Fundamental Analysis of a Firm: The Case of BHP Billiton Limited
1. Introduction 3
2.1 Firm Analysis 3
2.2 Financing 4
2.3 Risk and Performance 8
2.4 Investments 8
2.5 Sustainability and long term viability 10
2.6 Valuation 11
3. Conclusion and Recommendations 13
References 14 Executive summary
BHP Billiton Limited (BHP) is the world’s leading diversified resources companies that major commodity businesses contain minerals probe, manufacture (primarily iron ore, coal, copper, etc), and considerable interests in gas and oil. It was officially listed on ASX on 13 August, 1885(ASX, 2014). BHP investors and shareholders probably include taxable …show more content…
1. Firm Analysis
1.1 Average Investors BHP cooperates with numerous stakeholders, from which I believe that BHP investors and shareholders probably include taxable or tax-exempt companies, small and large institutions, domestic and foreign companies, individual and pension fund.
1.2 Management and Ownership relations
BHP Billiton Limited headquarters are situated in Melbourne and BHP Billiton Plc is sited in London. Both businesses have equal Boards of Directors and are run by a sole management group (BHP, 2014). The leadership acts on behalf of the investors and make decisions so as to maximize the shareholder’s wealth. The role of the Board of Directors is liable for business survival; work with integrity, place safety first. Therefore, it is common for conflicts of interests arising between the two parties. For instance, agency costs happen when BHP pursues developing the business and increase the remunerations, which may not increase the share value and lower the market value of the entire firm.
2.1 Financing strategies