Analysis a BP shares company and make data analysis

Anonymous
timer Asked: Mar 7th, 2019
account_balance_wallet $70

Question Description

One is guide file.

The second file is Article format.

Need to write 1800 words

Tutor Answer

Richardweir
School: UIUC

Attached.

2016

2016

2017

Change
Rate

Liquidity Ratio
18%
Current Ratio

1.162097 1.372362
20%

Quick Ratio

0.834082 0.998462
-18%

Inventory Days

35.21199 28.88753
-8%

Receivable Days

41.23522 37.75846
-13%

Payable Days

74.48278 64.78224
-5%

Cash
Cycle

Conversion
1.964425 1.863747

Solvency Ratio
4%
Gearing

0.533503 0.552677
-353%

Interest Cover

-1.37015

3.461909

Profitability Ratio
1436%
Operating
Margin
ROA
ROE

Profit

Performance Ratio

0.00094 0.014437
0.000653 0.012542
0.001776 0.03454

1820%
1845%

2720%
Basic EPS

0.61

17.2
2750%

Diluted EPS

0.6

17.1
-96%

P/E Ratio
ROCE

Share Price @ Y/E

0.409836 0.015116
0.000839 0.016375

32.62

1851%
-6%

30.65

Bp is a multinational company operating in the global energy sector. The company’s operations are
evident in various regions of the world, including Europe, North America, South America, Australasia,
Asia, and Africa. As a result of its wide operations, the company exhibited verifiable financial
performance between 2016 and 2017. Through a ratio analysis, the company’s financial health over the
two years can be evaluated. As such, the company’s liquidity improved significantly over the two years
as evidenced by the 18% growth of its current ratio. The company’s current ratio increased from 1.16 in
2016 to 1.37 in 2017. The improved current ratio was an indicator of improvement in the company’s
ability to settle its current liabilities using current assets, thus an improvement of its liquidity position.
On the other hand, improved liquidity is also evidenced by the 20% increase in the company’s quick
ratio; which indicates its ability to utilize its quick assets in the settlement of its current liabilities. The
company’s quick ratio increased from 0.834 in 2016 to 0.998 in 2017.
BP’s improved liquidity position is also evidenced by the decline in inventory days and receivable days
respectively. The former declined by 18% while the latter declined by 8%. The declining inventory days
implies that the company increased its ability to sell off its inventories from 2016 to 2017. Also, the
decline in receivable days implies that the company’s ability to collect cash from all credit sales. The
company’s payable days declined by 13%, implying that the company’s ability to settle its trade payables
increased over the two years. The company’s cash conversion cycle decreased by 5% over the two years
under review. A declining cash conversion cycle implies that the business’ ability to synthesize its cash
through operations is improved. As such, BP pacified its cash operations in 2017 compared to 2017.
Profitability ratios are useful for the evaluation of a company’s ability to generate returns on the
different investments made. It is imperative to highlight that BP’s profitability improved tremendously
between 2016 and 2017. The improved profitability was evidenced by the significant increase of the
company’s operating profit margin by more than 1000%. The operating profit margin increased from
0.00094 in 2016 to 0.014 in 2017. The increase is an indicator of improved profitability in the company.
Another indicator of improved profitability for BP was the increase in its return on equity. The metric
demonstrates a company’s ability to generate returns to the invested equity by the shareholders. It
indicates the proportion of dollars in the company’s net profits attributable to shareholders’ equity. In
the case of BP, the ROE increased from 0.0018 in 2016 to 0.034 in 2017, implying that the company’s
ability to reward its shareholders improved. The improved profitability of BP between 2016 and 2017
was also asserted by the increase in its return on assets. A company utilizes its asset base to sustain its

operations and generate profits. As such, the capital expenditure committed to the acquisition of the
assets is compared with the profits generated to ascertain how profitable is the business and whether
its progress is sufficient to recover the investment in assets. The company’s ROA increased gradually
from 0.0007 in 2016 to 0.013 in 2017. The growth implied that the proportion of net profits attributable
to unit assets increased. Overall, the profitability of BP improved in all aspects over the two years under
review.
The company’s performance efficiency also improved gradually between 2016 and 2017 as evidenced by
the different performance ratios. The company’s basic earnings per share increased from $0.61 in 2016
to $17.2 in 2017. The growth implied that the company’s ability to reward its shareholders increased
significantly. The same was evidenced by the increase in diluted EPS from 0.6 in 2016 to 17.1 in 2017.
However, the company’s PE slightly declined from 0.4 to 0.02 over the two years implying that there
emerged a mismatch between the share prices and their earnings. The loophole was, however, sealed
by the significant increase in the company’s ROCE. The growth implied that the company’s ability to
reward its capital employed from sales revenue was high. Overall, it can be concluded that the
company’s financial performance and position improved significantly over the two years. The company’s
profitability, liquidity, efficiency, and performance recorded positive changes, overall.
Part B


2016
Liquidit
y Ratio
Current
Ratio
Quick
Ratio
Inventor
y Days
Receiva
ble
Days
Payable
Days
Cash
Convers
ion
Cycle
Solven
cy
Ratio

2016

2017

Change Rate

18%
1.1620969 1.3723617
20%
0.8340816 0.9984623
-18%
35.211985 28.887527
-8%
41.235219 37.758463
-13%
74.48278 64.782243
-5%

1.9644245 1.8637471

4%
Gearing 0.5335027 0.5526772
Interest
Cover
-1.370149 3.4619094
Profitab
ility
Ratio

-353%

1436%
Operati
ng Profit
Margin 0.0009398 0.0144375
ROA
0.0006532 0.0125418
ROE
0.0017761 0.0345405
Perfor
mance
Ratio
Basic
EPS
0.61
17.2
Diluted
EPS
0.6
17.1

1820%
1845%

2720%
2750%

P/E
Ratio
0.4098361 0.0151163
ROCE 0.0008392 0.0163748
Share
Price @
Y/E
32.62
30.65

-96%
1851%
-6%

Attached.

Running head: INDIVIDUAL ASSIGNMENT

Individual Assignment
Name
Institution

1

INDIVIDUAL ASSIGNMENT

2

Individual Assignment

2016

2016

2017

Change Rate

Current Ratio

1.162097

1.372362

18%

Quick Ratio

0.834082

0.998462

20%

Inventory Days

35.21199

28.88753

-18%

Liquidity Ratio

-8%
Receivable Days

41.23522

37.75846

Payable Days

74.48278

64.78224

-13%
-5%

Cash Conversion Cycle

1.964425

1.863747

Gearing

0.533503

0.552677

4%

Interest Cover

-1.37015

3.461909

-353%

Solvency Ratio

INDIVIDUAL ASSIGNMENT

3

Profitability Ratio
1436%
Operating Profit Margin

0.00094

0.014437

ROA

0.000653

0.012542

1820%

ROE

0.001776

0.03454

1845%

Basic EPS

0.61

17.2

2720%

Diluted EPS

0.6

17.1

2750%

P/E Ratio

0.409836

0.015116

-96%

ROCE

0.000839

0.016375

1851%

Performance Ratio

-6%
Share Price @ Y/E

32.62

30.65

Bp is a multinational company operating in the global energy sector. The...

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Anonymous
Tutor went the extra mile to help me with this essay. Citations were a bit shaky but I appreciated how well he handled APA styles and how ok he was to change them even though I didnt specify. Got a B+ which is believable and acceptable.

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