Analysis Financial Statement of Wood Group

INTRODUCTION

Wood group is a company which provides a broad range of engineering, production support, maintenance management and gas turbine overhaul and repair services to the oil & gas and power generation industries worldwide. Besides, the company’s services also support the full lifecycle of oil & gas and power generation facilities. The headquarters of the company is located in Aberdeen, Scotland, United Kingdom. The Company currently has approximately 29,000 employees in 50 countries on over the world and annually earns approximately $5.0 bn in sales. The Wood Group incorporates with many companies in UK, US, Canada, Cyprus, Colombia, Ireland, Argentina, Jersey and Switzerland.

BUSINESS STRATEGY AND HIGHLINGHTS

Wood group has a consistent strategy over years, concentrating on achieving long term sustainable growth by adding value to our customers’ operations with world leading, highly differentiated products and services. The most notable highlights in 2009 were expanded operation in the Middle East and also grow its engineering activities in Africa and in Asia Pacific. Besides, the acquisition of Baker Energy in Production Facilities enhanced and established a market leadership position in US Gulf of Mexico as well as in Australia. And they also have formed two new industry segment groups, one focus on oil and gas and the other on power and industrial.

Part A: Critically analyze and evaluate the financial performance of the company.

In this part, four divisions will be investigated to analyze and evaluate the performance of Wood Group: profitability, short-term liquidity, long-term liquidity and investor ratios.

1. Profitability

Income statement of Wood Group

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Chart 1. Wood Group’s revenue during 2005-2009

The revenue of Wood group from 2005 to 2008 increased gradually however in 2009, it fall down 6% compare to 2008. Due to the reduction by 19% from Well Support services in 2009. Principally because the impact of the...