Assignment On Analysis of Financial Statement



(Using Ratio Analysis, Common Size Analysis & Percent Change analysis)
 Financial ratios are useful gauges of a firm's performance and financial situation. Ratios can be calculated from the information provided by the firm’s financial statements. Financial ratios can be used to analyze trends and to compare the firm's financials to those of other firms. According to Wikipedia, financial ratio is a relative magnitude of two selected numerical values taken from a firm's financial statements. There are many standard ratios used to try to evaluate the overall financial condition of an organization. Financial ratios may be used by managers within a firm, by current and potential shareholders (owners) of a firm, and by a firm's creditors. Financial analysts use financial ratios to compare the strengths and weaknesses between intra and Inter Company.

In this report, we interpreted financial statements of British Petroleum Plc & ExxonMobil Corporation, two largest companies in the oil & gas industry for 10 year (2002 to 2011). We collected all the annual reports from particular company’s website. We calculated major types of financial ratios for these two companies for 10 years and projected the financial condition of the company in the year 2012 using the average value of percent change in every year. We also compared this two company’s performance through common size analysis and percentage change analysis and comparing with the industry average gives us the necessary dimensions of analysis.