Products Advertisement Essay Example | Topics and Well Written Essays - 250 words

Products Advertisement - Essay Example The essay "Products Advertisement" analyzes how different companies influence the people’s decision to purchase their goods and services which depend heavily on a number of subliminal messages. The messages give psychological convincement and persuasion to buy the commodities of particular organization or firm. The messages give psychological convincement and persuasion to buy the commodities of particular organization or firm. The more people see the subliminal messages the more they get persuaded to have a taste of the commodity advertised. Moreover, it also helps in creating awareness of the good sold. The subliminal messages play with the psychology of people by giving the mind the message that most people presume enjoyable. It may include sex images. In toure de France ads, the type of subliminal messages that they try to imitate are brand selling. However, they also have some product brand association included in their ads. Moreover, the types of subliminal messages that the Baskin Robins uses in its advertisements are a brand association. Even though they do little advertisements, the few that they do try to joke with the psychology of p0eople regarding the brand name of the firm. The Tostitos Company though presumed as a racist company tries to sell their brand name by the subliminal ads. However, Amazon uses brand association to advertise their products. However, they also use the sex ads to advertise their products. Tostitos uses political campaigning for their products.

Theoretical aspects of the phenomenon of child soldiers and scientific Essay

Theoretical aspects of the phenomenon of child soldiers and scientific issues related to the topic - Essay Example During colonial campaigns, armies would capture the children of prominent chieftains and raise them according to the colonial nation’s customs and laws. Nazi Germany used Hitler Youth movement to try to fight the Allied forces in the closing days of World War II. However each of these cases was isolated by time and geography. They were also exceptions to the level of armed combat which children performed. Ancient wars involved minors as charioteers and armor bearers for adult warriors. This practice can be found in the Bible. War in the middle ages was fought by strong men who had the physical strength to fight in those wars. Children were only used for support roles as they could not be participants in armed combat. The Roman army for instance required physical fitness as criteria for military service which only adult combatants could perform. Fighting with swords, spears, shields and heavy weapons required the use of adult combatants. During the middle ages, military units comprised of knights, heavy cavalry and infantry were extensively used in combat. They used armor and weapons which only adults could perform. The modern era of warfare began with the use of gunpowder. The modern nature of conflict saw the extensive use of muskets, cannons and cavalry against opponents. The weapons and training required to operate these weapons could only be performed by adult combatants. The adv ent of the industrial age also revolutionized the concept of warfare. By the twentieth century, modern armies were now using tanks, cannons, artillery, fighter jets, submarines and naval warships against each other. Again the use of children was mostly for support roles rather than combat purposes since the expertise required to train and use these weapons was only possible for adult combatants. During the middle ages, young boys were used as squires but their

The death penalty Essay Example for Free

The death penalty Essay During act1 the play starts were a group of people in Salem go dancing in the woods with a slave woman called Tituba, Reverrand Parris sees this but is spotted doing so, the girls run away.  The next day reverrand Parris is beside Betty who is ill, the doctor suspects the girl has been taken over by supernatural forces. Parris questions Abigail, who was with her, he asks her about witchcraft and Tituba, he then sends for reverrand Hale, an authority on witchcraft. Mr Mrs Putnam see how Betty is and says that she sent her daughter Ruth to raise spirits of her dead babies to see who murdered them so that is another reason for the happenings in the woods that night. Later the girls who were dancing in the woods joined Betty beside her bedside, theyre all woried that they may be tried for witchraft. Abigail has them on their own, she slaps Betty to try to sustain her, she also worns the other girls not to breath a word of when she drank blood in the woods, she uses scare tactics. Abigail and Proctor starts talking about their affair and their affections for each other, while Betty is next to them in bed hearing every word they say, Betty then screams to stop them. Parris, Rebbecca, and Giles come to see whats happened with Betty, Rebbecca manages to restrain her. Parris wants to have a witch hunt, but proctor doesnt believe in witches, they start to argue. The Putnams continue to disagree with the rest of the towns people of Salem about land rights, which creates a lot of tension.  Reverrand Hale tries to wake Betty but doesnt succeed, he then turns to Abigail questions her about the witchery, in hesitation shes quick to accuse Tituba. She accuses two others, realises Titubas escape by naming others, she chants the names of the other girls in the villiage that she believes has seen the devil, Hale is pleased shes confessed and tells her to continue talking. Crucible: A melting pot where basic elements are mixed together to give an explosive force.  This is the title of the play, I think this title is very fitting with the contents of the play, it seems to be like when the characters (basic elements) are put together, they produce arguments, action, tension, fear(explosive force).  Arthur Millers background He was born in New York, 17th October 1915, he was brought up in the brooklyn area. His father owned a clothing factor which collapsed, following this lead Arthur Miller to produce the play Death of a salesman and A view from a bridge set in Brooklyn. During his college years he managed to write plays although he had college and other jobs at the same time.  His first success was All my sons which was about a father forced to realise dangerous moral comprimises changing the American dream of wealth. His biggest hit was Death of a salesman in 1949 which won the Pulitzer Prize. The crucible won an award in 1953, but wasnt an immediate commercial success, this was the time of Mc Carthyism. Mc Carthyism is an issue in which to consider in the play, with Salem being a very theocratic society. In the arrly 1950s Joseph McCarthy, a senator, managed to create a national campaign against communists, ex-communists and anyone who assoiated with them. He made many unfounded statements about the numbers of secret communists in important positions, as chairman of a senate commitee he interrogated many witnesses and tried to make them inform on friends and colleagues. As the anti-communist hysteria increased many people were hounded from their jobs or were prevented from working. McCarthys unproven accusations and aggresive interrogations gradually brought him into disrepute. Witchcraft is an important scene in which act 1 is dramatic, witchcraft was a serious matter in those days, and even more in a religious community. Witchery led to deaths, fall outs, false accusations, murders, tortures, exectutions, being burnt etc which if used in the play, which it was, it can be used to build extreme dramatic situations which can have a powerful effect on the audience. Witches were thaught to be in league with the devil, who was their master, the devil/satan is believed to roam the world for human souls to tempt into hell. He is a supreme enemy of everything thats good and holy. The Christian churches persued and persicuted supposed witches. A common test for a person accused for being a witch was pricking with a needle. All witches were supposed to have somewhere on their bodies, a mark made by the devil himself which was insensitive to pain. Any who were found guilty suffered the death penalty. Whichcraft trials in Salem were common, I think Arthur Miller used it in his play to worry the audience into thinking death was appartant and inevitable, when witchery was present. Whenever death is present in a play, the dramatic tension is bound to rise because death is a most serious matter to anyone. If ever witchery or satanic happenings occured in Salem, it would most probably be taken to court until someone was proven guilty and hanged, maybe Arthur Miller knew this and thaught that the audience would know it too? therefore rising the dramatic tension in the play.

Royal Dutch Shell Plc Financial Analysis

Royal Dutch Shell Plc Financial Analysis I. INTRODUCTION a. Topic Chosen and its context In this Research and Analysis project Report, I will be analyzing the financial performance of Royal Dutch Shell Plc. 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 companys 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 Life Cycle model to analyze my findings on those markets, which materially contribute towards the companys financial results. Then I will use PEST analysis to analyze different stages identified and nature of Life Cycle. My conclusions will be based on current situation of the company as compared to past years and future expectations using the techniques mentioned above. b. Reasons for selection Reasons for selection of the topic and organization are as follows:  § 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.  § 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  § The company: 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 resources. (Ft.com, July2008) Standard Poors, the credit ratings agency, downgraded its long-term rating for BP, the Oil and Gas Company, and upgraded Royal Dutch Shell, BPs closest rival, illustrating the widening perception of the two companys circumstances. SP noted Shells reserves replacement success and said current major projects should sustain its production plateau in the next decade. (Ft.com, September 2008) c. Aims and Objectives The aims and objectives contains the comparison of the financial performance of the petroleum sector to assess the worth of the company in its operational industry .To get an idea about the attitude of the management towards the operations of the company by assessing the companys cash flow position compared to its profits. Also to analyze the risks faces by the company I will take in to account Solvency, Liquidity and Capital structures. d. Research Approach ACCA provides a complete guide about different sections of the report, and also this provides the opportunity to plan and think to allocate my time carefully. This planning will help me to concentrate on each section of the report so that I can focus on core and important areas of the report. This also enables me not to overspend my time in explaining any section of the report. Information mainly collected from annual reports of the company and also different sort of other sources like ACCA text books, internet, newspaper, library etc. Traditional ratio analysis has been used to measure and compare the financial performance of the company over last 3 years with its rivals. Ratio analysis will focus on the following key ratios:  § Profitability Ratios This ratio is the reflection of how well the business is performing in term of profits in order to pay the shareholders. Key ratios are: a. Gross Profit Margin b. Operating Profit Margin c. Return on Average Capital Employed  § Liquidity Ratios Liquidity ratio refers to the state of an assets nearness to cash to meet business short term obligations as they fell due. Key ratios a. Current Ratio b. Quick ratio (Acid Test Ratio)  § Efficiency Ratios These ratios show how efficiently the business is employing those resources invested in fixed assets and working capital. Ratios are: a. Debtor Days b. Creditor Days  § Risk Ratios These ratios are used to assess how healthy and sound the business is in term of capital or finances. Ratios are a. Gearing Ratio b. Interest Cover  § Investors Ratios Both present and prospective shareholders look at these ratios to measure their return and to make economic decisions. Key ratios are a. Earnings per Share b. Diluted Earnings per Share II. INFORMATION GATHERING a. Sources of Information Used The information has been collected from different secondary sources for the preparation of this project. Main secondary sources which are use to gather information is as follows:  § Annual Accounts: The annual audited accounts of Shell are the main secondary source of information to use in this project. These annual audited accounts were available from stock exchange. As it supposed to be accurate and reliable thus provides me with an ideal source of annual accounts of the company. I have used only the audited annual accounts for the last three years of the company though unaudited quarterly review until July was available, to make certain that only reliable and accurate source of information is used in my research and analysis project. These audited annual accounts provides me all the information for the last three years which is essential in computing key financial ratios and also to make a comparison with rivals and industry averages of the company. Annual accounts of the rivals for the last three years are also used to make comparison with the Shell.  § Financial Analysts Report: They are professional people and their views are independent and their analysis helped the shareholders making economic decisions, which in turns affects the very existence of the company.  § Kaplans Tutorial Text: Kaplans tutorial text for Bsc (Hons) in Applied Accounting also helped me a lot for gathering information and also about the different requirements of the reports. It also helped in focusing a particular section of the report and also helped in overall design of the project so that nothing is missing in the project.  § News Papers: Getting in touch with the business section of leading newspapers like The Times, The Independent, Daily Express and The Telegraph was very useful as it provided me guidance on the economy overall and as well the movement in the share prices of different companies. b. Methods Used To Collect Information To collect information various methods are used like,  § Internet: Internet offers a speedy and impersonal way of getting to know the basics of the services that a company provides. (BPP 2005 Paper 3.4) I visited www.shell.com to access the financial reports of the company and press releases. I also visited www.bp.com to get information about the rival company of Shell for the purpose of comparison. Also I visited www.ft.com which really helped me a lot for the up to date information about the Shell and BP. I have also visited www.wikipedia.org to get information which helped me a lot to understand the oil and gas industry. In addition I visited the www.bbc.co.uk to get the latest news and important interviews.  § Use of the E-mail: For communication with Shell people I use to e-mail them during my research whenever I want to get some important information. They responded quickly to answer my query.  § Library Research: Libraries proved quite helpful so some libraries in London, Kaplan Financial College library and City Business Library in Moorgate London for general reading of the newspapers, journals, different books, magazines to get important information about Shell and BP. I spend most of my time in city business library, where I was able to get specific information through different CD ROMS which included different databases search designed specifically for getting information about different companies. Some of the CD ROMs are:  § Financial Analysis Made Easy: This database provided the detailed key financial data in the form of profit and loss accounts and the balance sheet. Also it helped me to get important ratios of the Shell and BP and their comparison with the preceding years in the form of graphs.  § Marketing and Business Information Centre (Data Monitor): This database provided vital information regarding the company, industry and market news for the research and analysis. This database contains records of hundreds of companies in UK and worldwide. When I looked at the Shell data, it really helped me by providing the overview and the detailed information. Then same thing was true for its rival BP. c. Limitations in the Information Gathering A number of difficulties I have faced sometime in getting the required information. For instance, I was expecting to get more information from the newspaper, but actually it was not. The newspaper only provides information about a particular date and some events but in depth information cannot be obtained and also articles are found in different newspaper i.e. nothing is new than others. Similarly when I went to City library, I was not aware of using FAME database, so when I tried to get information from database it took me too long. Moreover it only provides me the financial data in the form of graphs. Another problem which I have faced is the information overload on the internet. Whenever I tried to search something on the net it gives me too many results which some time confused me which information I should use and which is not. d. Accounting Technique Used and Limitations In this report to analyze the financial performance of Shell comparing to BP ratio analysis has been used. Ratios are important tool in analyzing the financial performance of the company. Ratios are used because shareholders and potential investors are primarily concerned with receiving an adequate return on their investment. An earnings per share is a key ratio that is to be used to determine the returns on shareholders fund. Suppliers and lenders are concerned with the security of their debt or loan. So they are mainly focused on the gearing level the company is having and also the interest cover. More over management is concerned with the trend and level of profits, so ratios are the main measure of the success. Furthermore, managements bonuses are linked to the profits of the company. I have calculated the key ratios in an appendix from 2006-2008 for Shell and BP and they did analyze the results. Ratios were used as a tool to assist analysis and to focus attention systematically on important areas. Ratios summarize information in an understandable form and also helped me to identify trends and relationships. There are also limitations of financial statements and ratio analysis as they are based on the past and ratios are not predictive if they are based on historical information. Ratios ignores any future action which is or to be taken by management. Another limitation faced by ratio analysis is the fact that the ratios results may be distorted if there are differences in the accounting policies. (Kaplan Financial Study Text Paper F7) In all, Ratios have limitations but are still regarded as the best tool for analyzing the financial performance of the business and so I also used it. III. ANALYSIS In this section of the report I will explain and analyze the financial performance of Shell and will compare its results with BP.I will also explain Shells financial position in the current year. a. Company History: The Royal Dutch Shell Group was created in February 1907 when the Royal Dutch Petroleum Company and the Shell Transport and Trading Company Ltd of theUnited Kingdommerged their operations. This move was largely driven by the need to compete globally with the predominant American oil company (www.wikipedia.org) b. Financial Analysis: Here is the analysis of the financial data of Shell (Revenue, GP and NP) over the last three years.  § The revenues in 2008 were ($458.4 billion) 28.8% higher than in 2007, when they were ($355.8 billion) 11.6% higher than in 2006. (Appendix)  § The oil and gas prices was One of the main reasons of increase in revenues in 2008  § Brent crude oil prices average $97.14 per barrel in 2008 compared with $72.45 in 2007, while West Texas Intermediate average $99.72 per barrel compared with $72.16 a year earlier. Oil prices saw great fluctuation in 2008. (Annual Report Shell 2008)  § A 6% increase in Gross Profit of Shell in year 2008 and 2007 as compared to gross profit in year. (Appendix)  § Its shows an increase in production costs in line with increase in revenues on high margin products.  § Earnings ($26.5 billion) were lower by 17% in 2008 compared to 2007, when they were ($31.9 billion) 21% higher than in 2006 ($26.3 billion). (Appendix) The decrease in 2008, compared with 2007, reflected the effect of declining oil prices on inventory in the second half of the year, lower production volumes, lower realised refining margins and higher operating costs. These more than offset the positive impact on earnings from higher realised oil and gas prices as well as higher LNG and GTL product prices. (Annual Report Shell 2008) Second quarter 2009 reported earnings were $3,822 million compared to earnings of $11,556 million in the same quarter a year ago. (2nd quarter results 2009, www.shell.com )  § Earnings By Business Segments : All figures in this table are in $million The table shows that earnings in 2008 were higher by 47% in Exploration Production, Gas Power and Oil Sands segments as compare to 2007. On other hand earnings were lower by 100% in 2008 as compare to 2007 in Oil Products, Chemicals and Corporate segments. This 100% reduction in last three segments causes overall reduction of earning in 2008. In the Second quarter Exploration Production segment earnings were $1,334 million compared to $5,881 million a year ago. Earnings compared to the second quarter 2008 reflected the impact of significantly lower oil and gas prices on revenues, lower oil and gas production volumes, higher exploration expenses and non-cash pension charges, which were partly offset by lower royalty and tax expenses. (2nd quarter results 2009, www.shell.com ) Comparison of Shell with BP  § Revenue Growth: Shell and BP revenue over the last three years is shown in the graph: Growth in Revenue in $ Million Shell and BP revenue showed a consistent growth over a period of 3 years. In 2008 Shell revenue 26.9% higher than BP. Which shows that Shell growing consistently as Shell revenue were higher 25.2% 19.9% from BP in 2007 2006 respectively. (Appendix) a. Profitability Ratios The profitability of a company is important and a key measure of its success. The figures shown in the profit and loss account mean very little themselves. However, by expressing them as a percentage of sales they become much more useful. The figures can then be compared with previous years or with other similar companies. (Student Accountant ACCA Magazine, Christopher, 1999.) Gross Profit Margin: Gross profit margin shows earning on sales of a company. In the 2nd quarter of 2009 the gross profit margin has fallen 62% compared to last years 2nd quarter results. An indication of high profit margin is that the company earned well on sales by keeping overhead cost in control. Gross profit margin of 2008 is lower than previous years. Net Profit: Shell net profit margin dropped by 3.2% to 5.8% in 2008 from 9% in 2007. And margin in 2006 was 8.3%.BP net profit margin dropped by 1.5% to 5.9% in 2008 from 7.4% in 2007. The 2006 margin was 8.4%. (Appendix) Growth in Net Profit Shell and BP (%) The profit margin is mainly used as an internal comparison tool. As there are different levels of expenditure involved it is therefore sometimes difficult to accurately compare the net profit ratio for different entities. As compared to BP Shells net profit margin dropped by a higher percentage in 2008.On the other hand if we see the year 2007 the Shell profits are higher than the BP. Return on Average Capital Employed: ROACE reflects the ability of the company to utilize the resources i.e. capital in generating revenue. Capital employed consists of total equity, currant debt and non-current debts. The published segment level contains the computation and calculation of the tax rate and the minority interest components. The strong income generation is the only reason for change in ROACE from18% to 24% between 2006 and 2008. There is a significant decrease in the capital employed from 24% to 18% in 2008 as compare to 2007. A significant decrease in income attributable to shareholders is partly offset by an increase in capital employed, resulted in a decrease in ROACE of 6.0% in 2008(18%) compared to 2007 (24%). The 2006 figure was 23%. (Appendix and Annual Report Shell 2008) ROACE is defined as the sum of the current and previous three quarters income adjusted for interest expense, after tax, divided by the average capital employed for the period. In the 2nd quarter or 2009 the ROAC stands at 8.3% way below the 25.8% in the 2nd quarter of 2008. (2nd quarter results 2009, www.shell.com ) On the other hand BP utilization of its capital resources was showing a sorry picture. BP ROCE has moved in a range of 16% to 19% between 2006 and 2008. BPs ROCE was 19% in 2006, and then reduced to 16% in 2007, followed by an increase of 1% to stand at 17%. This was due to lower income attributable to shareholders in 3 years time. This increase in 2008 was due to some increase in income attributable to shareholders. (Appendix) ROCE Shell and BP (%) The drop in oil price in the second half of 2008 had a significant impact on earnings. The strengthening of the dollar against other main currencies reduced the impact of Shells investment plans on capital employed. b. Efficiency Ratios Debtor Days Shells receivable days has fallen from 76 days in 2007 to 65 days in 2008. The figure for 2006 was 68 days. This was due to the effective and better controlled credit policy. (Appendix) BP on the other hand, showed increase in its collection to 30 days in 2008 from 49 days in 2007. The 2006 figure stands at 53 days. All this reflected an aggressive and comprehensive credit control policy and ability to collect from customers. (Appendix) Creditors Days The payment to creditors from Shell showed improvement in payment to creditors in 2008 if we compare the figures to last three years. As creditors days reduced to 78 days in 2008 from 93 days in 2007, while the figure in 2006 was 87. This improvement shows that company has liquidity to pay off its debts and also helped in making stronger relationship with creditors, which could be Suppliers, lenders. (Appendix) BPs creditors days showed reduction over a period of 3 years i.e. from 82 days in 2006 to 78 days in 2007 and more improved to 46 days in 2008 which showed a good sign for the company. (Appendix) c. Liquidity Ratios Current Ratio As short-term creditors prefer a high current ratio since it reduces their risk. The current ratio measures the adequacy of current assets to meet the companys short-term liabilities as they fall due. Traditionally, a current ratio of 2:1 or higher was regarded as appropriate for most businesses to maintain creditworthiness. However, more recently a figure of 1.5:1 is regarded as a norm. (Kaplan Financial, Paper F7 Study Text) Current ratio for Shell in 2008 was 1.1 and remained Constant between 2006 and 2007 to stand at 1.2. This shows better position for Shell and its ability to pay short term liabilities as they fall due. (Appendix) BP current ratio was also healthy between 2006 and 2007, but in 2008 the ratio was below 1 which may be not a good sign for short term creditors. But it was ok as for as it remains near to 1. (Appendix) One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation value. SO the quick ratio is an alternative measure of liquidity that does not include inventory in the current assets. (Paper3.6, BPP Professional Education, June 2007) Quick Ratio The quick ratio also known as the acid test ratio eliminates inventory from the currant assets. It provides the acid test of whether the company has sufficient liquid resources (receivables and cash) to settle its short term liabilities. Normal level for quick ratio ranges from 1:1 to 0.7:1. (Kaplan Financial, Paper F7 Study Text) For Shell, liquidity ratio remained unchanged within the industry standards between 2006 and 2008 to stand at 0.9. This shows the companys ability to pay short liabilities from most liquid resources i.e. receivables and cash not inventory. (Appendix) BPs quick ratio showed a sorry picture and remains unchanged on 0.7 between 2006 and 2008, as it was standing at the danger level of 0.7 meaning that BP is not having enough liquid resources to pay off the liabilities due. (Appendix) d. Risk Ratios Gearing: Gearing is the relationship between the companys fixed return capital and its equity capital. Gearing ratio indicates the degree of risk attached to the company and the sensitivity of earnings and dividends to change in profitability and activity level. High geared businesses uses large proportion of fixed return capital, so there are greater chances of insolvency and ultimately return to shareholders grow proportionately more if profits are growing. While low geared businesses provide scope to increase borrowings when potential profitable projects are available and can usually grow more easily. (Kaplan Financial, Paper F7 Study Text) Gearing levels in (%) (2006-2008) Shell maintained smooth profits and more suitable assets for security in order to make use of gearing successfully. Shells gearing level increased in 2008 due to more debts taken as compared to 2006 and 2007. Gearing was 23% in 2008 compared to 17% in 2007. The gearing ratio was 15% in 2006. The increase was due to rise in the total debt. On the other hand, BP gearing level was also high standing between 36% to 28% with 36% in 2008 compare to 28% in 2006, while 2007 figure was 33%, which is higher than Shell. High level of gearing means high risk to business, but this is compensated by a significant increase in profits and the returns to the shareholders. So Shell can borrow more easily in future. Interest Cover Companys interest cover indicates the ability to pay interest out of profits generated. Low interest cover indicates to the shareholders that their dividends are at risk (because most profits are use to pay interest payments) and the company may have difficulty financing its debts if its profits fall. (Kaplan Financial, Paper F7 Study text) Shells interest cover has decreased to 42 times in 2008 compared to 45 times in 2007. The interest covers for 2006 was 38 times. This shows Shells ability to finance its debts and the ability to pay interest out of the profits for sure. As investors are interested in the risk level the company is in, it is a healthy sign. Interest Cover in Times (2006-2008) For BP, there is an increase of interest cover to 30 times as compare to 29 times in 2007 but in 2007 there is a huge reduction in interest cover to 29 times from 49 times in 2006 which clearly indicates the inability of BP to finance its debt and to pay interest out of profits generated. That makes BP riskier than Shell for investment purposes. e. Investors Ratios Earnings per Share (EPS): Earnings per Share for Shell decreased in 2008 from $5 in 2007 to $4.27 in 2008. This was due to decline in profits followed by the repurchase of the shares, which causes a net decrease of 105 million in the number of ordinary shares outstanding as a result of share buybacks. As widespread the use of the EPS as a yardstick for investment decisions. Share price of company might fall if it looks as if EPS is going to be low. EPS increased to $5 in 2007 compared to $3.97 in 2006, this was due to decrease in the number of ordinary shares in 2007 as company repurchased its 112 million shares of common stock for cancellation at a gross cost of $4.4billion.this purchase reduced the number of shares outstanding to 1.7% in 2007 and by 7.3% in total since the commencement of share repurchases following the unification into Royal Dutch Shell and successful completion of Royal Dutch Minority tender (August 2005). (Annual Report Shell 2008) In the first six months of 2009 the EPS for Shell is $1.19 compared to the six month figure of $3.34 of the same period of 2009 (2nd quarter results 2009, www.shell.com ) Earnings Per Share in $ (2006-2008) BPs Basic Earnings per Share increased in 2008 to $1.13 from $1.09 in 2007. This was due to the appreciation in the profits followed by the repurchase of shares, which causes a net decrease of 373 million in the number o shares. Basic EPS decline by 0.01 to stands at $1.09 in 2007 compared to $1.10 in 2006. This was due to the declining of profits of BP. (BP Annual Report 2008) Diluted Earnings per Share(DEPS) : Diluted Earnings Per Share attempts to alert the shareholders to the potential impact on the Earnings per Share due to change in equity share capital in future owing to circumstances which exist now-known as dilution. The most common type of dilution is an option or warrant which gives the holder right to buy shares at time in future at predetermined price. (Kaplan Financial, Paper F7 Study Text) Diluted Earnings Per Share in $ (2006-2008) Shells DEPS reduced due to the reduction in the profits and number of shares to $4.26 in 2008 compared to $4.99 in 2007, while it was $3.95 in 2006. BPs DEPS increased to $1.12 in 2008 from $1.08 in 2007. The figure was $1.09 in 2006. The main reason for this was increase in profits despite shares in numbers was reduced. (Appendix) f. Cash Flow Statement: Shells cash flow from operating activities has increased by 27% reaching a record level of $43.9 billion in 2008 compared with $34.5 billion in 2007 and $31.7 billion in 2006. This improvement in cash flow from operations was a result of reduces working capital in 2008 compared to 2007. The increase in the operating activity in 2007 mainly because of increase in income as well as a reduction in taxation paid in 2007 compared to 2006. In 2009, Shells cash flow from operating activities reduced in the first two quarters to stands at $8478 million compared to $21,030 million in the same period of 2008. (2nd quarter results 2009, www.shell.com ) BPs cash flow from operation declined to $24.7 billion in 2007 compared to $28.2 billion in 2006, but the cash from operating activity increased in 2008. This is menially because of increase in income. (BP Annual Report 2008) Higher capital expenditure in 2008 compared to 2007 made Shell to use its Cash flow in investing activities i.e. $28.9 billion in 2008 compare to $14.6 Billion in 2007. In 2009, Shell continued to invest more with cash flow from investing activities stands at $(13,829) million in six months from $(12,275) million in 2007. (2nd quarter results, www.shell.com) But there was less cash paid out in investing activity in 2007(-14.6 billion) as compare to 2006(-20.9 billion) and the main reason was that the proceeds from sale of asset was higher and les capital expenditure in 2007 as compare to 2006. (Shell Annual Report 2008) BP was also having strong investment with $(22.8) billion in 2008 from $(14.8) billion in 2007. The figure for 2006 was $(9.5) billion. (BP Annual Report 2008) In 2008, as Shell took more debts which results in Shells cash flow from/used in financing activities reduced to $(9.4) billion in 2008 from $(19.4) billion in 2007.As Shell acquired Canada minority interest in 2007 resulting Cash flow from financing activity increased in 2007 from (13.7) billion in 2006. There was a small increase of BPs Net cash flow from/ used in financing activities from (9.0) billion in 2007 to (10.5) billion in 2008 menially because of more dividends paid and less repurchase of shares in 2008. Net cash from financing activities was reduced to $(9.0) billion in 2007 from $(19.0) billion in 2006. (BP Annual Report 2008) Cash and Cash Equivalent of Shell and BP in Billions Cash and Cash equivalent of Shell reached 15.2 billion at the end of 2008, up by 57% as compare to 2007 figure of 9.6 billion. Which is good sign for Shell as there cash and cash equivalent was higher as well in 2007 as compare to 2006 figure of 9.0 billion. BPs cash and cash equivalent also increased to $8.2 billion in 2008 from $3.5 billion in 2007 and also up from 2006 level of $2.5 billion. (Shell and BP Annual Report 2008) This shows that Shell has a sound position and has no problem what so ever in cash flow compared to its rivals. c. Non-Financial Analysis In this section of the report I will be analyzing the corporate social responsibility and the SWOT analysis. Corporate Social Responsibility (CSR) We recognise that our continuing business success depends on helping to meet the worlds growing energy needs in environmentally and socially responsible ways. To manage todays business risks and deliver our strategy, it is critical that we maintain the trust of a wide range of stakeholders. (Shell Annual Report 2008) Environmental Social performance Greenhouse Gas Emissions In 2008 despite growing business, Shell operated facilities emitted 75 million tons of GHGs, (measured on a CO2 equivalent basis), about 7 million lower than the previous year, and nearly 30% below 1990 levels. (Shell Annual Report 2008) Flaring Since 2001, Exploration Production has reduced its natural gas flaring by more than 70%. In 2008, total flaring in Exploration Production dropped again mostly due to reduces flaring in Malaysia and Gabon, as investment and operational improvement programs showed result. In 2008 flaring levels in Nigeria were same as in 2007. Spills Shell has reduced the amount of oil and oil products spilled from operations for reasons, Shell can control, like corrosion or operational failures. Spills from sabotage or extreme weather, like hurricanes, which are harder to prevent, have fluctuated with events. In 2008 the number and amount spilled for operational reasons dropped Royal Dutch Shell Plc Financial Analysis Royal Dutch Shell Plc Financial Analysis I. INTRODUCTION a. Topic Chosen and its context In this Research and Analysis project Report, I will be analyzing the financial performance of Royal Dutch Shell Plc. 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 companys 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 Life Cycle model to analyze my findings on those markets, which materially contribute towards the companys financial results. Then I will use PEST analysis to analyze different stages identified and nature of Life Cycle. My conclusions will be based on current situation of the company as compared to past years and future expectations using the techniques mentioned above. b. Reasons for selection Reasons for selection of the topic and organization are as follows:  § 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.  § 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  § The company: 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 resources. (Ft.com, July2008) Standard Poors, the credit ratings agency, downgraded its long-term rating for BP, the Oil and Gas Company, and upgraded Royal Dutch Shell, BPs closest rival, illustrating the widening perception of the two companys circumstances. SP noted Shells reserves replacement success and said current major projects should sustain its production plateau in the next decade. (Ft.com, September 2008) c. Aims and Objectives The aims and objectives contains the comparison of the financial performance of the petroleum sector to assess the worth of the company in its operational industry .To get an idea about the attitude of the management towards the operations of the company by assessing the companys cash flow position compared to its profits. Also to analyze the risks faces by the company I will take in to account Solvency, Liquidity and Capital structures. d. Research Approach ACCA provides a complete guide about different sections of the report, and also this provides the opportunity to plan and think to allocate my time carefully. This planning will help me to concentrate on each section of the report so that I can focus on core and important areas of the report. This also enables me not to overspend my time in explaining any section of the report. Information mainly collected from annual reports of the company and also different sort of other sources like ACCA text books, internet, newspaper, library etc. Traditional ratio analysis has been used to measure and compare the financial performance of the company over last 3 years with its rivals. Ratio analysis will focus on the following key ratios:  § Profitability Ratios This ratio is the reflection of how well the business is performing in term of profits in order to pay the shareholders. Key ratios are: a. Gross Profit Margin b. Operating Profit Margin c. Return on Average Capital Employed  § Liquidity Ratios Liquidity ratio refers to the state of an assets nearness to cash to meet business short term obligations as they fell due. Key ratios a. Current Ratio b. Quick ratio (Acid Test Ratio)  § Efficiency Ratios These ratios show how efficiently the business is employing those resources invested in fixed assets and working capital. Ratios are: a. Debtor Days b. Creditor Days  § Risk Ratios These ratios are used to assess how healthy and sound the business is in term of capital or finances. Ratios are a. Gearing Ratio b. Interest Cover  § Investors Ratios Both present and prospective shareholders look at these ratios to measure their return and to make economic decisions. Key ratios are a. Earnings per Share b. Diluted Earnings per Share II. INFORMATION GATHERING a. Sources of Information Used The information has been collected from different secondary sources for the preparation of this project. Main secondary sources which are use to gather information is as follows:  § Annual Accounts: The annual audited accounts of Shell are the main secondary source of information to use in this project. These annual audited accounts were available from stock exchange. As it supposed to be accurate and reliable thus provides me with an ideal source of annual accounts of the company. I have used only the audited annual accounts for the last three years of the company though unaudited quarterly review until July was available, to make certain that only reliable and accurate source of information is used in my research and analysis project. These audited annual accounts provides me all the information for the last three years which is essential in computing key financial ratios and also to make a comparison with rivals and industry averages of the company. Annual accounts of the rivals for the last three years are also used to make comparison with the Shell.  § Financial Analysts Report: They are professional people and their views are independent and their analysis helped the shareholders making economic decisions, which in turns affects the very existence of the company.  § Kaplans Tutorial Text: Kaplans tutorial text for Bsc (Hons) in Applied Accounting also helped me a lot for gathering information and also about the different requirements of the reports. It also helped in focusing a particular section of the report and also helped in overall design of the project so that nothing is missing in the project.  § News Papers: Getting in touch with the business section of leading newspapers like The Times, The Independent, Daily Express and The Telegraph was very useful as it provided me guidance on the economy overall and as well the movement in the share prices of different companies. b. Methods Used To Collect Information To collect information various methods are used like,  § Internet: Internet offers a speedy and impersonal way of getting to know the basics of the services that a company provides. (BPP 2005 Paper 3.4) I visited www.shell.com to access the financial reports of the company and press releases. I also visited www.bp.com to get information about the rival company of Shell for the purpose of comparison. Also I visited www.ft.com which really helped me a lot for the up to date information about the Shell and BP. I have also visited www.wikipedia.org to get information which helped me a lot to understand the oil and gas industry. In addition I visited the www.bbc.co.uk to get the latest news and important interviews.  § Use of the E-mail: For communication with Shell people I use to e-mail them during my research whenever I want to get some important information. They responded quickly to answer my query.  § Library Research: Libraries proved quite helpful so some libraries in London, Kaplan Financial College library and City Business Library in Moorgate London for general reading of the newspapers, journals, different books, magazines to get important information about Shell and BP. I spend most of my time in city business library, where I was able to get specific information through different CD ROMS which included different databases search designed specifically for getting information about different companies. Some of the CD ROMs are:  § Financial Analysis Made Easy: This database provided the detailed key financial data in the form of profit and loss accounts and the balance sheet. Also it helped me to get important ratios of the Shell and BP and their comparison with the preceding years in the form of graphs.  § Marketing and Business Information Centre (Data Monitor): This database provided vital information regarding the company, industry and market news for the research and analysis. This database contains records of hundreds of companies in UK and worldwide. When I looked at the Shell data, it really helped me by providing the overview and the detailed information. Then same thing was true for its rival BP. c. Limitations in the Information Gathering A number of difficulties I have faced sometime in getting the required information. For instance, I was expecting to get more information from the newspaper, but actually it was not. The newspaper only provides information about a particular date and some events but in depth information cannot be obtained and also articles are found in different newspaper i.e. nothing is new than others. Similarly when I went to City library, I was not aware of using FAME database, so when I tried to get information from database it took me too long. Moreover it only provides me the financial data in the form of graphs. Another problem which I have faced is the information overload on the internet. Whenever I tried to search something on the net it gives me too many results which some time confused me which information I should use and which is not. d. Accounting Technique Used and Limitations In this report to analyze the financial performance of Shell comparing to BP ratio analysis has been used. Ratios are important tool in analyzing the financial performance of the company. Ratios are used because shareholders and potential investors are primarily concerned with receiving an adequate return on their investment. An earnings per share is a key ratio that is to be used to determine the returns on shareholders fund. Suppliers and lenders are concerned with the security of their debt or loan. So they are mainly focused on the gearing level the company is having and also the interest cover. More over management is concerned with the trend and level of profits, so ratios are the main measure of the success. Furthermore, managements bonuses are linked to the profits of the company. I have calculated the key ratios in an appendix from 2006-2008 for Shell and BP and they did analyze the results. Ratios were used as a tool to assist analysis and to focus attention systematically on important areas. Ratios summarize information in an understandable form and also helped me to identify trends and relationships. There are also limitations of financial statements and ratio analysis as they are based on the past and ratios are not predictive if they are based on historical information. Ratios ignores any future action which is or to be taken by management. Another limitation faced by ratio analysis is the fact that the ratios results may be distorted if there are differences in the accounting policies. (Kaplan Financial Study Text Paper F7) In all, Ratios have limitations but are still regarded as the best tool for analyzing the financial performance of the business and so I also used it. III. ANALYSIS In this section of the report I will explain and analyze the financial performance of Shell and will compare its results with BP.I will also explain Shells financial position in the current year. a. Company History: The Royal Dutch Shell Group was created in February 1907 when the Royal Dutch Petroleum Company and the Shell Transport and Trading Company Ltd of theUnited Kingdommerged their operations. This move was largely driven by the need to compete globally with the predominant American oil company (www.wikipedia.org) b. Financial Analysis: Here is the analysis of the financial data of Shell (Revenue, GP and NP) over the last three years.  § The revenues in 2008 were ($458.4 billion) 28.8% higher than in 2007, when they were ($355.8 billion) 11.6% higher than in 2006. (Appendix)  § The oil and gas prices was One of the main reasons of increase in revenues in 2008  § Brent crude oil prices average $97.14 per barrel in 2008 compared with $72.45 in 2007, while West Texas Intermediate average $99.72 per barrel compared with $72.16 a year earlier. Oil prices saw great fluctuation in 2008. (Annual Report Shell 2008)  § A 6% increase in Gross Profit of Shell in year 2008 and 2007 as compared to gross profit in year. (Appendix)  § Its shows an increase in production costs in line with increase in revenues on high margin products.  § Earnings ($26.5 billion) were lower by 17% in 2008 compared to 2007, when they were ($31.9 billion) 21% higher than in 2006 ($26.3 billion). (Appendix) The decrease in 2008, compared with 2007, reflected the effect of declining oil prices on inventory in the second half of the year, lower production volumes, lower realised refining margins and higher operating costs. These more than offset the positive impact on earnings from higher realised oil and gas prices as well as higher LNG and GTL product prices. (Annual Report Shell 2008) Second quarter 2009 reported earnings were $3,822 million compared to earnings of $11,556 million in the same quarter a year ago. (2nd quarter results 2009, www.shell.com )  § Earnings By Business Segments : All figures in this table are in $million The table shows that earnings in 2008 were higher by 47% in Exploration Production, Gas Power and Oil Sands segments as compare to 2007. On other hand earnings were lower by 100% in 2008 as compare to 2007 in Oil Products, Chemicals and Corporate segments. This 100% reduction in last three segments causes overall reduction of earning in 2008. In the Second quarter Exploration Production segment earnings were $1,334 million compared to $5,881 million a year ago. Earnings compared to the second quarter 2008 reflected the impact of significantly lower oil and gas prices on revenues, lower oil and gas production volumes, higher exploration expenses and non-cash pension charges, which were partly offset by lower royalty and tax expenses. (2nd quarter results 2009, www.shell.com ) Comparison of Shell with BP  § Revenue Growth: Shell and BP revenue over the last three years is shown in the graph: Growth in Revenue in $ Million Shell and BP revenue showed a consistent growth over a period of 3 years. In 2008 Shell revenue 26.9% higher than BP. Which shows that Shell growing consistently as Shell revenue were higher 25.2% 19.9% from BP in 2007 2006 respectively. (Appendix) a. Profitability Ratios The profitability of a company is important and a key measure of its success. The figures shown in the profit and loss account mean very little themselves. However, by expressing them as a percentage of sales they become much more useful. The figures can then be compared with previous years or with other similar companies. (Student Accountant ACCA Magazine, Christopher, 1999.) Gross Profit Margin: Gross profit margin shows earning on sales of a company. In the 2nd quarter of 2009 the gross profit margin has fallen 62% compared to last years 2nd quarter results. An indication of high profit margin is that the company earned well on sales by keeping overhead cost in control. Gross profit margin of 2008 is lower than previous years. Net Profit: Shell net profit margin dropped by 3.2% to 5.8% in 2008 from 9% in 2007. And margin in 2006 was 8.3%.BP net profit margin dropped by 1.5% to 5.9% in 2008 from 7.4% in 2007. The 2006 margin was 8.4%. (Appendix) Growth in Net Profit Shell and BP (%) The profit margin is mainly used as an internal comparison tool. As there are different levels of expenditure involved it is therefore sometimes difficult to accurately compare the net profit ratio for different entities. As compared to BP Shells net profit margin dropped by a higher percentage in 2008.On the other hand if we see the year 2007 the Shell profits are higher than the BP. Return on Average Capital Employed: ROACE reflects the ability of the company to utilize the resources i.e. capital in generating revenue. Capital employed consists of total equity, currant debt and non-current debts. The published segment level contains the computation and calculation of the tax rate and the minority interest components. The strong income generation is the only reason for change in ROACE from18% to 24% between 2006 and 2008. There is a significant decrease in the capital employed from 24% to 18% in 2008 as compare to 2007. A significant decrease in income attributable to shareholders is partly offset by an increase in capital employed, resulted in a decrease in ROACE of 6.0% in 2008(18%) compared to 2007 (24%). The 2006 figure was 23%. (Appendix and Annual Report Shell 2008) ROACE is defined as the sum of the current and previous three quarters income adjusted for interest expense, after tax, divided by the average capital employed for the period. In the 2nd quarter or 2009 the ROAC stands at 8.3% way below the 25.8% in the 2nd quarter of 2008. (2nd quarter results 2009, www.shell.com ) On the other hand BP utilization of its capital resources was showing a sorry picture. BP ROCE has moved in a range of 16% to 19% between 2006 and 2008. BPs ROCE was 19% in 2006, and then reduced to 16% in 2007, followed by an increase of 1% to stand at 17%. This was due to lower income attributable to shareholders in 3 years time. This increase in 2008 was due to some increase in income attributable to shareholders. (Appendix) ROCE Shell and BP (%) The drop in oil price in the second half of 2008 had a significant impact on earnings. The strengthening of the dollar against other main currencies reduced the impact of Shells investment plans on capital employed. b. Efficiency Ratios Debtor Days Shells receivable days has fallen from 76 days in 2007 to 65 days in 2008. The figure for 2006 was 68 days. This was due to the effective and better controlled credit policy. (Appendix) BP on the other hand, showed increase in its collection to 30 days in 2008 from 49 days in 2007. The 2006 figure stands at 53 days. All this reflected an aggressive and comprehensive credit control policy and ability to collect from customers. (Appendix) Creditors Days The payment to creditors from Shell showed improvement in payment to creditors in 2008 if we compare the figures to last three years. As creditors days reduced to 78 days in 2008 from 93 days in 2007, while the figure in 2006 was 87. This improvement shows that company has liquidity to pay off its debts and also helped in making stronger relationship with creditors, which could be Suppliers, lenders. (Appendix) BPs creditors days showed reduction over a period of 3 years i.e. from 82 days in 2006 to 78 days in 2007 and more improved to 46 days in 2008 which showed a good sign for the company. (Appendix) c. Liquidity Ratios Current Ratio As short-term creditors prefer a high current ratio since it reduces their risk. The current ratio measures the adequacy of current assets to meet the companys short-term liabilities as they fall due. Traditionally, a current ratio of 2:1 or higher was regarded as appropriate for most businesses to maintain creditworthiness. However, more recently a figure of 1.5:1 is regarded as a norm. (Kaplan Financial, Paper F7 Study Text) Current ratio for Shell in 2008 was 1.1 and remained Constant between 2006 and 2007 to stand at 1.2. This shows better position for Shell and its ability to pay short term liabilities as they fall due. (Appendix) BP current ratio was also healthy between 2006 and 2007, but in 2008 the ratio was below 1 which may be not a good sign for short term creditors. But it was ok as for as it remains near to 1. (Appendix) One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation value. SO the quick ratio is an alternative measure of liquidity that does not include inventory in the current assets. (Paper3.6, BPP Professional Education, June 2007) Quick Ratio The quick ratio also known as the acid test ratio eliminates inventory from the currant assets. It provides the acid test of whether the company has sufficient liquid resources (receivables and cash) to settle its short term liabilities. Normal level for quick ratio ranges from 1:1 to 0.7:1. (Kaplan Financial, Paper F7 Study Text) For Shell, liquidity ratio remained unchanged within the industry standards between 2006 and 2008 to stand at 0.9. This shows the companys ability to pay short liabilities from most liquid resources i.e. receivables and cash not inventory. (Appendix) BPs quick ratio showed a sorry picture and remains unchanged on 0.7 between 2006 and 2008, as it was standing at the danger level of 0.7 meaning that BP is not having enough liquid resources to pay off the liabilities due. (Appendix) d. Risk Ratios Gearing: Gearing is the relationship between the companys fixed return capital and its equity capital. Gearing ratio indicates the degree of risk attached to the company and the sensitivity of earnings and dividends to change in profitability and activity level. High geared businesses uses large proportion of fixed return capital, so there are greater chances of insolvency and ultimately return to shareholders grow proportionately more if profits are growing. While low geared businesses provide scope to increase borrowings when potential profitable projects are available and can usually grow more easily. (Kaplan Financial, Paper F7 Study Text) Gearing levels in (%) (2006-2008) Shell maintained smooth profits and more suitable assets for security in order to make use of gearing successfully. Shells gearing level increased in 2008 due to more debts taken as compared to 2006 and 2007. Gearing was 23% in 2008 compared to 17% in 2007. The gearing ratio was 15% in 2006. The increase was due to rise in the total debt. On the other hand, BP gearing level was also high standing between 36% to 28% with 36% in 2008 compare to 28% in 2006, while 2007 figure was 33%, which is higher than Shell. High level of gearing means high risk to business, but this is compensated by a significant increase in profits and the returns to the shareholders. So Shell can borrow more easily in future. Interest Cover Companys interest cover indicates the ability to pay interest out of profits generated. Low interest cover indicates to the shareholders that their dividends are at risk (because most profits are use to pay interest payments) and the company may have difficulty financing its debts if its profits fall. (Kaplan Financial, Paper F7 Study text) Shells interest cover has decreased to 42 times in 2008 compared to 45 times in 2007. The interest covers for 2006 was 38 times. This shows Shells ability to finance its debts and the ability to pay interest out of the profits for sure. As investors are interested in the risk level the company is in, it is a healthy sign. Interest Cover in Times (2006-2008) For BP, there is an increase of interest cover to 30 times as compare to 29 times in 2007 but in 2007 there is a huge reduction in interest cover to 29 times from 49 times in 2006 which clearly indicates the inability of BP to finance its debt and to pay interest out of profits generated. That makes BP riskier than Shell for investment purposes. e. Investors Ratios Earnings per Share (EPS): Earnings per Share for Shell decreased in 2008 from $5 in 2007 to $4.27 in 2008. This was due to decline in profits followed by the repurchase of the shares, which causes a net decrease of 105 million in the number of ordinary shares outstanding as a result of share buybacks. As widespread the use of the EPS as a yardstick for investment decisions. Share price of company might fall if it looks as if EPS is going to be low. EPS increased to $5 in 2007 compared to $3.97 in 2006, this was due to decrease in the number of ordinary shares in 2007 as company repurchased its 112 million shares of common stock for cancellation at a gross cost of $4.4billion.this purchase reduced the number of shares outstanding to 1.7% in 2007 and by 7.3% in total since the commencement of share repurchases following the unification into Royal Dutch Shell and successful completion of Royal Dutch Minority tender (August 2005). (Annual Report Shell 2008) In the first six months of 2009 the EPS for Shell is $1.19 compared to the six month figure of $3.34 of the same period of 2009 (2nd quarter results 2009, www.shell.com ) Earnings Per Share in $ (2006-2008) BPs Basic Earnings per Share increased in 2008 to $1.13 from $1.09 in 2007. This was due to the appreciation in the profits followed by the repurchase of shares, which causes a net decrease of 373 million in the number o shares. Basic EPS decline by 0.01 to stands at $1.09 in 2007 compared to $1.10 in 2006. This was due to the declining of profits of BP. (BP Annual Report 2008) Diluted Earnings per Share(DEPS) : Diluted Earnings Per Share attempts to alert the shareholders to the potential impact on the Earnings per Share due to change in equity share capital in future owing to circumstances which exist now-known as dilution. The most common type of dilution is an option or warrant which gives the holder right to buy shares at time in future at predetermined price. (Kaplan Financial, Paper F7 Study Text) Diluted Earnings Per Share in $ (2006-2008) Shells DEPS reduced due to the reduction in the profits and number of shares to $4.26 in 2008 compared to $4.99 in 2007, while it was $3.95 in 2006. BPs DEPS increased to $1.12 in 2008 from $1.08 in 2007. The figure was $1.09 in 2006. The main reason for this was increase in profits despite shares in numbers was reduced. (Appendix) f. Cash Flow Statement: Shells cash flow from operating activities has increased by 27% reaching a record level of $43.9 billion in 2008 compared with $34.5 billion in 2007 and $31.7 billion in 2006. This improvement in cash flow from operations was a result of reduces working capital in 2008 compared to 2007. The increase in the operating activity in 2007 mainly because of increase in income as well as a reduction in taxation paid in 2007 compared to 2006. In 2009, Shells cash flow from operating activities reduced in the first two quarters to stands at $8478 million compared to $21,030 million in the same period of 2008. (2nd quarter results 2009, www.shell.com ) BPs cash flow from operation declined to $24.7 billion in 2007 compared to $28.2 billion in 2006, but the cash from operating activity increased in 2008. This is menially because of increase in income. (BP Annual Report 2008) Higher capital expenditure in 2008 compared to 2007 made Shell to use its Cash flow in investing activities i.e. $28.9 billion in 2008 compare to $14.6 Billion in 2007. In 2009, Shell continued to invest more with cash flow from investing activities stands at $(13,829) million in six months from $(12,275) million in 2007. (2nd quarter results, www.shell.com) But there was less cash paid out in investing activity in 2007(-14.6 billion) as compare to 2006(-20.9 billion) and the main reason was that the proceeds from sale of asset was higher and les capital expenditure in 2007 as compare to 2006. (Shell Annual Report 2008) BP was also having strong investment with $(22.8) billion in 2008 from $(14.8) billion in 2007. The figure for 2006 was $(9.5) billion. (BP Annual Report 2008) In 2008, as Shell took more debts which results in Shells cash flow from/used in financing activities reduced to $(9.4) billion in 2008 from $(19.4) billion in 2007.As Shell acquired Canada minority interest in 2007 resulting Cash flow from financing activity increased in 2007 from (13.7) billion in 2006. There was a small increase of BPs Net cash flow from/ used in financing activities from (9.0) billion in 2007 to (10.5) billion in 2008 menially because of more dividends paid and less repurchase of shares in 2008. Net cash from financing activities was reduced to $(9.0) billion in 2007 from $(19.0) billion in 2006. (BP Annual Report 2008) Cash and Cash Equivalent of Shell and BP in Billions Cash and Cash equivalent of Shell reached 15.2 billion at the end of 2008, up by 57% as compare to 2007 figure of 9.6 billion. Which is good sign for Shell as there cash and cash equivalent was higher as well in 2007 as compare to 2006 figure of 9.0 billion. BPs cash and cash equivalent also increased to $8.2 billion in 2008 from $3.5 billion in 2007 and also up from 2006 level of $2.5 billion. (Shell and BP Annual Report 2008) This shows that Shell has a sound position and has no problem what so ever in cash flow compared to its rivals. c. Non-Financial Analysis In this section of the report I will be analyzing the corporate social responsibility and the SWOT analysis. Corporate Social Responsibility (CSR) We recognise that our continuing business success depends on helping to meet the worlds growing energy needs in environmentally and socially responsible ways. To manage todays business risks and deliver our strategy, it is critical that we maintain the trust of a wide range of stakeholders. (Shell Annual Report 2008) Environmental Social performance Greenhouse Gas Emissions In 2008 despite growing business, Shell operated facilities emitted 75 million tons of GHGs, (measured on a CO2 equivalent basis), about 7 million lower than the previous year, and nearly 30% below 1990 levels. (Shell Annual Report 2008) Flaring Since 2001, Exploration Production has reduced its natural gas flaring by more than 70%. In 2008, total flaring in Exploration Production dropped again mostly due to reduces flaring in Malaysia and Gabon, as investment and operational improvement programs showed result. In 2008 flaring levels in Nigeria were same as in 2007. Spills Shell has reduced the amount of oil and oil products spilled from operations for reasons, Shell can control, like corrosion or operational failures. Spills from sabotage or extreme weather, like hurricanes, which are harder to prevent, have fluctuated with events. In 2008 the number and amount spilled for operational reasons dropped

President Bill Clinton Was Responsible For 9/11 :: essays research papers

  Ã‚  Ã‚  Ã‚  Ã‚  The Clinton administration was at fault for the 9/11 attacks. During the course of his presidency, Bill Clinton had more than a single chance to catch those responsible for the 9/11 tragedy. During his term of 8 years, Clinton had seen a fair share of terrorist attacks, all of which were quickly forgotten. Clinton not only sparked the attack on the World Trade Center, but he may very well have sparked hatred towards the United States by many of the Middle Eastern countries.   Ã‚  Ã‚  Ã‚  Ã‚  In 1993, the World Trade Center was attacked from the basement floor by a bomb in a truck. â€Å"Six people were killed, while one thousand were injured.† (A Synopsis: Clinton Set The Stage for 911) Bill Clinton, to involved with interns to investigate, did not do anything about the attack. Clinton did decide to investigate the event, only it was two years after it had happened. Now in 1995, investigators found that Usama Bin Laden had been in charge of the 1993 attack. Once the news was released about this information, the country of Sudan came to the United States telling us that they could get us Usama Bin Laden if we wanted to press charges against him. Bill Clinton was reported as saying â€Å"Usama Bin Laden is not a threat to the United States.† He was reported saying this in the year 1995, after he found out that Bin Laden was responsible for the acts. However, Clinton did take action in 1998, in which he bombed a Sudanese aspirin factory, wh ich he claimed held chemical weapons, on the eve of the Monica Lewinsky trial. This killed hundreds of innocent workers in the factory. â€Å"If any one act inspired hatred towards America, that was it.† (A Synopsis: Clinton Set the Stage for 911) With each terrorist attack, Clinton went before the American people on more than one occasion saying â€Å"those responsible would be hunted down and punished†Ã¢â‚¬  (Sept. 11: Bill Clinton‘s Ultimate Legacy) However, which each terrorist attack, Clinton backed down, showing negligence towards himself and his administration. Another example of Clinton’s lack of knowledge in foreign affairs can be seen in Iraq. After the Bush administration defeated Hussein in 1991, he ordered that UN officials be stationed in Iraq to make sure that Hussein would be incapable of creating weapons of mass destruction. Under the Clinton administration, the UN officials were told to leave immediately, leaving Hussein to create weapons at his leisure.

Ethnicity and Latin America Essay example -- History Latin America Ess

Ethnicity and Latin America Latin America and the American colonies were â€Å"tamed† based on completely different ideologies. From a Latin American perspective, the most important of the European explorers were of course, the Spanish and the Portuguese. These explorers arrived in Christopher Columbus’ â€Å"new world† with the express goal of bringing glory and prestige to their homeland. In stark contrast, settlers came to the colonies seeking freedom from the religious persecution in Europe. The different approaches used in each area affected how well and to what extent the African, indigenous, and European cultures combined and shaped the characteristics of the regions today. When the Europeans arrived in America in the 15th century, they encountered the American Indians for the first time. Though only some Native Americans made deliberate contact with the settlers in attempts to work peacefully, the entire population felt the new presence. In addition to the violence shown to the â€Å"savages†Ã¢â‚¬â€often in order to take their lands—diseases for which they had no immunity were introduced, therefore resulting in devastating losses of life. As attempts at civilizing the â€Å"redskins† began, some of the Natives accepted the absorption into the new society while many rejected the change and strove to maintain their culture. Years later began the long-standing and undeniably cruel establishment of slave labor in America. Whether they arrived free only to later be captured by slave catchers, or they entered by way of the West Indies as captured African â€Å"black gold†, black slaves endured over a century of oppression and di scrimination. Halfway between the end of the American Civil War and the growth of the civil rights movement, the beginn... ...Spanish and Portuguese in Latin America were far more accepting of other Europeans than of other races. To this day there remain disparities in ethnic distributions; Argentina’s population has an overwhelming 85% of European descent with very few people of mixed race, while neighboring Chile consists of 93% mestizos. The different ways in which Latin America and the United States experienced their colonization impact their societies today. Though the backgrounds of each place are different, the results were similar; the Europeans came, saw, conquered, and abused the indigenous and Africans, who built up the foundations of modern society. Despite the passage of time and wide knowledge of the horrors of our past, inequalities and prejudices against blacks and natives that began centuries ago exist even today. 1 http://www.ecrweb.org/f/March_Mission_BellW.pdf

Psychosocial Impact of Television on Children Essay

Television was once considered a luxury item, however, today is just a commodity. Even low income households have one television set, not only for entertainment but to keep in touch with the happenings around the world. Television, like any other technological advancement, bought with it negatives and positives to the society. It was once only used as a medium of news and light entertainment, mostly by the elders of a household. Now though it has expanded its purpose and is now commonly used for various purposes by all age groups. As mentioned in earlier conclusions, television itself is not a harmful device; previous studies have shown that its own effects are neither positive nor negative. However, it is the programmes that are aired that effect the society; especially on the physical and psychological well-being of the younger generations. Research papers, different forms of studies and articles have found the effects of television both, harmful and useful, on the development of a child. Even the primary research done through qualitative method of interviewing proved that television has no connection between the style and attention of parents. Instead the parents remained intact with the activities of their children regardless of their television watching habits. This discussion highlights various positives and negatives of television usage by the children. Krosnick, Anand and Hartl (2003) have identified three psychosocial â€Å"predictors† of viewing television. The first one they say is the â€Å"need satisfaction,† which occurs due to lack in the ability to socially interacting with peers, over intelligence, and to avoid parental punishment. â€Å"Parental influence† was nominated as the second one where absence of parental guidance and rules lead to increase in watching television. The last one was â€Å"resource availability† where it was found that it has no link with the overall income of the household. Gupta, Saini, Acharya and Miglani (1994) have identified almost all positives and negatives within two paragraphs of their research paper. They define the most positive effects of television watching as an aid to the development of â€Å"cognitive† ability, a source of â€Å"information†, â€Å"knowledge† and â€Å"skill† development. They mention that it also generates the desire of â€Å"learning† and ‘imparts general awareness. † It can also have a positive effect on the â€Å"attitudes and behavior† of the child while advancing â€Å"conceptual and concrete thinking. † They then highlight the negatives as the excuse to let go of â€Å"reading, playing, exercising, and studying†; thus giving rise to a â€Å"passive† behavior. When children continue watching television their â€Å"social interaction† may decline and their eating habits can also be harmed. A pre-TV introduction (age 3-4) and post-TV introduction (age 7-8) study was conducted by Gunter, Charlton, Coles and Panting (2000). Their study results show that the effects (positives and negatives) are usually according to the gender of the child. A more â€Å"antisocial behavior† was witnessed in the boys after the introduction of the TV; whereas the girls’ social behavior was unaffected. Both of the genders however did not display any â€Å"inter-gender difference. † The researchers saw that â€Å"cartoon viewing† was highly linked to â€Å"pre-TV antisocial behavior† and â€Å"post-TV neuroticism levels. † This did not change even when the viewing of â€Å"violent acts† was â€Å"controlled†; thus proving that the presence of any â€Å"nonviolent ingredient† had an effect on the â€Å"unruly children. † Watching cartoons was also related to decrease in the level of anxiety among children. The minds, values, thinking styles, and even social behavior are continuously developing at early age. Due to this it can be greatly affected by the elements present in the life of the child. They are â€Å"vulnerable† to the information â€Å"conveyed through television†, and it may cause a long-term effect. As their views and perceptions are not developed yet they cannot distinguish between the reality and the made-up stuff (Team headed by Baron, 2001). The paper also mentions that almost â€Å"two-third† of the programmes that are aired contain violent acts of some sort, out of which most â€Å"shows† are for children. It would have been a learning experience if the bad guys are punished severely, but at times they are set free without punishment and â€Å"violence† is shown as part of a â€Å"glamorized† world. According to APA (2004) by viewing violent behavior repeatedly children can become immune towards the â€Å"pain and suffering of others,† at the same time they can also become â€Å"fearful of the world around them. † This proves that it is not necessary that the depiction of the violent acts can cause harm in more than one ways. Children can also become stressed, depressed, or pessimistic due to the negativity being imposed. They might start judging people and world as a bad place which has nothing to offer but pain and misery to the innocent people. Hussain (2007) says that the â€Å"exposure to violence† and the glory of bad guy makes children start to portray aggressive and violent behavior assuming that it is socially accepted and â€Å"normal. † Viewing of television has also been known to cause â€Å"Attention Deficit Hyperactive Disorder (ADHD),† which is described as â€Å"inattentiveness, lack of impulse control, and hyperactivity. † ADHD has been known to cause problems in learning and educational field. Television watching can also have a negative impact on the health of a child (Team headed by Baron, 2001). It can lead to a belief that looking like actors and models is beauty; thus taking away the innocence of a child. This has really negative effects on females who start developing â€Å"body concept and self-image† and start â€Å"dieting† at a very early age. Another social disadvantage is the division that this body image will cause amongst the children. At a very early age they will start distinguishing their peers as fat, skinny, chubby, beautiful and ugly and this trait will strengthen as they grow older. Another problem related to health and social issues is that of sexuality as mentioned by CPS (2003). Children hear the word sex on television for the first time rather than from their health care provider or parents. It has taken the role of the sex educator. Movies, shows, and even kids cartoon characters are shown as involved in sexual acts. Children are led to believe that it is â€Å"normal and risk-free,† and â€Å"everybody does it. † This has lead to increasing number of sexually active individuals than ever. Strasburger (1995) has selected the sexuality related data in a table which shows the influence of television on the sexual acts at early age.