Financial and Operational Performance analysis
Project description
Scenario
You are equity investment analyst in a major investment bank in the city of London. Your are part of the team specializing in Energy sector and more precisely in the Oil and Gas Group. As part of your job at the bank, you regularly carry out financial and operational performance analysis of companies listed on the London and Global Stock Exchanges in order to recommend to potential clients whether they should buy, hold or sell shares in companies with heavy exposure of Oil and Gas.
Required:
Carry out a detailed analysis on two listed PLCs 1) British Petroleum Plc and 2) Shell Plc.. the period of analysis should be 2012-2013.
A) a discussion of the relationship between the firm’s objectives, its budget, budgeting control, including issues of cash flows forecasting and capital investment appraisal. You are expected to examine key factors such as the prices of given energy commodity such as Brent, WTI, Sahari, LNG, Benzine, LPG, Jetfuel, Diesel, Gasoline, etc that contributes to a firm’s survival discussing the firm’s goals, growth strategies , budgeting planning, employee motivation, etc. (1100 words)
B) Risk and Return measurement via CAPM and the financial Stability of the two companies BP and Shell Plc. You are expected to carry out the calculation of the relationship between the risk of the company shares, the market price and the expected return to the investor using of the Capital Asset Pricing model (CAPM) [Rs=Risk free rate +(market risk premium)*beta ] as a financial tool. Your ar expected to assess the business (commodity) and financial risks of the two companies BP Plc and Shell Plc.You should also compare them by measuring the volatility of their returns on the asset and sensitivity to market and Oil and (or) Gas price fluctuations.(650 words)(calculations in excel sheet)
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