Data and Analysis 4.1

4.2
Introduction Data Analysis

Collection of Data Methods
4.2.1 4.2.2 4.2.3

4.3
Wide-ranging interviewing
Surveys Company Yearly Reports
Financial analysis of the British petroleum with comparison to the Shell PLC(From Annual Financial reports of the Respective companies) 47
4.3.1 4.3.2 4.3.3 4.3.4

4.3.5 4.3.6
Assets Liabilities Liquidity Equity Share Capital

Fixed Interest bearing Funds Capital Gearing Ratio
47 47 48 49
50 50
4.3.7 4.4
Deep-water Oil spill Effect (BP Oil Spill)
51 54
Presentation of Data (From Questionnaires)
4.4.1 Working Environment 4.4.2 Financial Analysis 4.4.3 Business Analysis 4.5 Strategic Policy of the Companies
55 56 68 69
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Chapter 5 Conclusions 5.1 Investigation and argument of outcomes with position to Purpose of the study 5.2 5.2 5.3 Issues from the literature review Recommendations Suggestions 5.3.1 Through joint ventures, BP can enter the oil sands
71 71 74 74
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Production markets 5.3.2 5.3.3 Business Strategy BP can Restructures its Alternative Energy Operations 5.3.4 5.3.5 5.3.6 Take Charge of its Cash Manage inventory Areas for the Further Research
74 75
75 75 75 75 77 80 Questionnaire 80
References Appendix Appendix 2:
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Introduction
In the introductory chapter we will give overview of the research topic, its problems, aims and objectives along with hypothesis.
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INTRODUCTION The financial reporting by an organization is an allocation tool to classify the accounting data for making control and the investors able to have judgment making power. For the attainment of same purposes the companies of various countries around the globe had created the course of action to have more than annual or single financial reporting to help the cause. The financial reports of an organisation must reveal the evidences which might affect judgment of the management of the organisation or the informed readers. The financial declarations honor with benefits to the numerous people devoted to the company for e.g. predictors, company executives and shareholders and even the public allied or involved to the company as well. The data obtainable from the financial reports provides the information about the company existing situation and also the presentation in the last few years. These financial statements inspire the persons related to the company and also the people who are interested in it. The financial reporting is also the sort of check on the growth of the company over the past few years. The business and financial analysis of the company is done to evaluate the effectiveness and the paying/buying capacity of the company. The financial and the business analysis both are very important and basic for the company to check its profitability, stability buying/paying capacity, liquidity, liabilities, market strategies and structure and feasibility for the future projects of the company. The business analysis is also very much important as it gives the ability to the company or the organisation to arrange and develop more and more strategies and policies but yet it has many of the involvement of the financial analysis with this. A careful analysis of the process of observation in atomic physics has shown that the subatomic particles have no meaning as isolated entities, but can only be understood as interconnections between the preparation of an experiment and the subsequent measurement. Erwin Schrodinger
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FINANCIAL ANALYSIS: The deep-seated idea behind the financial reporting is to endow with the weight of judgment to the informed reader. The financial analysis which the majority of the companies do is to test out the profitability of the company in short and long term basis. The financial analysis of company evaluates the paying and buying aptitude of the company to the creditors and its position in the market. The liquidity is also a main reason to have the monetary analysis for the company which develops the ability to maintain the constructive cash flow from the obligations of the company.
METHODS: There are various methods for the analysis of the financial issues of the company and improve the present business situations of the company according to the present situations. A company can improve the performance in terms of financial issues and improve the business inside the company by having a good look at the past performances and existing performances and in light of these the company should develop the future expected performance for the company. The researcher had used the following under consideration to do the investigation.
Past Performances: Everything which had passed away is history but history is one thing which builds our experiences and makes us more and more professional in terms of business performances. A look at the past performances can make us enable to learn from our mistakes, policies and strategies effectiveness and also the overall view of the companys performance.
Existing performances: The Existing performance is the present situation which a company is facing and it is the true picture of what a company is doing in terms of financial matters and also the business dealings. It also shows the companys reputation in the market and its product evaluation in the market with comparison to the similar companies doing same business.
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Future Expected Performance: the future is what which nobody knows but yet we can expect by giving some outputs in short term and long term basis. It is just like doing work and expecting the result of what we had input.
Comparison with the competitors: in the end of the various expected operation and performances and analysing them completely the comparison with the different ideas and thoughts to get the clear picture of the organisation according to the situation.
BACKGROUND The study stands on the financial investigation of the British Petroleum and its premeditated preparations in the market with comparison to its contenders. The
financial reporting is the conventional format of keeping the documentation of the company which presents the information about the financial proceedings of the business, person and the supplementary entities attached to the company in any way. The need for the financial analysis and the business analysis is very important and historical in terms of improvement in the business of the company and building its reputation for better performance of the company. The British Petroleum is very old and large petroleum company which is supplying the petroleum countrywide at larger scale and for understanding the financial and business structure of the company is very much considerable. For better understanding of the financial analysis and business analysis the researcher has made a comparison of the British Petroleum with the Shell PLC which is also very large Petroleum Company and having the same business and financial structure as that of the British Petroleum. The financial analysis is usually referred as the viability, stability and profitability of a business and business analysis usually referred to as a fulfilling needs and requirements of a business by identifying the various business solutions during the ongoing performance of the company.
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BREIF HISTORY The British Petroleum is very historical and large and historical company and was established ion way back in 1901 in name of Anglo Persion Oil Company. The company during its performance has developed a lot and made many improvements and now it has gained the shape of British Petroleum and biggest Oil Company nationwide. When the comparison of British Petroleum with the Shell PLC is done the researcher come to know that the Shell is a very large organisation in its operation and services around the world.
Shell PLC (Royal Dutch Shell PLC) is one of the major petroleum products manufacturing company around the world and is very famous around the globe. Its headquarter is located in Hague, Netherlands. A very large petroleum company in its operation which doing the business from almost more than one century, it is the third largest petroleum company of the world and doing improvement in the business day by day. It is operating in more than 95 countries and providing more than 3.1 barrel of oil per day to the more than 45,000 of its stations around the world in different countries.
SIGNIFICANCE FINANCIAL ANALYSIS: The foremost thing which has to be done in financial analysis is discussed in the following opinions which are outcomes from the financial analysis as a consequence. Opening or ending any business maneuver Buying and selling of any manufactured product of the company or an organisation Arranging the requirements for the manufacturing of the products. Developing policies and strategies for investing and lending various business operations. Any other decisions which are negotiable and address them according to the rules and regulations of the company or a business organisation. The main objectives of having the financial analysis are: 1. Check cost-effectiveness: the financial analysis enables the company to check the profitability of the company for its various products in short term and long term basis during the business.
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2. Buying and paying Capacity: the financial analysis of the company also enables a company to have a idea about its buying and paying capacity to the creditors of the company. 3. Stability: the stability of the company is also checked by the financial analysis of the company which is done for the purpose of having the assessment about the strength of the company to retain in the market. 4. Solvency: is usually referred to as a ability of a com0pany or an organisation to pay its debts of the company or an organisation as a priority case.
OIL SPILLS IN THE GULF: The oil spills in the gulf which had affected a lot the consumer behavior towards the British Petroleum in the past few years in gulf. The consumers behavior had changed a lot during this period and the strategies to overcome this problem developed by the company are also the part of the research. The British Petroleum had faced more than 5 Billion Dollars in the oil spills in the gulf after which they had developed and strategy and prevention methods to avoid such kind of losses in the future are also the part of the research. Such great losses not only cause the financial losses to the company but also weaken the market position of the company against the competitors.
BRIEF OVERVIEW OF TOPIC: The financial analysis of the company is basically done for the sake of the evaluation of the strength if it is said that the financial strengths will not be wrong. The financial analysis enables to overview financial matters of the company which includes the business transactions, investments and profitability and much more which is related to the business dealings of the company. The business analysis is generally the requirement analysis which enables the company or an organisation to retain and maintain the requirements of the company or an organisation according to the present needs and circumstances.
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A CLEAR STATEMENT OF THE DISSERTATION: The main purpose and the objective of the study are to study the financial and business analysis of the British Petroleum with comparison to the Shell PLC. And also the various financial transactions and their effects on the company. On the basis of the analyzed factors and stimulating effects to the organization suggesting and figuring out the best possible remedies for the organization at each level of the business transactions. The key purpose of the dissertation is to study the issue that how the company or an organization can understand its financial and business analysis on the basis of which a company or an organisation can make the performance more and more better
THE RESEARCH QUESTIONS For the research on the British petroleum in terms of financial and Business analysis in comparison with the Shell PLC the researcher has the following questions on which researcher wants to work and analysis the data gathered to present a comparison of these two big Oil/Petroleum companies The questions for the research are What is financial analysis? Explain the financial arrangements of BP and SHELL? How much efficient is the strategic policy of BP, to grow and increase profitability of the organisation in comparison to its competitors. Who ecological aspects affect the strategic positions of BP and Shell? Who oil spill affect the consumer behaviour of BP and Shell? Which course of actions BP is using to minimize the force of the disaster event? What are the risk factors that have an effect on the operation of both organisations? How much efficient is the marketing policy of BP and Shell? Which business segment BP is focusing most of its operational activities, for example upstream or downstream?
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REASONS FOR THE INVESTIGATION AND PURPOSE OF THE STUDY However the main reason is to make the better performance of the company but the better performance of the company can be done only by having the elimination of the risk associated with the various business and financial matters of the company to have the certainty and the stability of the business terms of the company for the long period of time which build the reputation of the company in the market. The companies work under the dynamic environment which causes their future to remain uncertain and unpredictable. The uncertainty becomes more evident and the proper functioning of the organization can be effected in a great deal. Our reason behind the study is to eliminate this uncertainty and unpredictability of the organization in the future. The objective behind the research is to get the following Financial strategy of British Petroleum and Shell PLC Input characters of British Petroleum and Shell PLC marketing plans and their supposition on supermarket sector. To value the accomplishment subsequent to the British Petroleum and Shell PLC in becoming leader of the marketplace. Ways to improve financial and marketing strategy and its effect on BP and Shell.
OVERVIEW TO THE CHAPTER THAT FOLLOW In subsequent chapter researcher discusses the literature review of topic and will realize several matters and existing data to investigate the risking influences that are to affect the enactment of the organisation. The subsequent section is about the several literary rudiments and icons of the business and financial analysis, there effects and significance in the pertinent field.
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R evi ew o f L i t er a t u r e
This part of the research will intricate the different terms employed by the BP and Shell PLC in terms of Business and Financial Analysis. Moreover their strategic positioning and the market strategies are also discussed in this chapter of the research.
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2.0
COMPANYS OVERVIEW
Both of the companies are doing petroleum business and are wide in their performance and capabilities of doing business. They are considered as giants of the petroleum business as they are providing the Petroleum products at very vast range. British Petroleum and the Shell PLC are in-fact the second and the third largest Petroleum products providing Companies around the globe. Their product range and services are very much effective and up-to the International standards which make them even more reliable and efficient.
2.1 BRITISH PETROLEUM
BP is a global enterprise which is committed to meeting the worlds growing energy needs in a responsible and ethical way.
UK Ordinary Shareholder Guide
The British petroleum is rendering its services by providing the fuel for the transportation, energy, retail energy and for the petrochemical products globally. The British Petroleum is globally operated company and it is very vast in its performance almost functioning in more than 80 Nations. The Headquarter of the British Oil company is located in London, United Kingdom. The company has more than 22,400 service stations around the globe and per day it provides equal or more than 3.8 million barrel of oil History: In the year 1901 Shah of Iran has established William Knox DArcy to hunt the Petroleum who discovered it in the year 1908. In 14 April 1909, the Anglo-Persian Oil Company (APOC) established which the leading momentous discovery in the Middle East . In the year 1935 it has become Anglo-Iranian Oil Company (AIOC). With the passage of years it has developed the shape of British Oil Company which is now one of the major oil companies round the sphere.
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Objective: We [BP] are maintaining our policy of returning cash to shareholders through dividends and buybacks although we are changing the relative proportion of each. Your board has confidence in greater cash flows from our strong asset base, which has allowed the company to increase both investment in its future growth and the dividend component of our distribution to shareholders. Peter Sutherland, Chairman of British Petroleum, February 2008 Chairmans Letter BP is acquiring many standards other than the profit as in its objective: safety, people and performance. However there are many aspects of the company to focus about but in this dissertation we will focus on the performance of the company in term of its financial analysis and business analysis with comparison to the Shell PLC. This report will present the performance of the company over the past few years, and also the financial outlook of the company to the shareholders for the future performance of the company The company is committed to provide the petroleum products in different countries of the world at high standards and in timely manner. It has covered many countries of the world and has become the necessity of many countries besides which they cant do anything. Providing the better solutions for the petroleum industry and maintaining the reputation in the market and interpretation of the key elements and stimulating elements of the financial analysis of the company. 2.2 Shell PLC
Shell PLC (Royal Dutch Shell PLC) is one of the largest petroleum products manufacturing company around the world and is very renowned around the globe. Its headquarter is located in Hague, Netherlands. A very large petroleum company in its operation which doing the business from almost more than one century, it is the third largest petroleum company of the world and doing improvement in the business day by day. It is operating in more than 95 countries and providing more than 3.1 barrel of oil per day to the more than 45,000 of its stations around the world in different countries.
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History: The Royal Dutch Shell PLC was established in February 1907 as named Royal Dutch Petroleum Company the company has its roots back in 1980s when the Dutch Petroleum company was founded by Jean Baptiste August Kessler. Over the years of its performance it has acquired a good reputation and recognition in the market in Petroleum Industry.
Objective: Besides doing business and profitability the Shell PLC is committed to provide the services that are based on the consumer satisfaction and building the reliability on the products and services of the Shell PLC in the eye of the Customers Providing the consumer satisfaction packages and inventing the new methods and techniques in the petroleum industry is the main prospective objective of the company which has gathered the attention of the investors and the satisfaction and believe of the investors on the company.
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Political & Legal
Technology
Competing Organisations BP
Goods to customers Suppliers
Exxon Mobil
Materials
Labour Capital
Shell
Chevron 1st Layer Competitive Environment Total
Wages to Labour
Pollution
Profit to Investors
Economic
2 Layer 3rd Layer Physical Environment

environment
nd
Social & Cultural
Ecological
Source adapted from Business Essentials, Business Strategy, BPP learning media, pg. 25 Aspects of the external
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Financial analysis Mostly the companies generate the yearly, quarterly and half quarterly financial reports to check the profitability and financial and business analysis of the company according to the present situations. Yet the finical and business analysis are not done most often on timely basis which causes loss to the organisation and is a risking factor for any of the company or the organisation which is committed to provide a good services and do more and more business in their relevant field.
Provides an excellent long term perspective of risk and the development of methods to measure and deal with risk, Explains the shift from a focus on hazard risk to financial risk over the last few decades Bernstein, 1996, Against the Gods: The Remarkable Story of Risk, New York: John Wiley & Sons, Inc.
Decision makers and thinkers most often study these report and build the financial and business strategies for The Company or make the necessary changes in the relevant field of their on-going business To have assistance for the decision makers they are provided with the financial and business analysis reports to have a acceptance and continuing of the on-going strategies and to have a changes in the strategies or to develop new strategies. The financial analysis is all about the understand, identify, analyse and adjust the various issues inside the company.
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Political & Legal
Technology
Competing Organisations BP
Goods to customers Suppliers
Exxon Mobil
Materials
Labour Capital
Shell
Chevron Total
Wages to Labour
Pollution
Profit to Investors
Competitive Environment 1st Layer Social & Cultural
Economic
2nd Layer Physical Environment Ecological
3rd Layer
Financial Analysis: The above figure depicts the following scorecards analysis of ratios breakeven analysis and various trends
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The overall financial ratio analysis is done for the purpose of the income statement analysis and balance sheet analysis and with the supporting element of the financial scorecard tool to provide the unique picture of the organisation and its financial position in the market The financial position of the company can be analysed by having the financial ratios analyses for the income statements and balance sheet analyses which are supportive to the various tools and techniques of financial scorecard. The financial analysis of the company gives the profitability ratio of the company, liquidity, efficiency of the company and also the assets and liabilities of the company. 2.2.1 Efficiency
There are mainly the following zones of functioning competence which are to be consider A/R: Re-education in the operation of certain financial matters like cash flow, operating margins, increased probability and so on. Inventories are also the main portion and part of the Operating efficiency of the financial matters for any of the company or organisation. A/P: high Outflows are also to be considered in this regard when we are talking about the operating efficiency of the company. 2.2.2 Financial Ratio: Definition: the quantitative analysis of the companys financial information. These ratios are calculated from the present numbers and it is compared with the past year ratios and then this is presented in the form of financial ratios. Sustainable Growth: the level achieved when the company is capable of sustaining the its growth from the internally generated funds and financials of the company or the organisation It is given as G = ROE x (1-d) Where as G = Sustainable Growth ROE+ Return on the equity d = Dividend pay-out Ratio 2.2.3 Profitability Ratio: it is generally the return on the present assets occupied by the company or the organisation. It is a companys will to generate income from the assets in its occupation which we might also called as debit vs. equity
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2.2.4
ROA : ROA (Return on Assets) is generally calculated as Net Income + (1 - Tax Rate) (Interest Exp) + Min. Int. in Earnings Average Total Assets
2.4.5
Accounts Receivable Turnover (Credit Risk) Measures how soon sales will become cash Amount of sales per A/R prefer a high amount of sales to A/R Inverse of the percentage of sales from A/R = Net Sales on Account Average Accounts Receivable
Accounts Receivable Turnover
Represents a path-breaking approach to dealing with risk for insurers. Introduces the funnel of doubt terminology and explains a strategy for immunizing an insurer from interest rate risk. Redington, 1952, Review of the principles of life office valuations, Journal of the Institute of Actuaries, 78: 1-40.
2.4.6
Steps for Financial Analysis:
The financial analysis of the company can be done by following the following guidelines or steps: Step1: The very first step is to collect the financial statements of the company for last couple of years and arrange them in order form to understand and analyse the reports and statements according to the present circumstances. The data collected for this cause can be from last 3 to 5 years, will be effective enough for the financial analysis of the company. At least the business analyst of the company has to gather the following statements for last 3 to 5 years to get the effective financial analysis of the company. Balance Sheet: The balance sheet is that form of the financial declaration that recapitulates a company's assets, liabilities and shareholders' equity at a precise opinion in time.
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Formulation for Balance Sheet Assets = Liabilities + Shareholders' Equity Statement of Income: Statement for Income of the company is that form of financial statement which is usually called as profit loss statement. The income statement of the company is a part of the monetary statements the supplementary portions of the financial statements are balance sheets and the cash flows. The income statement is alienated into two folds: the functioning and non- functioning units. Statement of Shareholders equity: Arrangement of the financial statement which minutiae the behavior of the equity of the balance sheet, earnings and also the shares of the company are considerable in this regard. Cash Flow Statements; That form of the financial statements which is not dependent on the future incomes it only shows the net income in the statement. Step 2: Take a look in a glance to have a view of the major movements in the specific areas from the present year to the next year expected. For Example Checking the revenue, assets and other financial matters and answer the questions that Did revenue have a long jump? Did the revenue have fall from top to the bottom? The fixed assets fall or grown over the last period of financial analysis? Did the company had made new purchases or sell any of its operating area during the financial year? And also gather the relevant information that is helpful in financial analysis and development of the business structure of the company. Step 3: Taking the look at the information notes which are additional to financial statements of the company which might be helpful in financial analysis of the company and make the development in the relevant field. Step 4: Observe the balance sheet and make the overall analysis of the various components of the companys assets, liabilities and equity. For Example: the look at the overall equity as it has increased or decreased over the last years and what is the
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position of the liabilities either they had increased or decreased during the last financial year. The debt portion of the company has increased or decreased it should also be analysed. Step 5: observing the income statement of the company and examine the trends over the last few years calculating and graphing significantly the following entries of The Company of the past few years: Revenues (Sales of the company) Net Income(Total Profit or earning of the company over the last financial year)
After having look at these issues the company should keep an eye on the revenues either revenues or the profit of the company are growing over the time or not? The smooth functioning of the revenue and the profits are helpful and necessary for the development and proper functioning of the company at short term and long term basis. After having this step then calculation of the main components of the income statement should be done in percentages form for each year. For example: calculate the percentage cost of the goods sold and general administration expenses and overall statements of the various financial statements over the sales of the company. Step 6: The next step is to observe and examine the shareholders equity statement of the company for the last financial year. Then main thing to focus is that the company has bought back some of the shares or issued new one and also the look at the earning share as it is growing or shrinking. The main thing is that the signals of long term strategies of the company in terms of financial matters. If anything found during the analysis was suspicious the researcher should find out why it is so? Step 7: The next step in financial analysis is the examination of the cash flows statement of the company which provides the information about the inflows and outflows of the financials of the company during its operation in various business operations. The income statement gives us the information about the both cash and non-cash items of the company but the cash flows statement attempts to identify and figure out the actual cash flows of the company at the present circumstances Again in this step if anything found suspicious will have to find out by the company officials that why it is so?
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Step 8: after doing all the steps provided above the very next step is to calculate the ratios of the each of the statements for each of the year for the company over the past few years. The ratios of the following terms should be calculated Liquidity ratios: It is the representation of the financial metrics of the company which shows its ability of paying its short term and long term debts for the company. Leverage Ratio: also called as the debt ratio. Debt Ratio = liabilities / assets. This ratio is calculated as the debt to the capital ratio of the company, debt to equity ratio or financial leverage ratio. Profitability Ratios: the profitability ratios might include the following o Return on Sales (Profit Margin) Ratio o Return on Assets (ROA) Ratio o Return on Net Worth Ratio Efficiency Ratio: Ratios that are typically used to analyse how well a company uses its assets and liabilities internally Value Ratio: it is also a ratio analysis of the present value of the company in the shares of the market. After having these ratios the nest part of the analysis is the graphing of these ratios to develop the better understanding of the ratios and the financial statements of the company. Step 9: Obtain and observe the data of the competitors of the company for the relevant analysis of the various business and financial matters of the company and identify the differences between the businesses of the various companies or the group of companies. As the researcher had applied the method for the collection of the data for the Financial and business performance of the British Petroleum the researcher can follow the same pattern for acquiring the data from the other competitive companies doing the same business or working in the same field of business. The next step that a researcher had to follow is that after having the data for the competitive companies doing the same business the researcher has to analyses that is this company is favourable for the comparison or not ? Or fulfilling the research requirements and covering the topic under the research or not? If the researcher found that these companies are not fulfilling the requirement the researcher had to make further research for the more suitable and favorable companies for the comparison.
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Step 10: The next step after having the suitable and favorable comparison of the company is to have the overview of the stock price of the company over the market and having the detailed analysis of the price to the earnings ratio (P/E Ratio) for the company under the case study for the research topic. The researcher had to make the better understanding of the fluctuations in the stock market prices and the Price to earnings ratio over the specific time span. The purpose of having all these is to get the overview or the observation that the fluctuations in the prices of the stock market are favoring the company in the light of which the management of the company has to develop the future strategies and policies. Step 11: after doing the previous step the next one id the review of the dividend payout of the company and graphing of the dividend pay-out of the company for the past financial year. Step 12: the last but not the least step of the financial analysis of the company is to review and observe all the data which is collected from the above steps from the company or an organisation. The results obtained from the above steps will be the mixture of the positive and negative responses and on the bases of the above results the company has to answer the following questions to the management of the organisation and the financial department has to develop the new strategies for the future in the light of these results. This is the whole procedure for the financial analysis for any of the company either it is national or international, the companies do the financial analysis to get the clear picture of the present business policies strategies and techniques which helps for the future performances of the company in short term and long term basis. 2.3 Business analysis
Business analysis is a tool for finding the needs and requirement for the proper functioning of the business and its development in the relevant field. The companies develop a business analysis plans and strategies by which they conduct the business analysis and get the whole picture of their business and the performance on the company in the present scenario. The business analysis of the company is done by the business analyst o the company. 2.4.1 Business Analyst (BA) The Business Analyst (B.A.) is employed in the company to carrying out this task in the company which maintain a business analysis report. The report is presented to the
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Board of directors of the company for the necessary actions on the report and making the policies and strategies for the future functioning of the company or the organisation. The Business Analyst (BA) has two main traits in it. Modeller: A modeller because it understands the information, processes behaviors and internal environment of the business. The Business Analyst (BA) does this by depending upon the pure knowledge and understanding about the terms processes and influences of the business analysis in the company. Analyst: An analyst because after having the understanding of the procedures, policies and strategies of the company it analysis the present data and present it in a report form for the necessary action to be taken against it at various stages of the performance of the company. Duties/ Obligations of Business Analyst: A business analyst is a backbone for the business analysis of the company except which the company in unable to do business analysis at all. The business analyst should: Explore and discover the most demanding needs of the business which can enhance the business or can improve the performance of the company to do more business. Analyse and make improvements in the present procedures, processes and policies of the company. Presenting the most significant scopes for business projects. Utilize and take help from the models for communicating and understanding various business processes, procedures, policies and strategies of the company inside the company. Does better interpersonal communication inside the organisation Adopting systematic approach for the business and understanding the business. Methods for analysing business responses for an event
2.4.2
The business analyst can use the variety of different tools, techniques or methods of modelling to get the clear picture of what is doing around in the business. If in the present situation the current state is desired to be the future state for the company or an organisation then there is no chances of improvement in the company. This stage is the stage of making improvement and planning, developing and analysing strategies for the improvement in the various processes inside the company or an organisation.
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2.4.3
Organizing the Analysis
The business events take place outside the business but yet they are most important and significant in the field of business and business analysis. Firstly the exploration of the business events can help the cause of having the true picture from where the business has its roots. The responding to the business event with modelling is the main concerning area of the business analyst. This response from the business analyst is known as Business Use Case (BUC). The BUC is the basis of the subsequent business for the company or an organisation. 2.4.4 Learning from the experiences: Learn all you can from the mistakes of others. You won't have time to make them all yourself. ~Alfred Sheinwold
The most effective method of improvement is learning the from the past experiences and mistakes however they are made by us or any other but yet we can gain experience which can help a lot to improve the business and techniques of the business. The shell makes up for one of the top fifty percent of the biggest organizations worldwide in the field of Oil and Gas Industry. The basic business of the Shell PLC is providing the Petroleum (having other relevant product range also). According to the fortune magazine the biggest top ten ranking companies are as under 1. Royal Dutch Shell 6. Total 2. Exxon Mobil 7. ConocoPhillips 3. Wal-Mart Stores 8. ING Group 4. BP 9. Sinopec 5. Chevron 10. Toyota Motor (Source adapted from: http://money.cnn.com/magazines/fortune/global500/2009/) A strong mission statement should relate and expand from the vision statement and link four key areas: Purpose, Values, Standards and main Strategy (source adapted from: Mission model of Campbell et al, 1990, Business Studies, Ian Marcouse, pg352). Ascertaining core issues of the companies supports with the internal analysis; though to widespread the internal analysis additional investigation should be steered and explored on the companys stakeholders. Stakeholders and their objects will touch the
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companys strategy devising and arrangements. Any strategic planning that has ignored its stakeholders is not likely to prosper. Stakeholders acquire power to inspiration of operations, clienteles and government legislation and so on. for illustration: September 2000, UKs Fuel Strike organised by Cab drivers and Growers at national level, investors here shaped a compression cluster to break the government tax upsurges on fuel prices. They were chiefly representative in contradiction of the government, but the obstruction prospered and the whole republic virtually derived to a halt. No doubt this will have a knock off consequence on petroleum companies such as BP and Shell PLC. Here the investors are the end user (taxi-drivers) and the government. It is momentous to categorize and composure of the needs and projections of such assemblages, and to performance sagely in estimation of all of them in command to avoid clash and defence the corporate is as affluent as conceivable and keeps its certificate to operate. Complementary the essential of all stakeholders is predominantly significant for large liveliness companies similar Shell, one of the worlds biggest and most cost-effective international companies. Stakeholders can be categorised into three areas: Internal: employees, managers (shareholders depending on their power and influence) Connected: shareholders, customers, suppliers, financial lenders External: community, government, pressure groups and other organisations
2.5 Modelling The companies should have developed proper models to adopt inside the organisation to have a proper functioning inside the company. The modelling is also useful in that manner that it provides a basic guideline for the workforce to adopt and follow it easily and have a sample of work which they had to perform and how they had to perform. But these models should be developed according to the present situations and circumstances from which the organisation or company is passing. The effectiveness of the model become more confirmed if it is developed keeping in view the present situations and circumstances Models work when they are appropriate for the particular circumstance, but some of the best investment judgments over time have come when people recognized
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that models derived in other periods were broken or not directly relevant. Abby Joseph Cohen (American Financial analyst) 2.6 OVERVIEW TO THE SUBSEQUENT SECTION The following section is methodology which clarifies the general procedure of assortment and numerous reasons which envisioned researcher to choice the current topic for investigation Financial and Business Analysis Additionally next chapter also includes the method of collection of primary and secondary data and its importance in my research to deal and analyze the various aspects of financial analysis in short and long term basis and also its importance for the organisation to collect such kind of data periodically. Furthermore the samples and the data of the various analysis of the different financial terms and its methods tools and techniques to collect the data from the various sectors of the company or an organisation The chapter will also include the key procedures, methods and techniques for the collection of the primary and secondary data for the qualitative and quantitative analysis of the various financial ratios of the company.
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Methodology
In This part of the research the researcher had focused the various methods and procedures for carrying out the research. Moreover the qualitative as well as the quantitative research for both of the Petroleum companies is also discussed in terms of Business and Financial Analysis.
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1.1 RESEARCH METHODS- INTRODUCTION Topic Assortment The selected topic Business and the Financial Analysis is very much perceptible in the arena of commercial and pecuniary sector for most of the administrations internationally. The topic was familiarized to the investigator by (Named Name of Lectures of thesis) who conveys me the adequate material regarding the central concerns of the issue. The lectures on the designated subject by the instructors have occupied the attention of the investigator to go through it for advance study. After having a thorough study of the topic by the investigator the consideration of the researcher had been congregated more toward it and treasures it motivating and the significant one. 3.2 Choice of Sector
After the assortment of the topic the choice of the sector become the subsequent part of the range process for the investigation. The financial and business scrutiny is very deep and stimulating topic which has to cover virtually all the imperative segments of the business area and the financial matters of any of the business corporation around the globe. The economic and commercial analysis is the one of the stimulating and key topic for the investigation for any of the company as it is the topic which can pronounce and make better the business of the organization and surge the lucrativeness of the company. 3.3 The Choice of the Organization
For the financial and business analysis the investigator had preferred the British Petroleum one of the largest Petroleum Company around the world and has taken the Shell PLC as in comparison with the similar type of company as British Petroleum in terms of its services and product manufacturing. The reason for selecting the larger Petroleum companies is to get the clear understanding of the financial and business matters of the company and the in comparison the Shell PLC is taken because it is also a larger Petroleum company and has the same working as that of the British Petroleum. The comparisons of these two companies are taken for the development of the complete understanding and analysis of the topic under the research.
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The major working of the BP in the field of petroleum products is very much effective but the Shell being more reliable and effective have edge on many of the factors in terms of business and financial sector. 3.3.1 Financial Sector British Petroleum (BP) is a large Petroleum product providing company which has a huge impact on the globe in financial sector The Company though also pacts with the supervision of economic matters. The economic matters in this company and in the organization live this contains, investment, acknowledgment, investment, insurances and corporate governance. The organization customarily pacts with the fiscal statements in terms of business dealing and management of the business. The organization nevertheless have objective to deliver the decent and esteemed products to customers but also in turn do upsurge the economic capitals after trade of these products. The organization is mostly having the financial matter which affects the business matters of the organization at various stages of its performance which are the main concern of the research for the researcher during carrying out of this research. The organization is also affected by the fluctuation in the global market and variation and inflation in the global market. 3.4 Information Congregation
While doing research on Financial and business analysis the material gathering from and for the company correlated to the theme is very much point of apprehension to convey research proficiently and efficaciously. The researcher had collected the
basic information from the newspapers, articles and generals for the developing the better understanding of the topic furthermore supported by the financial reports and books related to the topic under the research. The information collecting is unswervingly allied to primary and secondary data gathering from the company. The collection of the both type of data collection is done by various methods, tools and techniques. The data collected is both Primary and secondary data but mostly the research is based on the secondary data as it is more valuable for the research purpose. Primary Data The primary data is the basic one for the collection of data as it is the information recorded in the files and information of the company as it is gathered by the auditors of
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the company for keeping the different types of records of the company. The data which is collected directly from the auditors and maintained inside the company by the auditors itself is recognized as a primary data and the method is acknowledged as primary data collection. The researcher had contacted the company for the purpose of the primary data collection, however find it difficult the cooperation from the company regarding the primary data collection but yet the researcher managed to collect some of the important data which was found useful for the topic under the research. Secondary Data The secondary data is the data which is collected from any source which is other than the auditors source of the company and it is the data which is derived or based on the analysis of the various data of the company. Method: The researcher had used both of the methods for the purpose of data gathering (both primary and secondary). The researcher had collected the primary data by Observation Communication Feedback from self-administered questions
Then the researcher had done the secondary data collection from the relevant books, articles, essays and journals etc., related to the topic under investigation. The Economic Reports/yearly reports are also basis for the secondary data assortment. Qualitative and quantitative investigations together have been source of the methodologies in this investigation. The qualitative technique of the investigation is helpful in attainment of deeper understanding of the hitches connecting to the financing and business transactions prepared by the company at several phases of the performance. The quantitative technique of the investigation is substantial for examining the influence of the economic and business analysis of company, investigation done is enlightening, explorative and elaborating to the issue of economic analysis and the business analysis
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3.5
Method of Research
For the healthier understanding and brief amplification of the several kinds of control actions and influence on the operative of the company the British Petroleum (BP) has been selected as a case study and also for the business and economic analysis. Previously the British Petroleum is chosen as the case study for the research because it is very large organization and is very useful for making the understanding of the various topics of the research but the researcher had chosen the financial and business analysis as the research topic and the British Petroleum as the case study and also the Shell PLC which is also a very large organization in terms of Petroleum product supplier is chosen as the comparison for the British Petroleum. 3.6 Data Collection
This section of the chapter is about the data collection (Primary and Secondary) and the various methods, tools and techniques which are useful in collection of the data. Moreover this section will also explain the questionnaires importance in the research and their designing for the purpose of the collection of the data. 3.6.1 Primary Data Collection
Primary data is collected by the observation, communication and the self-designed questionnaires. The primary data is collected by these three main elements which are very handy and useful for the purpose of the collection of the primary data for any of the research topic. For the purpose of the collection of the primary data the researcher had designed the questionnaires which are designed keeping in view the company profile and the research topic Financial and Business Analysis of the British Petroleum with comparison to the Shell PLC The purpose of gathering the primary data is that it provides the first hand information about the topic to the researcher instantly and it provides the handy and useful information. The original and authentic data collected for the success of singular determination and also prove some time as problem solver for many trouble-shootings. Information gathered on the pattern of secondary data gathering emphases specific area or topic and also the technique for secondary data collection is reasonably classy and time overwhelming for the investigator but the consequence of the research become more efficient and focused according to the topic.
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In this investigation the investigator had intended the surveys for gathering of the primary data keeping in opinion the economic and business examination. The surveys in (Appendix II) are intended together the absorbed and authentic and useful information about the Economic analysis, its effects, causes and presentation methods. The information however itself is not fit and feasible to takeout but the consequence and analysis from the information is very much obliging and important to support and authorize the views about the subject. The primary data is collected by the following methods: a. OBSERVATION The observation is the first step of the primary data collection as it is the most authentic and it provides valuable information. The observation of the various matters which are related to the financial and business analysis of the company are observed directly by the observer for the purpose of the research on the topic. Besides its authenticity and importance it has many disadvantages on it part. It has limited measure behaviour, time consuming and is subject to the investigator bias. b. COMMUNICATION
The communication is also the method of the primary data collection it is done by the personally taken interviews by the researcher from the different officials of the company for the purpose of the research. It is also very effective method for the collection of the primary data but yet it also has some drawbacks in it. It can be the biased one as it is based on the information of the two people only investigator and the interviewer. 3.6.2 Designing of Questionnaire
The surveys are intended to support and demonstrate the investigation on the designated subject of Economic and business analysis and numerous matters connected to it that how the hazards are recognized measured, documented, considered and control for the improvement of the company. Many more responses to the rising inquiries are provided by the information congregated through these surveys. The surveys are divided into sections to achieve the specific information and separate it easily. The questionnaires are designed to complete the information about the Economic and business analysis and the internal control of the company but the Economic and business analysis and internal control arrangement are actual extensive matters to insure in the surveys yet the investigator had tried to shield maximum of them.
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3.6.3
Surveys/Questionnaires
The investigator had organised the semi-structured surveys which are both open ended and close ended fixated to accomplish the concentrated evidence about the matter. After having all these things done the investigator had delivered the surveys to the contact individual in the Company BP (British Petroleum) to gather the information. The researcher had prepared the two types of the questionnaires which are 1) OPEN-ENDED QUESTIONS: The open ended questions are those questionnaires in which the respondent has the full authority to answer the questions in their own wording. Significance: It eliminates the factor of the answering the forced answer or choice from the answers provided The answers or the responses from the respondents come with the new issues and new unlimited variety of the responses. Drawback: It comes with the responses of the respondent which comes with the biased answers The responses from the responded comes with the difficult answers to code and analyse in short time fame Best Application; Small scale for the collection of the primary data Establishing the relationships of various maters and issues of the topic under the researcher. Also used as the final option after asking the all possible answers for the choice It is also used for the collection of the facts and figures with compete views.
2) CLOSED-ENDED QUESTIONS: The close ended questions are those questions in which the respondents have to choose from the answers provided in the questionnaires and the respondents are bound to answer from the provided answers. It can be of various different types. A) Yes No Questions: In this type of the respondents are partial to a optimistic or adverse situations.
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Importance: It reduces the fact of being biased answers from the respondents as it is totally based on the positive and the negative responses from the respondent. The responses collected from this type of the questions are done quickly and fast time saving. The coding of this type of the questions is very simple and inexpensive
Drawbacks: Limited type of the response from the respondent Wording can cause biases from these type of the questions.
Best Application: The best application of this type of the questionnaire is during the interview when there is not much time for the interviewer to gather the detail data and it saves time. It is also very useful for the self-administered questionnaires when the topic under the research permits. B) Multiple Choice Questions: In this type of the questions the respondents are limited to choice of more than two positions. The multiple type of questions have mostly four to five options of answering the provided questions which suits best to the question asked. Significance: This type of the questions minimizes the biased answers from the investigator The response from the respondent through this type of the questionnaire is quick and fast. The coding of this type of the questions is very simple and inexpensive It permits the greater range of the responses other than the yes or no answers.
Drawbacks: good questions are difficult to write wording can cause biases
Best Application The best application of this type of the questionnaire is during the interview when there is not much time for the interviewer to gather the detail data and it saves time. It is also very useful for the self-administered questionnaires when the topic under the research permits.
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C) Rating Scales: Respondent rates an attribute using the provided scale. 3.6.4 Collection of Secondary Data
Investigator initiated the exploration for the secondary data by glancing on the onternet about the subject and found certain of them of his attention which are the rudimentary step of his secondary data collection. More hunts on the subject leads the researcher to the aiding books, articles and periodicals inscribed on the economic analysis. Though the investigator found it problematic to catch any book which is exactly about his investigation subject only but numerous books are conversing partly about the subject which was also co-operative to the researcher. 3.7 Method of Data Analysis
This portion of the investigation discusses the examination of the data gathered (either it is primary or it is secondary data). The ladders which are complicated for the process of analysing of data will also come under attention. The significant practises which are cast-off are qualitative and quantitative analysis. 3.7.1 Reliability of Data Collected
The most important factor during the data collection is that the data gathered by the investigator should be reliable and authentic. The dependency of the datas reliability is upon the measures taking during its collection by the researcher. The data gathered is helpful for measures to be taken in the nearby future by the company. The gathered is used by the researcher for measures to be considered in the future by the company. The reliability of the measures depends upon the consuction of the research which should be accurate in all respect. The research depends on the following questions (1) (2) (3) How accurate is the investigation directed. Explanation of the data is precise and up-to-date? What is genuineness of the documents prepared by the investigator or referenced by the investigator 3.7.2 Validity of the data
The validity of the data collected and analysed is defined by forte of assumptions, implications or proportions.
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The validity of the data is directly stated as the relevance of the data. The data will be valid until the data is relevant for the research. The validity of the data is more appreciable when it is referenced accordingly and precisely. The investigator saw a clear and evident linking among the Economic and business analysis and the internal control system in the light of valid data collected by him. 3.8 Population Study
The investigator has chosen the British Petroleum (BP), one of the largest petroleum products providing company around the world which deals with various financial matters inside it. The British Petroleum (BP) is very historic, huge and operative petroleum company and was established ion way back in 1901 in name of Anglo Persion Oil Company. The company during its performance has developed a lot and made many improvements and now it has gained the shape of British Petroleum and biggest Oil Company nationwide. The comparison of the British Petroleum is done with the Shell PLC which is also a very large organization. Shell PLC (Royal Dutch Shell PLC) is one of the largest petroleum products manufacturing company around the world and is very renowned around the globe. Its headquarter is lo cated in Hague, Netherlands. A very large petroleum company in its operation which doing the business from almost more than one century, it is the third largest petroleum company of the world and doing improvement in the business day by day. It is operating in more than 95 countries and providing more than 3.1 barrel of oil per day to the more than 45,000 of its stations around the world in different countries. 3.9 THE INTRODUCTION OF THE CHAPTER THAT FOLLOWS
The following chapter of the research is totally based on the interpretation and representation of the data which is collected from the primary and secondary resources as discussed in this chapter.
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Data and Analysis

This part of the research is truly based on the representation and interpretation of the data collected as described in the previous chapter of the research. However the reliability and efficiency of the data depends on the method of the data collected.
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4.1.
Data Analysis
The data analysis chapter is not only based on the data collected from the questionnaire but also the various reports previously released by the companies and also the oil spills during the last few years which had effected a lot to the both of the Petroleum Companies (BP and Shell PLC)
4.2 Collection of Data Methods
Collecting the relevant data and its interpretation is the key part of the research for any of the investigating. The following portions to this will take on the data collection for the research issues.
4.2.1 Wide-ranging interviewing
The researcher had taken several un-official interviews of the employment of the company for getting the information regarding the topic under the research. The researcher had also made several un official talks and discussion on the topic with the employment of the company related to the financial and business analysis issues of the company and concluded several results on the light of which he had communicated further with the different employment of the company and in the light of all the results had designed the questionnaires to get the effective information on the topic under the research.
4.2.2 Surveys
The questionnaires are premeditated to get the associated evidence which is supportive for the empathetic of the theme under dialogue and for making the better judgement of both of the companies (British Petroleum and Shell PLC)
4.2.3 Company Yearly Reports
The annual reports of the company are also very important in financial and business analysis of the company and are very significant in terms of having overview of the companys performance in the last financial year. The annual reports also depicts the overall business, ups and down in the business throughout the year and the company investments, assets and liabilities are also shown in these reports which are extremely helpful and supportive in terms of having the financial and the business analysis of the company.
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4.3
Financial analysis of the British petroleum with comparison to the Shell PLC(From Annual Financial reports of the respective companies)
This section will discuss the financial analysis off the British Petroleum with comparison to the Shell PLC and various aspects of the financial analysis with the help of charts and graphs for the presentation of the data. Moreover this section contain only the data collected from the annual reports of the respective companies and analysed from different point of view for the purpose of the research on the topic under discussion.
4.3.1 Assets
The valuable assets of British Petroleum and the Shell PLC are as under in comparison to get the overall valuation of the assets of the company individually over the last five years.
Year British Petroleum Shell PLC 2006 74,261,000
97,892,000
2007 78,916,000
9,18,85,000
2008 66,384,000
11,53,97,000
2009 67,653,000
9,64,57,000
2010 71369000 105937000
Graph:1 (Current Assets of the British Petroleum and Shell PLC)
Assets of BP and Shell PLC For Last 5 Years

150000000 100000000 50000000 0 Assets
2006
2007
2008
2009
2010
British Petroleum 74261000 78,916,000 66,384,000 67,653,000 71369000 Shell PLC 97,892,000 91885000 115397000 96457000 105937000
4.3.2
Liabilities
The liabilities of the British Petroleum and the Shell PLC are as under in comparison to get the overall valuation of the liabilities the company individually over the last five years.
British Petroleum Shell PLC 2006 75298000 76748000 2007 77068000 94384000 2008 69793000 105529000 2009 59320000 84789000 2010 58320000 86789000
Graph: 2 (Current Liabilities of the British Petroleum and Shell PLC)
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Liabilities of BP and Shell PLC For Last 5 Years

100000000
Liabilities
80000000 60000000 40000000 20000000 0 2006 2007 2008 2009 2010
British Petroleum 75298000 77,068,000 69,793,000 59,320,000 58320000 Shell PLC 76,748,000 94384000 10529000 84789000 86789000
4.3.3
Liquidity
The liquidity is the ratio off assets over the liabilities of the company. The liquidity ratio of the British Petroleum and the Shell PLC are as under in comparison to get the overall liquidity of the company individually over the last five years.
British Petroleum Shell PLC 2006 0.99 1.20 2007 1.02 1.22 2008 0.95 1.10 2009 1.14 1.12 2010 1.22 1.23
Graph: 3 (Liquidity ratio of the British Petroleum and Shell PLC)
Liquidity ratio of the British Petroleum and Shell PLC for last 5 Years
1.5
Liquidity
1 0.5 0 British Petroleum Shell PLC 2006 0.99 1.2 2007 1.02 1.22 2008 0.95 1.1 2009 1.14 1.12 2010 1.22 1.23
The liquidity ratio represents or depicts the ability of the company to meet its short term objectives over the given period of time. The above ratio is the ratio of assets over liabilities of British Petroleum and the Shell PLC which is known as the Liquidity Ratio as we know
Liquidity Ratio = Total Assets of the company / total Liabilities of the company
The liquidity ratio between the values of 1 to 1.5 is fine and shows the ability of the company to meet the short term objectives is good enough. If the value exceeds over the value of the 1.5 then we can say that the company is utilizing its liquid
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assets at its best but if the value decreases below the limit of 1 it shows the inability or we can say that the company is facing the problem to meet its needs for the achievement of the short term objects. In the graph 3 (Liquidity ratio of the British Petroleum and Shell PLC) the liquidity of both the companies are showing good but for the British petroleum tin the year 2006 and also in the year 2008 the liquidity is below the standard value of the companies to meet the short term objectives for the company over the given period of time. Hence from the above data the research comes to the point that the British Petroleum due to decrease in the liquidity ratio of the company below the standard value faces problems in achievements of the short term objectives.
4.3.4 Equity Share Capital
The equity share capital of the British Petroleum and the Shell PLC are as under in comparison to get the overall valuation of the equity share capitals the company individually over the last five years.
British Petroleum Shell PLC 2006 70000000 55084000 2007 79925000 51355000 2008 82789000 50901000 2009 84053000 73292000 2010 92789000 61381000
Graph:4 (Equity Share Capital of the British Petroleum and Shell PLC)
Equity Share Capital of the British Petroleum and Shell PLC

100000000 90000000 80000000 70000000 60000000 50000000 40000000 30000000 20000000 10000000 0 British Petroleum Shell PLC 2006 70000000 55084000 2007 79925000 51355000 2008 82789000 50901000 2009 8453000 73292000 2010 92789000 61381000
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4.3.5
Fixed Interest bearing Funds
The fixed interest bearing funds of the British Petroleum and the Shell PLC are as under in comparison to get the overall valuation of the fixed interest bearing funds of the company individually over the last five years.
2006 British Petroleum Shell PLC 105726000 123960000 127285000 136431000 137234000 84624000 2007 93690000` 2008 91303000 2009 101613000 2010 98304000
Graph:4 (Fixed Interest Bearing Fund of the British Petroleum and Shell PLC)
Fixed Interest Bearing Fund of the British Petroleum and Shell PLC
Fixed Interest Bearing Funds
160000000 140000000 120000000 100000000 80000000 60000000 40000000 20000000 0 British Petroleum Shell PLC 2006 84624000 105726000 2007 93690000 123960000 2008 91303000 127285000 2009 101613000 136431000 2010 98304000 137234000
4.3.6
Capital Gearing Ratio
The capital gearing ratio can be calculated from the from the equity share capital and the fixed interest bearing funds The capital gearing ratio can be calculated by having the ratio of these two values as Capital Gearing Ratio = Equity Share Capital / Fixed Interest bearing funds From having the ratios calculated from the above two articles the researcher come to know the following gearing ratios for the British Petroleum Company and the Shell PLC
British Petroleum Shell PLC 2006 82.72 52.10 2007 85.31 43.09 2008 90.68 39.9 2009 82.72 53.72 2010 94.2 58.14
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Capital Gearing Ratio of British Petroleum and Shell PLC

100 90 80 Captial Gearing Ratio 70 60 50 40 30 20 10 0 British Petroleum Shell PLC 2006 82.72 52.1 2007 85.31 43.09 2008 90.68 39.9 2009 82.72 53.72 2010 94.2 58.14
The capital gearing ratio of the company is used to analyse the organisational structure and its firmness in the market for the business. It simply shows the ability of the company to pay the dividend and the fixed interest bearing. The above table and graph shows that the reverse position of the British petroleum is better than that of the Shell PLC.
4.3.7 Deep-water Oil spill Effect (BP Oil Spill)
The deep water oil spill in Mexico which has last for the three months in the year 2010 is very painful episode for the BP which has affected the mainstay of the BP has affected a lot in terms of business and financials. The following table gives a true picture of the loss to the BP due to the Oil Spills
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Approximation of the oil Spills According to the BP Information Source Approximation by BP Approximation By USCG (United States Coast Guard) BP and United States Coast Guard Official approximations Official approximations Official approximations Drift Percentage Technical Group International BP Approximation Official approximations Date Documented 23rd of April 24th of April 29th of April 27th of May 10th of June 19th of June 20th of June Approx. Barrel/day 162,000 0 1,000 5,000 19,000 30,000 60,000 150,000 Gallons/day 6,800,000 0 42,000 210,000 800,000 1,300,000 2,500,000 4,200,000 2,604,000 m3/day 25,800 0 160 790 3,000 4,800 9,500 16,000 9,857
2nd of August 62,000
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Approx. Barrel/day
Approximation by BP Documented
Approximation By USCG (United States Coast Guard) 23rd of April

BP and United States Coast Guard 24th of April Official approximations 29th of April Official approximations 27th of May Official approximations 10th of June Drift Percentage Technical Group 19th of June International BP Approximation 20th of June Official approximations 2nd of August
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Classification Direct retrieval from wellhead Scorched at the surface Browsed from the surface Chemically disseminated Naturally disseminated Vaporised or liquefied Outstanding residual
Approximation Substitute 1 Substitute 2 17% 5% 3% 8% 16% 25% 26% 17% 5% 3% 10% 20% 32% 13% 17% 5% 3% 6% 12% 18% 39%
Outstanding residual Vaporised or liquefied Naturally disseminated Approximation Chemically disseminated Browsed from the surface Scorched at the surface Direct retrieval from wellhead 0% 10% 20% 30% 40% 50% 60% 70% 80% Substitute 1 Substitute 2
According to the above estimation about the 75 % of the oil from the BP lost in the environment of the Gulf and caused a painful damage to the business and financial competition with its competitors.
4.4 Presentation of Data (From Questionnaires)
This section of the chapter will include the presentation of the data collected from the questionnaire and presented with the help of graphs and tables to get the better
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understanding of the terms and techniques in financial and business analysis of various matters of the company. 4.4.1 Working Environment For the proper functioning of the company there is always a need to have a good and friendly working environment for the employment of the company to work at their best capacity. In other words we can say that for achieving the best capacity of the work that the employment of the organisation or a company is capable of doing is only possible when the working environment of the company suits the employments needs and satisfaction. For the purpose of evaluation of the working environment of the both of the companies (British Petroleum and the Shell PLC) the researcher had designed the questionnaire to get the overview of the working environment of both of the companies. Every large organisation and companies develop strategies and polices for creating the better workforce for improvement in the business and for that purpose the creating of the working environment suitable for the employment of the organisation or the company is must. There many factors which affects the working environment of the company. The availability of the latest equipments, incentives and benefits to the employment of the company, friendly environment and proper strategies, policies and techniques help the cause. The more the availability of the factors discuss above more improvement will be in the working environment of the company or the organisation in short term or on the long term basis.
100% 80% 60% 40% 20% 0% British Petroleum Shell PLC Latest Quipments Incentives and Benefits Friendly Environment Strategies and policies
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The above graphs discussing the various factors helpful for the betterment of the working environment of the company shows that the working environment of the both of the companies almost resembles each other and almost has no difference in overall comparison in this regard. 4.4.2 Financial Analysis A. BRITISH PETROLEUM
1) Company has a strong policies and strategies to make the financial analysis at various stages of the business.
Response from the respondents

SDA DN 6% 3% A 20%
DA 2%
SA 69%
The response from the respondent of the British Petroleum suggest that the company has strategies and polices for the financial analysis of the company but yet the documentation of these needs revision to get the more positive response from the employment of the company which will built more healthy and affective financial analysis system for the company in the future.
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2) The financial statements of the company are developed for the analysis of the financial strengths and weaknesses and are unbiased views of the present situation of the company.
Response fromDN the respondents

SDA 7% 3% SA 28% A 52%
DA 10%
The above chart depicts the valuation of the financial reports which shows a mix views from the respondents of the British Petroleum company but most of them agreed to the fact that the financial reports prepared by the company are unbiased and neutral. 3) The company has a well-documented and established financial policies and strategies for the business dealings

SDA 10% SA 10% DN 5% A 40%
DA 35%
However the company might have well documented and established financial policies but the above chart shows the unawareness among the employment of the British Petroleum Company about the policies, strategies and techniques.
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4) The financial strength of the company has increased during the last five years.

SDA 5% A 38% SA 52%
DN 0%
DA 5%
The above chart for the British petroleum company clearly depicts the awareness and appreciation of the financial strength of the company which had increased during the last five years of its performance. 5) The present polices and strategies of the financial matters inside the organisation are satisfactory and needs no changing

SDA 10% DN 0% A 17%
SA 43%
DA 30%
The respondents of the British Petroleum company responses to the fact that there is a need of changes in the present policies and strategies for the financial matters of the organisation. There is a different opinion from the different respondents but after analysing the whole chart we can say that the respondents do want changes in the present policies and strategies related to the financial
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matters of the company to make the performance of the company even better from the past. 6) The present polices and strategies of the financial matters inside the organisation are not satisfactory and need revisions at various stages.

SDA 10%
DN 0%
SA 30%
A 50%
DA 10%
On the question of the revision of the policies and strategies of the financial policies of the company there is a strong agreement of the employment of the company in the answer. The respondents from the British Petroleum wants clear changes in the present policies and strategies of the company related to the financial matters of the company. The present stability of the company in the market is improving past few years

SDA 6% DN 3% A 20%
DA 2%
SA 69%
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The respondent of the British petroleum agrees with the fact that the stability of the company has increased a lot in the past few years and in present the companys policies and business is stable in the market. The stability of the company is improved at the present as compare to the past few years stability of the company in the market. 7) The liquidity and the profitability of the company is increasing in past few years

SDA 6% DN 3% A 20%
DA 2%
SA 69%
The respondents response against the above question suggests that the companys profitability and the liquidity has increased in the past few years. And company had gained more profit as compare to the last few years. 8) The paying and buying capacity of the company is increased in past few years
Response from the respondents DN

SDA 6% 3% A 20% DA 5%
SA 66%
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The response from the respondents of the British petroleum company suggest that the increase in the buying and selling capacity is noticed in the last few years and at the present the buying and the selling capacity of the company had reached its maximum level. 9) The assets of the company are more than the liabilities of the company
Response from the respondents DN

SDA 9% 3% A 17% DA 8% SA 63%
The respondents of the British petroleum responses to the fact that the company occupied more assets than the liabilities on it which shows that the company is presently in profit and doing good business. The assets of the company had increased a lot in the last few years however there is a slight decreased in the liabilities of the company yet in profit.
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B. Shell PLC
1) Company has a strong policies and strategies to make the financial analysis at various stages of the business.

SDA 6% DN 3% A 20% DA 2%
SA 69%
The response from the respondent of the Shell PLC suggest that the company has strategies and polices for the financial analysis of the company but yet the documentation of these needs revision to get the more positive response from the employment of the company which will built more healthy and affective financial analysis system for the company in the future.
2) The financial statements of the company are developed for the analysis of the financial strengths and weaknesses and are unbiased views of the present situation of the company.
Response from the respondents SDA

SA 11% DA 10% DN 7% 0%
A 72%
The above chart depicts the valuation of the financial reports which shows a mix views from the respondents of the Shell PLC Company but most of them
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agreed to the fact that the financial reports prepared by the company are unbiased and neutral. 3) The company has a well-documented and established financial policies and strategies for the business dealings
Response from the respondents SDA

SA 10% 5% DN 0% A 50% DA 35%
However the company might have well documented and established financial policies but the above chart shows the unawareness among the employment of the Shell PLC Company about the policies, strategies and techniques. 4) The financial strength of the company has increased during the last five years.
DN 0%

SDA 5% A 18% DA 5%
SA 72%
The above chart for the Shell PLC Company clearly depicts the awareness and appreciation of the financial strength of the company which had increased during the last five years of its performance.
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5) The present polices and strategies of the financial matters inside the organisation are satisfactory and needs no changing

SDA 26% A 24%
DN 0%
SA 26%
DA 24%
The respondents of the Shell PLC company responses to the fact that there is a need of changes in the present policies and strategies for the financial matters of the organisation. There is a different opinion from the different respondents but after analysing the whole chart we can say that the respondents do want changes in the present policies and strategies related to the financial matters of the company to make the performance of the company even better from the past. 6) The present polices and strategies of the financial matters inside the organisation are not satisfactory and need revisions at various stages.
DN 0%

SDA 15% A 45% SA 35% DA 5%
On the question of the revision of the policies and strategies of the financial policies of the company there is a strong agreement of the
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employment of the company in the answer. The respondents from the Shell PLC wants clear changes in the present policies and strategies of the company related to the financial matters of the company. 7) The present stability of the company in the market is improving past few years

SDA DN 6% 3% A 9% DA 2%
SA 80%
The respondent of the Shell PLC agrees with the fact that the stability of the company has increased a lot in the past few years and in present the companys policies and business is stable in the market. The stability of the company is improved at the present as compare to the past few years stability of the company in the market.
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8) The liquidity and the profitability of the company is increasing in past few years

SDA 6% DN 4% A 22% DA 3% SA 65%
The respondents response against the above question suggests that the companys profitability and the liquidity has increased in the past few years. And company had gained more profit as compare to the last few years. 9) The paying and buying capacity of the company is increased in past few years

SDA 6% DN 3% A 20% DA 5%
SA 66%
The response from the respondents of the Shell PLC company suggest that the increase in the buying and selling capacity is noticed in the last few years and at the present the buying and the selling capacity of the company had reached its maximum level.
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10)
The assets of the company are more than the liabilities of the
company

SDA 9% DN 3% A 17% DA 8%
SA 63%
The respondents of the Shell PLC responses to the fact that the company occupied more assets than the liabilities on it which shows that the company is presently in profit and doing good business. The assets of the company had increased a lot in the last few years however there is a slight decreased in the liabilities of the company yet in profit.
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4.4.3 Business Analysis
Chart Title
Business Analysis Financial Reporting Feasibility Reporting Planning for the future Projects Risk management Financial Policies Market Structure Market Strategies Stability in Market Reputation Liquidity Profitability Buying/ Paying Capacity 0 20 40 60 80 100
Shell PLC
Planni Buyin Stabili Marke Marke Financ Risk ng forFeasib Financ Busine g/ ProfitLiquidi Reput ty in t t ial mana the ility ial ss Paying ability ty ationMarke StrateStruct PoliciegemefutureReporRepor Analys Capaci t gies ure s nt Projec ting ting is ty ts 58 88 38 95 80 65 60 80 65 40 35 85 75 78 28 90 70 59 50 75 58 30 15 70 65
British Petroleum 68
The business analysis of the company shows the following trends as shown in the diagram.
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4.5
STRATEGIC POLICY OF THE COMPANIES
The strategic policies of both of the petroleum companies are almost same in before last few years but after the great incident of BP oil Spills in the last couple of years a dramatic change in the strategic policy of the British petroleum has come in front. The major change had been made by the management of the British Petroleum after the incident of the Oil Spill is the main course of interest for the researcher. The British petroleum has now built a new strategic planning to meet the losses from the oil spill in the Gulf and had recovered a lot but yet they had to do more on this factor.
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CONCLUSION
This chapter of the research is the final one which will include the conclusions and the recommendations in the light of all the discussion on the topic under investigation. Moreover the further areas of the research on this topic will also be discussed.
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5.1
Investigation and argument of outcomes with position to purpose of the study.
The monetary and the commercial analysis both are very important and basic for the company to check its profitability, stability buying/paying capacity, liquidity, liabilities, market strategies and structure and feasibility for the future projects of the company. There are various methods for the analysis of the financial issues of the company and improve the present business situations of the company according to the present situations. The British Petroleum is very historical and large and historical company and was established ion way back in 1901 in name of Anglo Persion Oil Company. The company during its performance has developed a lot and made many improvements and now it has gained the shape of British Petroleum and biggest Oil Company nationwide. When the comparison of British Petroleum with the Shell PLC is done the researcher come to know that the Shell is a very large organisation in its operation and services around the world. Shell PLC (Royal Dutch Shell PLC) is one of the largest petroleum products manufacturing company around the world and is very renowned around the globe. Its headquarter is located in Hague, Netherlands. 5.2 Issues from the literature review.
The British Petroleum is one of the largest Oil and Gas Companies which is rendering there services to provide fuel for transportation, energy, retail energy and for petrochemical products around the globe. The company is committed to provide the petroleum products in different countries of the world at high standards and in timely manner. It has covered many countries of the world and has become the necessity of many countries besides which they cant do anything. Shell PLC (Royal Dutch Shell PLC) is one of the largest petroleum products manufacturing company around the world and is very renowned around the globe. Its headquarter is located in Hague, Netherlands. A very large petroleum company in its operation which doing the business from almost more than one century, it is the third largest petroleum company of the world and doing improvement in the business day by day. It is operating in more than 95 countries and providing more than 3.1 barrel of oil per day to the more than 45,000 of its stations around the world in different countries. The overall financial ratio analysis is done for the purpose of the income statement analysis and balance sheet analysis and with the supporting element of the financial scorecard tool to provide the unique picture of the organisation and its financial position in the market
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Income statement of the company is that form of financial statement which is usually called as profit loss statement. The income statement of the company is a part of the financial statements the other parts of the financial statements are balance sheet and the cash flows. The income statement is divided into two portions: the functioning and non- functioning sectors. Business analysis is a tool for finding the needs and requirement for the proper functioning of the business and its development in the relevant field. The companies develop a business analysis plans and strategies by which they conduct the business analysis and get the whole picture of their business and the performance on the company in the present scenario. The business analysis of the company is done by the business analyst o the company. The Business Analyst (B.A.) is employed in the company to carrying out this task in the company which maintain a business analysis report. The report is presented to the Board of directors of the company for the necessary actions on the report and making the policies and strategies for the future functioning of the company or the organisation. The companies should have developed proper models to adopt inside the organisation to have a proper functioning inside the company. The modelling is also useful in that manner that it provides a basic guideline for the workforce to adopt and follow it easily and have a sample of work which they had to perform and how they had to perform. British Petroleum (BP) has implemented strategic economic supply administration in order to emphasis on the progress of its stakeholders. This strategy is fanatic to persuasive and possession stakeholders by generating and transporting extreme reoccurrence on their reserves. In order to entice potential stakeholders in the business, British Petroleum (BP) has to adopt upbeat strategies for potential stakeholders on their reserves and holding of all stakeholders in the main policy of British Petroleum (BP). The most perceptive outcome from stakeholder inspection is that Shell PLC has greater sustenance from important stakeholders the Shell PLC Board, shareholders and ecological pressure groups than British Petroleum (BP). It is largely because Shell PLC has substantial involvement in situation preparation, which has always assumed it and benefit over contestants in the past. Shareholders are more probable to be helpful of Shell PLCs strategic choice to change into the renewable market, acceptance such a move. Alternately, British Petroleum (BP) has been accomplishment poorly and lacks Shell's scenario planning ability. Since the other main oil firms have not moved towards renewable energy, British Petroleum
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(BP) is in a more difficult position, and is less able to encourage shareholders of the need to embrace renewable energies through its SBU. Both companies British Petroleum (BP) and Shell PLC have huge resources to draw on, in term of producing, distributing and marketing of the various products around the globe. The shell has a strong scenario plan is a strong form of assets, which is the great benefit over its opponents from last many years they cannot simply acquire. Issues that want consideration as it will influence on British Petroleum (BP) performance. Firstly it emphasis on ecological issues related to the BP. The environmental law averts withdrawal of extra natural capitals all over the period just to make maintainable practice of the natural possessions. Company should have to halt developments are the reason to harm the environment which might cause the unemployment and loss of jobs also. Strong criticism done by the Green Groups Companies Shareholder damage their venture due to reduction in the assessment of shares The factors such as the legal ones that like company that sources damage to the nature and become responsible for reducing the effects of those are considerable. British Petroleum (BP) is doing its processes with hard regulation for boring and mining the natural assets that contain crude oil. Tall valued tools and apparatus should be allowable to be used for boring in order to stopover events similar to the oil spill which had affected the British Petroleum (BP). A technical matter Sequences is Ocean II reporting and controller circulation utensils to formulate drawn from the tap beforehand boring. DWC ability should be used to decrease intervals and charge for observing the position for inspection. DPC technology that Sketches the 3D imageries for the site beneath maritime superficial that will afterwards choose for oil withdrawal. The British Petroleum (BP) under some various political issues has larger options for the extraction of the oil for e.g. Iraq, Iran, Nigeria and Brazil etc. however the British Petroleum (BP) has edge by these political factors other than this BP has many other factors and prospects to capitalize and produce the cash flow for the upcoming plans. The most important issue was of the OIL Spills in the Gulf of Mexico. The United States Government has enforced the penalties for the harm made to the atmosphere, alongside such life-threatening incident excluding the damage in only one quarter BP recuperating its place instead of amalgamation or partially auction of shares BP Premeditated to establishment sideways the perfect possessions to achieve the charge of cleaning he spill. Additional
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significant phase which British Petroleum (BP) has occupied was skip dividend imbursement for the period in command to convalesce the adversity state. After examining the situation discussed above British Petroleum (BP) deliberately in solid station because of universal processes 3rd uppermost marketplace shares in upstream events and overriding marketplace spot The oil spill is the main effected incident of the British Petroleum (BP). The business location of British Petroleum (BP) after that happening has diminished a lot. British Petroleum (BP) tracks the High values of tools to be castoff for mining, newest equipments and accomplish the ecological issues. 5.2- Recommendations: There is some health and the safety issues as an accident had influenced I Texas Refinery which brings the intention to this matter. This matter had led to the payment of approximate 96 million Dollars to make improvement in its health and the safety standards. British Petroleum (BP) reputation has weakened over the last several years due to the events in the past. There are also the momentous matters connected to the deficiency in the governance of the company. British Petroleum (BP) has to take the issues extremely and make the essential steps executed to improve the current situations and progress the commercial and economic values of the company. British Petroleum (BP) has to review the interior tactical strategy for the upcoming to recuperate the fatalities from the oil Spill in the Gulf. Furthermore the new-fangled hazards organization policies have to be industrialized to overwhelmed and decrease such kind of events in the upcoming. British Petroleum (BP) has robust location in downstream actions and much of its revenue impending from downstream actions. British Petroleum (BP) should advance profoundly in upstream events and contest unswervingly with Shell PLC and encounter future demands. Now companies are looking to capitalize in substitute basis of dynamisms. British Petroleum (BP) should also deliberate other choices and separate itself from its contestants. 5.3 - Suggestions: 5.3.1- Through joint ventures, BP can enter the oil sands production markets: British Petroleum (BP) should toner numerous contracts with oils and manufacture corporations that have the prospective of growing BP's experience to that type of manufacture. The consequence of such contracts make it conceivable for both companies to recall a collection of resources deprived of needful that they have to track all of the resources.
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5.3.2- Business Strategy: Enormous deterioration in revenues of British Petroleum (BP) in 2008 has loss of approximately 62% of the total revenue. The failure of British Petroleum (BP) incomes just owes to little charge oil worth. In an exertion to counterbalance decreasing proceeds, British Petroleum (BP) can decrease wealth expenditure for 2009 and taken added events to cut functioning charges. Through frequent dismissals and cuts in wealth expenses, British Petroleum (BP) has the possible of plummeting yearly costs from $32 billion in 2007 to $28 billion in 2009. BP.s price decreases reflect the companys, sustained focus on simplification and competence. 5.3.3- BP can Restructures its Alternative Energy Operations: In instruction to decrease cost and enlarged the economic presentation BP. British Petroleum (BP) streamlines its substitute liveliness procedures. British Petroleum (BP) began reformation its liveliness actions in 2009 as part of the company's strategy to decrease working costs and make control an economically modest procedure of energy. 5.3.4- Take Charge of its Cash: British Petroleum (BP) should have a cash flow budget. Evaluation and apprise it frequently. Accomplish its cash flow by judgment outgoings. Decrease the quantity of bank accounts. Use of electronic banking to decrease dues & custodies. Should choose a bank account that outfits the commercial requirements to decrease facility dues and overdraft charges. Capitalize extra funds in higher attention accounts and competition the possessions to its obligations. 5.3.5- Manage inventory: British Petroleum (BP) should uphold record stages to competition compulsory manufacture/sales dimensions. Use least re-order argument and also measure the opportunity of plummeting the dissimilar kinds of account held. Position delivery of inventory to coincide with production requirements i.e. 'just in time'. Try to get record on package where conceivable to decrease level of currency knotted up in record. Accomplish unvarying run-ofthe-mill takes to classify outdate, damaged and slow touching items. 5.3.6- Areas for the Further Research Inspire cash and credit card expenditures where conceivable and proposition credit as a last option. Have borrowers comprehensive a credit request, evaluation of their economic declarations and accomplish orientation checks. Speed up gathering efforts by transmitting declarations early and punctually subsequently up insolvents. Deal with all insolvents
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inquiries punctually as well as take phases to decrease faults in report, billing, speeches etc. Contemplate accusing attention on unpaid financial records or at slightest 'note' that attention is payable on statements. Limit recognition terms down to 7 day as well as offer small reductions to inspire quick imbursement. Decrease sales/volume reductions to unhurried spenders to reproduce extra period and charge of follow up.
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REFERENCES USED
1. Business analysis & valuation: using financial statements: Krishna G. Palepu, Paul M. Healy - 2008 - 336 pages 2. Financial analysis: tools and techniques: a guide for managers :Erich A. Helfert - 2001 - 485 pages 3. Financial analysis and decision making: tools and techniques : David E. Vance - 2002 - 411 pages 4. Financial Statement Analysis 9E - Page 2 Wild - 2006
5. A financial and business analysis of Indiana grain elevators: E. G. Byer, G. B. Wood, George S. Abshier - 1950 - 39 pages - Snippet view 6. Schaum's quick guide to business formulas: 201 decision-making : Joel G. Siegel, Jae K. Shim, Stephen Hartman - 1997 - 354 pages 7. Financial statement analysis and business valuation: Robert B. Dickie 2006 - 399 pages 8. Fuzzy logic in financial analysis: Ana Mara Gil Lafuente - 2005 - 450 pages 9. A Weberian analysis of business groups and financial markets: Sandro Segre - 2008 - 131 pages 10. Financial analysis: tools and techniques : Erich A. Helfert - 2001 - 485 pages 11. International financial reporting standards: a practical guide: Hennie van Greuning - 2009 - 334 pages 12. Financial analysis: a controller's guide: Steven M. Bragg - 2000 - 342 pages
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13. Financial analysis and decision making: David E. Vance - 2002 - 411 pages 14. Financial analysis: the next step: James O. Gill, Moira Chatton - 2000 110 pages 15. Financial analysis: principles and procedures: Jerry A. Viscione - 1977 - 271 pages 16. Financial analysis: Bill Rees - 1995 - 390 pages 17. Essentials of financial analysis: G. Thomas Friedlob, Lydia Lancaster Folger Schleifer - 2003 - 234 pages 18. Financial analysis: a programmed approach: Neil Seitz - 1984 - 320 pages 19. Optimisation, econometric and financial analysis: Kontoghiorghes, Cristian Gatu - 2007 - 277 pages Erricos John
20. Financial analysis of M&A integration: Stuart Ferguson, Stuart Ferguson (Ph. D.) - 2003 - 358 pages 21. Financial analysis: a user approach: pages Gary A. Giroux - 2003 - 297
22. Financial analysis: a managerial introduction: Richard Malcolm Sano Wilson, Gerard McHugh - 1987 - 310 pages 23. Financial analysis, planning & forecasting: theory and application: Alice C. Lee, John C. Lee, Cheng F. Lee - 2009 - 1101 pages 24. Techniques of Financial Analysis: A Guide to Value Creation: Erich A. Helfert - 2002 - 570 pages 25. The portable financial analyst: what practitioners need to know: Mark P. Kritzman - 2003 - 260 pages 26. Business Analysis: Debra Paul, Malcolm Eva, Keith Hindle - 2010 - 256 pages
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27. Seven Steps to Mastering Business Analysis: Barbara A. Carkenord 2008 - 353 pages 28. Strategic management and business analysis: David Williamson, Peter Cooke, Wyn Jenkins - 2003 - 263 pages 29. A Guide to the Business Analysis Body of Knowledge (Babok Guide): Iba, Kevin Brennan - 2009 - 272 pages 30. Professionalizing Business Analysis: Kathleen B. Hass - 2007 - 119 pages 31. Business analysis: Association of Chartered Certified Accountants (Great Britain) - 2008 - 638 pages 32. Mastering business analysis with Crystal Reports 9: Chris Tull - 2003 450 pages 33. Business analysis using regression: a casebook: Dean P. Foster, Robert A. Stine, Richard P. Waterman - 1998 - 348 pages 34. Business analysis and valuation: Krishna G. Palepu - 2007 - 572 pages 35. Business analysis & valuation: using financial statements: Krishna G. Palepu, Paul M. Healy - 2008 - 336 pages 36. Business Analysis of Web.de AG: Andreas Birkholz - 2007 - 88 pages 37. A business analysis: intellectual disability services state plan: Victoria. Community Services Victoria - 1990 - 30 pages 38. Financial Report : British petroleum Annual 2010 39. Financial Report : Shell PLC Annual 2010
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APPENDIX- 2 Questionnaires
QUESTIONNAIRE
This work of dissertation is on Financial and business analysis is done under the University of Wales with the intention of having a research on the given topic Financial
analysis
and business analysis of British Petroleum in comparison with Shell PLC. Both are very large petroleum companies in terms of their supply of petroleum.
The information gathered from this questionnaire will be kept only for the purpose of the research on the provided topic from the researchers University and will not be disclosed to any unconcerned person at any stage.
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Part I: Basic Information

Name: Designation: Department: Company: Qualification: Time Period of the Present Job:
_____________________ _____________________ _____________________ _____________________ _____________________ _____________________
Part II: Working Environment:

1.
Does the working environment inside your company is developed under the strategies and policies of the company? Yes No Might Be I dont Know
1.
Do the company having strategic plans for the improvement in the working environment for the workforce? Yes No Might Be I dont Know
1.
Is your company stronger enough to deal with the drawbacks created by the lack of interest in the working environment? Yes No Might Be I dont Know
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Part III: Financial Analysis of the company:

Company has a strong policies and strategies to make the financial analysis at various stages of the business. Agree Disagree Strongly Agree Strongly Disagree I dont Know
The financial statements of the company are developed for the analysis of the financial strengths and weaknesses and are unbiased views of the present situation of the company. Agree Disagree Strongly Agree Strongly Disagree I dont Know
The company has a well-documented and established financial policies and strategies for the business dealings Agree Disagree Strongly Agree Strongly Disagree I dont Know
The financial strength of the company has increased during the last five years. Agree Disagree Strongly Agree Strongly Disagree I dont Know
1.
The present polices and strategies of the financial matters inside the organisation are satisfactory and needs no changing Agree Disagree Strongly Agree Strongly Disagree I dont Know
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The present polices and strategies of the financial matters inside the organisation are not satisfactory and need revisions at various stages. Agree Disagree Strongly Agree Strongly Disagree I dont Know
The present stability of the company in the market is improving past few years Agree Disagree Strongly Agree Strongly Disagree I dont Know
The liquidity and the profitability of the company is increasing in past few years Agree Disagree Strongly Agree Strongly Disagree I dont Know
The paying and buying capacity of the company is increased in past few years Agree Disagree Strongly Agree Strongly Disagree I dont Know
The assets of the company are more than the liabilities of the company Agree Disagree Strongly Agree Strongly Disagree I dont Know
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Part III: Business Analysis of the company:

Please fill the following chart in according to the ranking as you think about the companys Performance in the following Elements Poor Nice Good V. Good Excellent Buying/ Paying Capacity Profitability Liquidity Reputation Stability in Market Market Strategies Market Structure Financial Policies Risk management Planning for the future Projects Feasibility Reporting Financial Reporting Business Analysis
84

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Business and Financial Analysis of BP with comparison to Shell PLC

Submitted in accordance with the requirements for The degree of

Business and Financial Analysis of BP with comparison to Shell PLC

In the name of Allah (God) the most Beneficent the Merciful

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

List of Abbreviations Used

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

2.4.5 2.4.6 2.3

Accounts Receivable Turnover (Credit Risk) Steps for Financial Analysis

Business and Financial Analysis of BP with comparison to Shell PLC

Population Study The Introduction of the Chapter That Follows

Chapter 4 Data and Analysis 4.1

Introduction Data Analysis

4.2.1 4.2.2 4.2.3

Surveys Company Yearly Reports

4.3.1 4.3.2 4.3.3 4.3.4

Assets Liabilities Liquidity Equity Share Capital

Deep-water Oil spill Effect (BP Oil Spill)

Presentation of Data (From Questionnaires)

Business and Financial Analysis of BP with comparison to Shell PLC

References Appendix Appendix 2:

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Political & Legal

2 Layer 3rd Layer Physical Environment

Social & Cultural

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Political & Legal

Competitive Environment 1st Layer Social & Cultural

2nd Layer Physical Environment Ecological

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Accounts Receivable Turnover

Steps for Financial Analysis:

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Organizing the Analysis

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC

Business and Financial Analysis of BP with comparison to Shell PLC