Free

Finance - Essay Example

Comments (0) Cite this document
Summary
It is also the fifth largest company across the globe and third largest oil corporation. Established hundred years ago (1909), BP, Plc have its head quarters at St James’s, City of…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER95.1% of users find it useful
Finance
Read TextPreview

Extract of sample "Finance"

British Petroleum Table of Contents Introduction 3 Restructure 3 Results 4 Conclusion 5 References 6 Bibliography 7 Introduction British Petroleum, Plc popularly known as BP is the largest corporation of the United Kingdom. It is also the fifth largest company across the globe and third largest oil corporation. Established hundred years ago (1909), BP, Plc have its head quarters at St James’s, City of Westminster of London. Listed with the London Stock Exchange (LSE), the corporation is a major constituent of FTSE 100.
Restructure
The restructuring of the company can be in many of the verticals. It can take the form of financial restructuring or the business portfolio restructuring. Also, restructuring of a company can be in the strategic decision making process or in that of the human resource related issues.
In the year 2007, British Petroleum, Plc took many of the restructuring initiatives. It had restructured its operations in the North Sea Organisation. The restructuring was aimed to simplify the organisation and to improve the efficiency of the various related processes. The company was compelled to initiate such changes as the production in that area was depicting decreasing trend while cost was rising rapidly (BP, 2007).
As the chief executive of BP put it, the over all restructuring measure was not all about ‘cost reduction and cull’, rather it was about the a change in culture among the employees of BP, as he observed that the oil major has been suffering from ‘over- complexity’ (Macalister, 2007).
Though the management claimed it to be mere change in culture but it invariably meant reduction in the employee force as the company was witnessing alarming financial results. To do away with the complexities that according to the top management were responsible for such deplorable financial results, the company decided to make processes simpler.
The corporation used to have three major divisions namely ‘exploration and production’, ‘refining and marketing’ and ‘gas, power and renewable’. To make operational process straightforward and reduce costs, the management restructured the process by doing away with the third segment and incorporating it into the other two. The company introduced a separate division to handle business of low carbon and options of future growth and named it ‘alternative energy’ (Kukec, 2007).
Results
The objective of any restructuring plan that any corporate initiates, is to increase its profitability and the financial performance and to create enhanced value for the share holders. The financial results of the British Petroleum for the financial year 2008 clearly depicts that the restructuring plans have paid off well. The operating cash flow, which was around $ 28.2 billion in 2006, increased to $ 38.1 billion at the end of the financial year of 2008. The dividend paid per ordinary share in 2006 was 38.4 cents and that at the end of 2008 had been 55.05 cents, experiencing almost 30% rise. The return on average capital employed was 22% in 2008, 5% increase from 2007. The replacement cost profit at the end of 2008 was estimated at $ 25,593 million, almost 39% higher from that of 2007. The capital expenditure and acquisitions of the oil major amounted to $ 30,700 million at the end of 2008 (BP p.l.c, 2009).
Conclusion
The case of restructuring at the British Petroleum under the leadership of Tony Hayward has shown spectacular results. The management has accepted that the financial year of 2008 had been outstanding for the company. And the credit of such terrific performance also resorts to the restructuring plans along with many other factors.
References
BP, 2007. BP Restructuring to Secure Long Term North Sea Future. Press Releases. [Online] Available at: http://www.bp.com/genericarticle.do?categoryId=2012968&contentId=7037784 [Accessed 23 November, 2009].
BP p.l.c, 2008. 100 Years of Operating at the Frontiers. Annual Review.
Kukec, A. M., 2007. BP restructuring to involve area offices. Daily Herald. [Online] Available at: http://www.dailyherald.com/story/?id=60251 [Accessed 23 November, 2009].
Macalister, T., 2007. Hayward outlines restructuring to BP staff. The Guardian. [Online] Available at: http://www.guardian.co.uk/business/2007/oct/11/2 [Accessed 22 November, 2009].
Bibliography
Hotten, R., 2007. BP restructuring fears downplayed. Telegraph. [Online] Available at: http://www.telegraph.co.uk/finance/markets/2817200/BP-restructuring-fears-downplayed.html [Accessed 23 November, 2009].
TNK-BP, No Date. Corporate Restructuring. Investors. [Online] Available at: http://www.tnk-bp.com/investors/restructuring/ [Accesses 23 November, 2009]. Read More
Cite this document
  • APA
  • MLA
  • CHICAGO
(“Finance Essay Example | Topics and Well Written Essays - 500 words - 2”, n.d.)
Finance Essay Example | Topics and Well Written Essays - 500 words - 2. Retrieved from https://studentshare.org/miscellaneous/1560238-finance
(Finance Essay Example | Topics and Well Written Essays - 500 Words - 2)
Finance Essay Example | Topics and Well Written Essays - 500 Words - 2. https://studentshare.org/miscellaneous/1560238-finance.
“Finance Essay Example | Topics and Well Written Essays - 500 Words - 2”, n.d. https://studentshare.org/miscellaneous/1560238-finance.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Finance

Finance

... Executive Summary GE Capital is considered to be a global market powerhouse. The total assets of the company are thought to comprise the fourth largest source of finance in Canada. It works with a combination of individuals and commercial entities. It also comprises insurance and renting companies all over the world. Transportation finance had an expectation of improved business conditions (Norton, Diamond and Pagach 245). This expectation was, however, prone to getting the effects of external and internal aspects on their profit margin. This involved the rise in the price of diesel, a shortage of drivers and an effort to maintain their depreciating fleets. Problem Statement The biggest challenge included debts from credit cards... ,...
4 Pages(1000 words)Case Study

Finance

...?Finance Table of Contents INTRODUCTION 3 Overview 3 Risk Measurement 5 Popular Way of Risk Measurement 6 ANALYSIS 8 Liquidity Risk Analysis of ANZ and CBA 8 Comparative Analysis between ANZ and CBA 10 CONCLUSION 11 References 13 INTRODUCTION The study aims at analyzing liquidity risk and the different facets of the risk measurement issues involved in this case. The examples of Australia and New Zealand Banking Group Limited (ANZ), and Commonwealth Bank of Australia (CBA), has been utilized here to discuss and compare the international liquidity risks of these financial institutions, and a comparative analysis between these have been done. Overview The term liquidity refers to the ability of the firm to cover its debt...
9 Pages(2250 words)Essay

Finance

...that includes the steps that should be done, needed resources, and feasibility of the proposal. Action Plan: 1. The principles of Islamic banking can be fully promoted among Muslims and non-Muslims by investing heavily on academic discipline, and research and development (R&D). The Islamic Foundation in UK had established the Markfield Institute of Higher Education (MIHE) just like the Islamic Financial Services Programs (IFSPS) in Australia, and Islamic Finance Professional Certificate (IFPC) in Malaysia. 2. Encourage different countries to capitalise Islamic banking and finance by giving seminars, workshops, trainings, etc. to their people. In fact, international orientation and conferences has been...
5 Pages(1250 words)Essay

Finance

.... The PV is the value on which the bond is currently trading. That value according to available data is $920. The FV for all bonds is the standard $1000. The annual coupon on the bond is 12.8% which make $128.2. Using this data the rate of return on the bond is 14.02%. Weights The following components are outstanding debt and equity: Book Value   Current portion of long-term debt 5.4 Notes payable 855.3 Accounts payable 432 Accrued liabilities 472.1 Long-term debt 435.9 Common stock, par (300 million shares outstanding) 2.8 Capital in excess of stated value 459.4 Retained earnings 3194.3 Total 5857.2 Weights are assigned to each according to their proportion to total financing: Weights   Current portion of long-term debt...
3 Pages(750 words)Case Study

Finance

...? Finance for Managers Faisal al Hajri number: 1068926 Mrs. Kay Smith  Word count: 4018 Question Analysis of The Present Position of Jools Furniture Ltd. The table below presents the calculations from the information provided in the case study about furniture business. Then, explanations and justifications of the results are discussed with some suggestions for improvements. Product Division Category Ratio 2009 2008 Result Liquidity Ratios Current Ratio 1.33 1.09 Unfavorable Quick Ratio 0.63 0.47 Unfavorable Stock Turnover 113.84 99.51 Favorable Debtor Days 42.69 27.58 Unfavorable Creditors Days 29.15 51.06 Unfavorable Profitability Ratios Net Profit Margin 3.36% 1.98% Favorable Operating Profit Margin 6.38% 5.71%...
4 Pages(1000 words)Essay

Finance

... Subprime Mortgage Crisis Introduction Since 2006, United s has experienced the worst housing market crisis that has run even up to today. Consequently, many Americans have lost their properties and some even left homeless following the subprime mortgage crisis. Prior this period, the U.S. housing market seemed a blooming and many borrowers believed that they would leap good fortunes in the future, and that refinancing would not be a problem. Far from that, the tempo of the housing market started cooling down. Very many borrowers could not refinance their mortgages that had gone up due to Adjustable Rate Mortgages (ARM). They were definitely in a big mess even as defaulters and foreclosures demanded their dues. I chose this topic... Subprime...
3 Pages(750 words)Admission/Application Essay

Finance

...? “In finance, risk is best judged in a portfolio context." Is this true? Why? Table of Contents Table of Contents 2 Introduction 3 Risk and Return 3Portfolio Theory 4 Capital Asset Pricing Model 4 Dividend Policy 5 Long Term Financing 5 Capital Structure (Irrelevance) 6  Capital Structure (in market perfection) 6 WACC Capital 6 Option (Financial and Real) 7 Empirical Evidence of Risk in Portfolio Context 7 Reference 8 Introduction In present corporate scenario, the market investors adopt the policy of undertaking diversified investments thereby resorting to a portfolio of investments. The investors take diversified investment strategy, where they invest their money in national as well as international investment instruments. Here... the...
6 Pages(1500 words)Essay

Finance

.... There were already reports of rising default on subprime mortgages that further fuelled quickly thereafter. Such mortgages are usually given to borrowers with below average credit ratings which are mainly due to their higher average risk of evasion in loan repayment. The financial institutions often charge higher interest on subprime mortgages in order to compensate for the risk taken. Thus, as the banks began clear out more loans to home owners, the housing prices rose. The easy accessibility of credit in U.S. in addition to large foreign inflows led to the boom in construction and increased consumer spending that was mostly financed by debt. The falling prices of houses resulted in more homes less worthy than...
9 Pages(2250 words)Essay

Finance

...Finance In the decision on who to hire, a good employer will be looking for an employee with a high quality that possesses good attributes. Many people who seek for jobs normally wonder why they are not picked for that particular job that they were interviewed (Arthur, pg 12). Some of the qualities that most employers are looking for include, Good communication skills, this is a process of passing a message from one party to another through a given media and immediate feedback is required. In regard to this quality, an employer will be looking for an employee who is able to communicate effectively and clearly in any medium, for instance it can be oral, verbal or written. This is because when an employee cannot be...
4 Pages(1000 words)Essay

Finance

...? Finance Table of Contents Introduction 3 Distribution analysis 3 2. Market analysis 6 3. Financial analysis 11 Fig 9: Efficiency Ratios 11 Liquidity ratios 12 Source: (Henry 8) 12 Profitability ratios 12 Source: (Henry 8) 13 Technical Analysis 13 Source: (Henry 9) 14 Risk analysis through Alpha and Beta testing 14 4. Prediction 15 Conclusion 16 Name of the Student Name of the Professor Subject Date Introduction The research report presents a general study and evaluation of the performance of an American company called American Eagle Outfitters (Bethel 20). The performance of American Eagle Outfitters is evaluated using four different types of analysis which is distribution analysis, marketing analysis, performance...
8 Pages(2000 words)Research Paper
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 Finance for FREE!

Contact Us