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British Petroleum (BP plc) is a global energy Company.

BP is the
third largest global energy and fourth largest Company in the
world with its oil fields and refineries in Alaska and the North
sea BP was founded in 1909 by William Knox ‘D’, Arcy. The
British government was for many years BP's largest single
stockholder, but by the late 1980s it had turned over the
company to private ownership. The company is headquartered in
London. BP having its oil and exploration projects in 29
countries, production plants in 23 countries and owns 27,800
petrol stations. The company also owns 23 refineries and 32
chemical manufacturing plants around the world. The workforce
of BP is more than 100000. BP is the largest oil and gas
producer in U.S. BP operates in six major markets of Europe,
America, Asia, Australia and Africa, more than 70% profit
generated in Europe and Asia.
Financial results of the Company

Profitability ratios

These ratio measure the Company’s earning power and


management effectiveness in running operations.

1. Gross profitability: It may be defined as the measure of how


much profit the entity has earned in relation to the amount of
sales that the Company has made (John r. Dson, 2007).

200 200 200


YEAR 2004 2005 6 7 8

BP 29.56 27.63 26.18 25.60 22.66


ROYAL
DUTCH 20.1 21.2 21.3 20.2 16.7
SHELL 3 6 4 4 5

Gross profit margin of BP in the fiscal year 2006 was 26.18%,


25.60% in 2007 and decreased by 3% in fiscal year 2008. It
was decreased due to increase in cost of goods sold
(265,906,000 in 2006 and was increased to 280,037,000 in
2008).
Gross profit margin of Royal dutch shell in fiscal year was
21.34% in fiscal year2006 and decreased by 1.10% in fiscal
year 2007 and further decreased by 5% in fiscal year 2008.

ROCE: The return on capital ratio is a fundamental measure


of business performance.

200 200 200 200


ROCE 2004 5 6 7
BP 10.78 14.05 15.46 15.39 16.09
ROYAL
DUTCH 13.7 18.8 16.0 14.8
SHELL 6 1 4 17.9

Three things have happened. First, years of high prices have an impact on oil demand. Oil demand growth in OECD started to
slow down in 2006 and 2007, when prices moved up rapidly, long before anyone was worried about the financial crisis and the
global recession. The impact is most clear in the U.S.. Over the first 9 months of this year, US oil consumption declined by 1.2
million barrel a day, the largest fall since 1980/81.

ROCE: The return on capital ratio is a fundamental measure of


business performance.

200 200 200 200


ROCE 2004 5 6 7 8
BP 10.78 14.05 15.46 15.39 16.09
ROYAL
DUTCH 13.7 18.8 16.0 14.8
SHELL 6 1 4 17.9 6
ROI: It refers to earnings from investment of capital, where
earnings are expressed as a proportion of the outlay (Sikka
2005).

200 200 200 200


ROI 2004 5 6 7 8
BP 13.58 17.06 15.96 13.81 23.16
ROYAL 14.68 19.61 16.77 18.53 15.52
DUTCH
SHELL

Liquidity ratios: