Nobody downloaded yet

Investment on BHP - Essay Example

Comments (0) Cite this document
BHP is a large corporate entity which is having its hold on a diversified fields such as mineral, oil, gas and steel. Renowned for its continuous developing structure and operations, is known as one of the Australia's oldest and biggest companies and was listed NYSE and LSE…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER92.7% of users find it useful
Investment on BHP
Read TextPreview

Extract of sample "Investment on BHP"

Download file to see previous pages This tells us about the company's efficiency in using current assets as the ones that generate income. The stable cash flow from the years also tells us that the current liabilities are in control, which is within the limits of the company's assets and cash flows. The operational income of the company in the year 2005 is US$8.5billion. This gives reliable earnings per share. Due to the largest market capitalisation of the company one can recommend that not only investing he can hold the shares or debentures of the company for long time as the market capitalisation was being increased constantly from the past years. It is listed on LSE, Australian stock exchange, Johannesburg stock exchange and American Depository receipts listings and New York stock exchange. The Customer sector groups, to which the company gives more importance than its operations concentrate on Aluminium, Base Metals, Carbon Steel Materials, Energy Coal, Stainless Steel Materials, Petroleum, Diamonds and Specialty Products,
At first let us examine the return/risk characteristics of the investment in the company, which is a indicator of past performance. The returns for the company are at a high stake as the company generated turnover of US$31.8 billion, earnings before interest and tax (EBIT) of US$9.3 billion, and net income was at US$6.5. The available cash flow after Accounts Payable was US$8.7. This implies that the net income of the company was almost 20% of the turnover which is a sound fundamental for any corporate entity. As the net income decides the future expansion, earning per share, available cash for the coming financial year, capacity to invest in new projects and R&D it is considered as a fundamental which assures return on the investment. The cash flow was just above the net income. This implies that the cash flow was in proportion to the assets of the company which tells us that the share price increase in the market can be justified. The fluctuation of the prices of the company's shares were around 30% of the maximum price. The maximum price was 19$ and minimum price was around 12$ in 2005. This fluctuation and the maximum price, the share enjoys in the market can be justified due to the substantial percentage of net income and recorded growth of 29.5 percent in operational income of the company in 2005.
The increase of operational income and net income of over 20% of the turnover implies good return for the investment and security for the money invested. The operational income, net profit, and earnings per share were growing continuously in the past years.
The turnover in 2004 and 2005 is US$ 29649 million and 22887 million. The turnover was increased by almost 33 percent but the costs increased only from 17084 to 20697 which indicates good management of operational activities which control cost factor and thereby plays a key role in increasing the net income. The earnings per share had increased by more than 80 percent in 2005 when compared to 2004 earnings. The total current assets stand at staggering US$7822 million which is more than the net income of the company. It is considered as a sound fundamental as the current liabilities of the company were lesser amounting to US$7659 million. The total non current assets stand at US$34288million and total non current liabilities atUS$16087million. This tells us that the domination ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Investment on BHP Essay Example | Topics and Well Written Essays - 3000 words”, n.d.)
Investment on BHP Essay Example | Topics and Well Written Essays - 3000 words. Retrieved from
(Investment on BHP Essay Example | Topics and Well Written Essays - 3000 Words)
Investment on BHP Essay Example | Topics and Well Written Essays - 3000 Words.
“Investment on BHP Essay Example | Topics and Well Written Essays - 3000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document


Investment Analysis of BHP Billiton Company

...of BHP Billiton which is equal to -5.66%. This indicates that the stock performed much better than expected and also outperformed the index by a high margin. It also performed better than all the other four companies scrutinized as shown in the table above indicating that it is the ideal stock to invest in. Recommendation Therefore this stock should be bought and included in the portfolio. Other factors affecting the company (BHP Billiton) The company has international operations indicating that foreign currency exchange rate movements affect its returns, however since it has operations in various parts of the world like the United Kingdom, United States, Australia and several other...
9 Pages(2250 words)Case Study

Bhp billiton

...annum (mtpa) to 24 mtpa BHP Billiton has been investing in the expansion of its coal and copper operations. In March 2011, the company approved a $400 million investment to expand the Hunter Valley energy coal operations in New South Wales, Australia. On the copper front, the company approved $554 million investment for the Escondida Ore Access (EOA) project in March 2011. These investments strengthen the company’s asset base as well as contribute in increased operations. This will in turn result in higher profits in mid to long term. Slide 15 SWOT Analysis Threats Reduction in demand from China Slowdown in Chinese economy can affect the prices of...
7 Pages(1750 words)PowerPoint Presentation

BHP Billiton Limited

..., the shareholders in BHP form an integrated part of the organisation. The major investments are done by the shareholders, thus the company undertakes the formal as well as the informal communicating channels to keep the shareholders informed regarding its various financial dealings and also to gather information from the shareholder in the form of their feedbacks concerning the decisions taken by the company directors (BHP Billiton 2012). The decisions related to the incentive arrangement, receipt of financial statement and the selection of the board of directors further imposes a vital impact over the company thereby mitigating the corporate risk of gap amid shareholders’ interests and the company information disclosures... ?Accounting...
4 Pages(1000 words)Essay


...?Investment Project SCHOOL Introduction The purpose of this project was to simulate stock market investment trading and facilitate decisions with a comfortable budget and enough time during a term to be flexible. The Wall Street Journal MarketWatch site offered just such a simulation portfolio and online gaming. Stock Selection and Portfolio Table 1: Initial Acquisitions for the MarketWatch Game Portfolio, Day 1 I assembled a portfolio that included industry leaders and star performers Apple (AAPL) and Ebay (EBAY), expected to perform very well, at least seasonally. Secondly, I included the highly successful oil and gas exploration and production company, Denver-based Cimarex, for owning no less than 68%...
4 Pages(1000 words)Essay

BHP Billitons Vacation Program

...Motivational Essay - BHP Billiton's Vacation Program Q: "What attracts you to BHP Billiton and its' Vacation Program BHP Billiton is the world's largest resources company diversified into areas like Petroleum, Aluminium, Base Metals, Carbon Steel Materials, Diamonds and Specialty Products, Energy Coal and Stainless Steel Materials. With a strength of about 38,000 employees, working in more than 100 operations in approximately 25 countries, the company is always on the lookout for scaling newer heights with a purpose to create long-term value through the discovery, development and conversion of natural resources, and the provision of innovative customer and market-focused solutions....
2 Pages(500 words)Case Study


... Supervisor There are many types of investment products available both to individuals (employees and the self-employed) and to the incorporated businesses.' The various types of investment products which may be both for short-term or long term have different tax implications to people and organisations. Some may eliminate, reduce or minimize while others may have no effect on tax liabilities. This is important both to people and organisations for investment decisions and for tax planning purposes. Required Examine the main types of investment products available to individuals and companies.' - Advantage and disadvantage of different form of investment.' - The tax implications of different types of investment products... ...
13 Pages(3250 words)Essay

BHP Billiton

.... Exploration activities for minerals can not only take up long gestation periods, but can also result in unsuccessful attempts. Even after successful exploration, the investor needs to face the technical risk (involved in extraction at sometimes difficult sites), and market risk (demand and supply risks), political risks (nationalization). Political risks can be higher if the host country has a weal constitutional framework. This is a risky business and the investor should have the expertise necessary to handle such risks. Once investment is committed, the cost of pullout is very high (United Nations Conference on Trade and Development, 2007). Section-III About BHP Billiton The largest extractive...
14 Pages(3500 words)Case Study

Press Release on Bhp Billiton Issue

...Media Release Number 08 18 August Embargo For Immediate Release Bhp Billiton Set to Take-Over Woodside Petroleum Bhp Billiton Chairman Jacques Nasser has recently announced that Bhp Billiton is set to close the deal on the take over of Woodside Petroleum at a grand celebration this coming Friday at 4 p.m at the Sofitel Australia Grand Ballroom. Company executives and stock holders from both companies are expected to be in attendance. Appearing together before the press at the national headquarters of Bhp Billiton in Melbrourne, Victoria, Nasser disclosed that ”the take-over is happening at the most opportune time for his company asour board of directors and...
2 Pages(500 words)Essay


...PROFFESSOR: Finance and Accounting: Investment It is not true that real e is a safe way of investment as compared to bonds. This is because bonds offer investors with assurance and stability that real estate cannot. Though considering bonds versus real estate each has its own points which highly depend on factors like age, level of income of an individual, stability of the income, and risk lenience. The following are the reasons that many think about bonds to be safer than real estate. Bonds are less volatile as compared to real estate; prices for bonds will change less than real estate prices. Depending on the way you invest in the bonds, an individual is assured of good returns. Thus...
1 Pages(250 words)Essay

Strategic Management: BHP Billiton

...Executive Summary In the process of aging, the firm heavily structures and restructures its corporate governance to advance the profitability metrics. The strategic management concepts improve productivity amidst a challenging business environment. The strategic management approach ensures that the business minimizes losses by bettering operations. Such an approach guarantees increased shareholders confidence with time. A strategic management step is merging or diversification. The incoming research will explore the effect of strategic management principles on key operations of a firm. The research will invite BHP Billiton as a case study. The report will explore, core strategic management concepts, external environment...
10 Pages(2500 words)Essay
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Investment on BHP for FREE!

Contact Us