Analysis of ExxonMobil and British Petroleum
Describe about the Financial Statement Analysis of ExxonMobil and British Petroleum?
Answer:
Introduction
British petroleum is an oil and gas providing company which is mainly supplies of fuel their clients and customers for transportation activities, light producing energy supplies and lubricant products which is required for the vehicle’s engine and different products which is used by the consumer’s petrochemical products which is mainly used in the preparation of paints and clothes facilities for other products. Exxon Mobil Corporation is exploring their business activities in the country U.S for the production and distribution activities of the oil and natural gases. The company is mainly deal in the products like petrochemical, aromatics and the other products which is directly related to the petrochemical products and industry. The project is all about the understanding the financial status of the company in the market during the financial period of 2013 and 2014 (Horngren and Rajan, 2012).
The critical analysis of the companies Exxon Mobil and British Petroleum which are mainly described the financial situation of the company in the market and the non financial analysis which is mainly described the investment decision and the other strategies of the companies with the support several organizational sources within given period of time. The situation of the different analysis which is related to the several activities of the company is mainly depends upon the companies are having certain rules and policies according to which is the income statements of the organization which is support in measuring the performance of the company within a given period of time (Horngren and Oliver, 2012). The study is all about the investments activities in the energy proving comp
any. The companies are providing products and services in the petrochemical and energy sector which will provide better financial position of the organization in the different scenarios of the company during performing in the market.
Critical Analysis
The critical analysis of the company will be analyzed by the company within a given period of time by the reviewing the financial statement analysis of the companies Exxon Mobil and British petroleum. The ratio analysis will be better analyzing the financial and performance status of this organization (Gibson, 2012).
Profitability Ratio
Profitability ratios of any organization which is support to analysis of the measuring the capabilities of the organizations in the revenue generation activities of the companies within a particular given period of time. Here the overall profitability analysis of the companies Exxon Mobil and British Petroleum within financial period of 2013 and 2014 (Garrison and Brewer, 2012).
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Total Revenue |
$ 438,255.00 |
$ 411,939.00 |
$ 379,136.00 |
$ 353,568.00 |
|
Gross Profit |
$ 57,711.00 |
$ 51,630.00 |
$ 30,221.00 |
$ 4,950.00 |
|
Gross Profit Margin |
0.131683609 |
0.125334091 |
0.079710183 |
0.014000136 |
|
According to the overall analysis of the company’s financial statements which is helping in measuring the earning capabilities of the company within given period of time. The mentioned companies are having 0.131 and 0.125 in the financial year 2013 and 2014 for Exxon Mobil and for British Petroleum the gross profit earning margin is 0.079 and 0.014 respectively. The overall situations showing that these companies are reducing their gross earning capability of the company. | ||||
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Total Revenue |
$ 438,255.00 |
$ 411,939.00 |
$ 379,136.00 |
$ 353,568.00 |
|
Net Profit |
$ 32,580.00 |
$ 32,520.00 |
$ 23,758.00 |
$ 4,003.00 |
|
Net Profit Margin |
0.074340281 |
0.078943727 |
0.06266353 |
0.011321726 |
|
According to the overall analysis of the company’s financial statements which is helping in measuring the earning capabilities of the company within given period of time. The mentioned companies are having 0.074 and 0.078 in the financial year 2013 and 2014 for Exxon Mobil and for British Petroleum the net profit earning margin is 0.0626 and 0.011 respectively. The overall situations showing that these companies are reducing their net earning capability of the company. The indirect expenses of the companies are huge which is reducing the net margin of the company within a given financial period of time. | ||||
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Net Profit |
$ 32,580.00 |
$ 32,520.00 |
$ 23,758.00 |
$ 4,003.00 |
|
Total Asset |
346,808 |
349,493 |
305,690 |
284,305 |
|
Return On Assets |
0.093580219 |
0.099269975 |
0.080536276 |
0.028159899 |
|
According to the overall analysis of the company’s financial statements which is helping in measuring the earning of the company by the assets which is acquired by the company within given period of time. The mentioned companies are having 0.093 and 0.099 in the financial year 2013 and 2014 for Exxon Mobil and for British Petroleum the returns earned from the assets acquiring activities are 0.080 and 0.028 respectively. The overall situations showing that these companies are showing that company Exxon Mobil is performing better than British petroleum in the financial year 2013 and 2014. | ||||
Liquidity Ratio
Liquidity ratios of the company are mainly support in calculating the financial liquidity analysis of the company within a provided period of time. Liquidity ratios define the short term financial status of the company for settle down their financial obligations within a certain period of time. The liquidity ratio of the companies Exxon Mobil and British Petroleum will be identified by the calculation of current and liquidity ratios of these companies (Follett, 2012).
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
current assets |
59,308 |
52,910 |
96,840 |
87,262 |
|
current liabilities |
71,724 |
64,633 |
72,812 |
63,615 |
|
current ratio |
0.826891975 |
0.818622066 |
1.330000549 |
1.371720506 |
|
The current ratio of the companies Exxon Mobil and British petroleum are in the financial year 2013 and 2014 is mainly analyzed as 0.826 and 0.818 which is related to the certain activities of the company and the current ratio of the company 1.330 and 1.371 within a given financial period of time which is showing that British Petroleum is more efficient in paying their short-term obligations of the company within a given period of time rather than compare to Exxon Mobil corporation. | ||||
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
current assets |
59,308 |
52,910 |
96,840 |
87,262 |
|
current liabilities |
71,724 |
64,633 |
72,812 |
63,615 |
|
Inventory |
$ 12,117.00 |
$ 12,384.00 |
$ 29,231.00 |
$ 18,373.00 |
|
quick ratio |
0.657952708 |
0.627017158 |
0.928541999 |
1.082904975 |
|
The quick ratio of the companies Exxon Mobil and British petroleum are in the financial year 2013 and 2014 is mainly analyzed as 0.657 and 0.627 which is related to the certain activities of the company and the current ratio of the company 0.928 and 1.082 within a given financial period of time which is showing that British Petroleum is more efficient in paying their short-term obligations of the company within a given period of time rather than compare to Exxon Mobil corporation. | ||||
Solvency Ratio
The solvency ratios are mainly help in the making payment for the organization within long term period of time to their creditors and financial institutions. The debt and equity ratios of the companies will easily define the financial status of the company in terms of the paying their long terms obligations (Edwards and Boyns, 2012).
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Total Debt |
$ 6,891.00 |
$ 11,653.00 |
$ 40,811.00 |
$ 45,977.00 |
|
Total Equity |
$ 10,077.00 |
$ 10,792.00 |
$ 130,407.00 |
$ 112,642.00 |
|
Debt-Equity Ratio |
0.683834475 |
1.079781319 |
0.312950992 |
0.408169244 |
|
According to the calculation of the debt equity ratios of the these mentioned companies are mainly related to the different companies which is defining the debt equity ratios of the organization in ideal proportion in the financial year 2013 an 2014 is 0.683 and 1.079 for the company Exxon Mobil and for the British Petroleum the company is mainly having debt equity percentage of 0.312 and 0.408 for British petroleum in the financial year 2013 and 2014. The overall scenarios shows that the Exxon Mobil corporation is having huge debt in compare to the equity provided by the company (Drury, 2012). | ||||
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Total Liabilities |
$ 166,313.00 |
$ 168,429.00 |
$ 175,283.00 |
$ 171,663.00 |
|
Total Asset |
346,808 |
349,493 |
305,690 |
284,305 |
|
Debt Ratio |
0.479553528 |
0.481923815 |
0.573401158 |
0.603798737 |
|
Debt ratio of the companies is mainly showing the financial capabilities of the company through their investors and the different financial institutions in the given financial period of time. The debt ratio of both the organization is 0.479 and 0.481 in the financial year 2013 and 0.573 and 0.603 within financial year 2014. The debt acquiring status of the company British Petroleum is higher in compare to the Exxon Mobil. | ||||
|
Particulars |
ExxonMobil |
British Petroleum | ||
|
2013 |
2014 |
2013 |
2014 | |
|
Total Equity |
$ 10,077.00 |
$ 10,792.00 |
$ 130,407.00 |
$ 112,642.00 |
|
Total Asset |
346,808 |
349,493 |
305,690 |
284,305 |
|
Equity Ratio |
0.029056423 |
0.030879016 |
0.426598842 |
0.396201263 |
|
Equity ratio of the company mainly described the financial status of the company that how much amount of the money is invested by the company in their business activities within given period of financial year 2013 and 2014 are 0.0290 and 0.030 in 2013 and 0.426 and 0.396 in the financial year 2014 which is showing that company British Petroleum is maintaining the more equity proportion than debt amount in the given period of time (Bhimani, 2012). | ||||
Non Financial Analysis
Balance scorecard
According to the non financial scenario analysis of the petrochemical company Exxon Mobil is mainly considering as a global based petrochemical company which is mainly giving impact on the global market price changes of the oil and gases which is depends upon the different factors of the getting impact demand and the supply of the company’s products which is manufactured by the representative company.
- Financial perspective
- Customers perspective
- Internal process perspective
- Learning and growth perspective
During the economic activities like recession and the inflation periods of time the growth of the companies will be negatively sloping and the overall direct impact of the company operational activities (Moeschler, 2012).
The demand and supply of the products of the different companies are positively sloping as per the expectations of market investors. The prices of the goods which is supplied by the company is mainly based on the several factors which are several factors like changes in population growth, exchange rate of the currency and fluctuations (Petersen and Plenborg, 2012). There are various factors which is mainly depends upon the risk factors of the different kind of assets which is acquired by the company and capabilities of the Exxon Mobil for giving financial satisfaction to their stakeholders. The several factors which is depends upon legal obligations of the company Exxon Mobil and the barriers which providing several activities of the company within a given period of time period for the company.
Exxon Mobil are also facing huge problem in the legalization of the government for the petrochemical industry in U.S. The company British petroleum is mainly related to the several activities which is depends upon the certain activity which directly and indirectly indicated by the organization for the controlling the different hazards in the material supplied by the company within a given period of time. As per the overall performance of the company the business activities of the British Petroleum is losing the figures of the different containment figures of the company (Ratnatunga and Balachandran, 2012).
The key performance indicators of the company which is depends upon the strategies and the other scenarios of the organization which is totally depends upon the Non financial activities of both the companies. The companies are mainly supporting the overall activities of the company which is mainly based on the financial performance of the companies. The business strategies of the both the companies Exxon Mobil and British petroleum are growing as per their non financial activities of the company which is highly growing in the market all around the world.
Conclusion
The overall project is describing the financial and strategic performance of the company within given period 2013 and 2014. The companies Exxon Mobil Corporation and British Petroleum are performing well in the market with the products of petrochemical products which is showing as per the critical analysis that company is declining in maintaining the financial status of the organization in 2014 which is lower than the financial year 2013. The overall performances of both the companies are mainly better as per the analysis of the overall analysis of the company profile and financial scenarios.
Reference
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Drury, C. (2012). Management and cost accounting. Andover: Cengage Learning.
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