Financial Management British Petroleum Analysis

Financial Management

Financial Analysis of British Petroleum

British Petroleum is a global energy company based in London, United Kingdom, providing one sixth of the world’s oil and gas. BP is the fourth largest company in the world and has been in operation since the early 1900’s. BP has franchises in over 80 countries, including larger subdivisions such as BP America. BP America provides America with almost half of its oil and gas needs. Since the United States BP Gulf oil spill in 2010, BP has been enhancing its operations with environmentally safe procedures. The information in this analysis will focus on the figures before and after the 2010 U.S. oil spill.

The chart below is a two-year spread of BP’s income statement, balance sheet, and cash flow from the year 2010, the year of the oil spill in the gulf, and the year 2011.

Gulf of Mexico oil spill 1

$ million

2010 2011

Income statement

Production and manufacturing expenses 40,858 (3,800)

Profit (loss) before interest and taxation (40,858) 3,800

Finance costs 77 58

Profit (loss) before taxation (40,935) 3,742

Less: taxation 12,894 (1,387)

Profit (loss) for the period (28,041) 2,355

Balance sheet

Current assets

Trade and other receivables 5,943 8,487

Current liabilities

Trade and other payables (6,587) (5,425)

Provisions (7,938) (9,437)

Net current liabilities (8,582) (6,375)

Non-current assets

Other receivables 3,601 1,642

Non-current liabilities

Other payables (9,899) –

Provisions (8,397) (5,896)

Deferred tax 11,255 7,775

Net non-current liabilities (3,440) 3,521

Net assets (12,022) (2,854)

Cash flow statement

Profit (loss) before taxation (40,935) 3,742

Finance costs...