BHP

BHP Billiton Group

BHP Billiton

About the company

BHP Billiton Group (BHP Billiton) is a diversified natural resources group engaged in mineral exploration and production. The group's primary focus areas include oil and gas, aluminum, copper, nickel, iron ore, manganese, metallurgical coal, and energy coal, with additional exposures to uranium, gold, zinc, lead, silver, and diamonds. BHP Billiton comprises BHP Billiton Limited and BHP Billiton Plc. The group has a global presence with more than 100 operations in 25 countries. It is headquartered in Melbourne, Australia and employs about 40,800 people. The group recorded revenues of $71,739 million in the financial year ended June 2011 (FY2011), an increase of 35.9% over FY2010. The operating profit of the group was $31,816 million in FY2011, an increase of 58.8% over FY2010. The net profit was $23,648 million in FY2011, an increase of 85.9% over FY2010

SWOT Analysis

Strengths

Strong market position

Diversified revenue stream

Centralized marketing activities

Weakness

Partnership constraints

Opportunities

Acquisition of Chesapeake Energy's shale assets

Expansion of coal and copper ore operations

Threats

Reduction in demand from China

Environmental issues

Intense competition

Financial Highlights

Income Statement

x '000

Total Revenue

71,739,000

EBITDA

36,540,000

Operating Income

32,422,000

Net Income

23,648,000

Revenue per Share

13.02

EPS - Net Income - Diluted

4.27

Share Outstanding

5,322,571

Weighted Average Shares Outstanding - Diluted

5,511,000

Weighted Average Shares Outstanding - Basic

5,540,000

Earnings per Share - Basic

4.29

Balance Sheet

x '000

Total Assets

102,891,000

Current Assets

25,280,000

Total Liabilities

46,129,000

Long Term Debt

12,388,000

Stockholders' Equity

56,762,000

Total Assets per Share

19.33

Current Liabilities

19,733,000

Net Assets per Share

10.66

Cash Flow Statement

x '000

Cash from Operations

30,080,000

Cash from Investing

-16,464,000

Cash from Financing

-16,018,000

Cash Flow per Share

5.43

Cash & Cash Equivalents, Beginning of Year

12,455,000

Cash & Cash Equivalents, End of Year

10,080,000

Stock Price and Valuation

13th April, 2012

Market Cap(mil)

40,843

Share Outstanding(000's)

579,750

PE Ratio

16.5027

Dividend Per Share(TTM)

2.2

Earnings Per Share(TTM)

4.291

Financial Ratio Analysis

Liquidity Analysis

When it comes to evaluation of any business, it is necessary to review the performance of the company from view of suppliers and other sources of short term finances which required liquidity analysis of the business. Even the company is making substantial profits; it still gets insolvent if it does not have appropriate liquidity management. So it is necessary for suppliers to analyze the capability of the company to meet all its debt. During the last year, the company has witnessed the fall in its liquidity position by more than 30%. During 2010, the current ratio was 1.93 (very favorable figure) which fell to 1.28 in 2011, a decline of approx. 37%. Quick ratio also fell from 1.48 to 0.94 during the same period marking more or less the same decline. If we take a glance over the liquidity position of the company for last five years, overall it can be clearly observe that the company has been succeed in improving its liquidity which continued upward trend till 2010, subsequent to which deterioration in the position can be observed. Overall, the company was able to improve the condition by 27% in current ratio and 18% in quick ratio during the period 2007-11.

Efficiency Analysis

When it comes to measurement of management's performance, efficacy analysis plays a crucial role because it is the management which decides upon policies on how to settle down various accounts. The goal is to gauge how well the firm is running its ...