Financial Analysis

Module: MANG 6079 Accounting & Control

Title: Financial Reporting and Analysis of “Royal Dutch Shell”

Group Members:

Minghatai Kiatteppawan (24904724)

Sarpsiree Srithai (24904651)

Luxi Dai (24457507)

Xiaoying Liu (24853623)

Xiongfeng Xiao (24873101)

Financial Reporting and Analysis of “Royal Dutch Shell”

1. Introduction

Royal Dutch Shell is an energy and petrochemical company which has rapidly developed in the area of oil and gas industry. According to Fortune (2011), it is the world’s second largest company with 97,000 employees, and has operated in over 90 countries. This brief report is based on Shell’s annual report 2010, mainly to discuss the financial statements and financial director’s review. In order to indicate Shell’s business growth and financial health, this report provides a comprehensive financial analysis by comparing some key financial performance indicators, and also compares its market share price and investment ratio with BP, its core competitor.

2. Financial highlights with analysis

After reviewing the financial statements and highlights of Shell’s annual report for the year of 2010, it is clear to judge Shell’s financial performance and operating situation by comparing key financial figures, such as net capital investment, income, net cash from operating activities, shareholder return and gearing.

◆ Income Statement

Based on Shell’s income statement (Figure 1.1), its revenue was $368,056 million in 2010, 32% higher than 2009. In addition, its gross profit from every business segment of 2010 was $20,474 million. As directors commented on the financial and operating review, the earning of 2010 was up 61% from 2009. After deducting the non-controlling interest, the net profit...