In this Research and Analysis project Report, I will be analyzing the financial performance of Â“Royal Dutch Shell PlcÂ”.
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I will be identifying and analyzing the factors effecting the financial position of Royal Dutch Shell plc. The role of non-financial performance indicators which effects the financial position of the company will also be kept in mind. I will analyze the financial position of the company compared to its performance with previous years, with the industry and with its rival (BP). The word Shell will be used in place of Royal Dutch Shell as it is convenient. I will base my comparison on figures of audited annual accounts for the last 3 years.
Financial analysis is an effective way of analyzing companyÂ’s performance. Ratio Analysis is the technique, which will mainly be used for financial analysis. My analysis will also be based upon the comparison of key ratios with main rival of Shell, which will indicate some of the core strategies in seeking a competitive position to achieve its purposes.
I will use Â‘Life CycleÂ’ model to analyze my findings on those markets, which materially contribute towards the companyÂ’s financial results. Then I will use PEST analysis to analyze different stages identified and nature of Â‘Life CycleÂ’.
My conclusions will be based on current situation of the company as compared to past years and future expectations using the techniques mentioned above.
Reasons for selection of the topic and organization are as follows:
Â§ Wide Information base: Shell, being a public limited company and one of the largest oil and gas concern in the finance sector the availability of timely, relevant, reliable information was an added advantage.
Â§ Relation to my studies: While studying my ACCA, one of the important skills which I have learned is the ability to analyze the financial statements, and such a comprehensive research and analysis project will definitely help in developing the same
Â§ The company: Â“Other reason is the investment prospective and size of the company. The company unveiled the largest expenditure program in its history, spend $36bn in 2008 compared to $25bn last year, as it seeks new sources of oil and gas to boost reserves and production and to better exploit its existing resourcesÂ”.
Â“Standard & Poor’s, the credit ratings agency, downgraded its long-term rating for BP, the Oil and Gas Company, and upgraded Royal Dutch Shell, BP’s closest rival, illustrating the widening perception of the two companyÂ’s circumstances. S&P noted Shell’s reserves replacement success and said current major projects should sustain its production plateau in the next decadeÂ”.
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