Please this is a resit so please try your best for the student to pass this time thanksPetroleum...

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Please this is a resit so please try your best for the student to pass this time thanksPetroleum Energy, Economics and Finance in Oil and Gas(EDUQUAL/07/02-L7DIP IN OIL & GAS MGMT) Learning Outcomes Assessment Criteria 1. Be able to understand and interpret the financial statements and its benfits and limitations in Petroleum industry 1.1 Use the financial statements of an organisition to calculate and interpret the key performance ratios. Accounting Ratios:- meaning, types, Use, Impact on Business. Fianancial Statements:- Meaning, Importance, Limitations, Effect on Analysis, Examples. Comparative Financial Statements:- Meaning, Objective, Importance, Income Statement, Balance Sheet, Measuring Performance, Case Study. 2. Be able to understand and implement the Analytical Skills in financial decisions specific to Oli and Gas Industry. 2.1 Explain various methods and approaches to costing products, services, functions and activities in an organisation. Costing :- Meaning, Use, methods, Approaches, Diference between them, Costing techniques, Pricing Methods, Case Study. Short Term Decision Making:- Meaning, Process involved, Effect on Business. Traditional Budgeting System:- Meaning Unit Aims : Learners will be able to know the importance of economics and finance in oil and gas sector specific to petroleum energy. Financial Statements:- Types, Interpretation, Numerical Calculation, Impact on organisation, Case Study. 1.2 List and explain the limitations of financial statements and its impact on the analysis. 1.3 Analyse the comparative performance through financial statements. 2.2 Explain the concept of short-term decision making and show the use of marginal cost method. Marginal Costing:- Meaning, Calculation, techniques, Use, Limitations, Numerical Example. 2.3 Discuss the role and limitations of traditional budgeting system and approaches for future changes. PREVIOUS UNIT NEXT UNIT 3/10/2019 Course Status – Welcome to online learning platform http://247campus.co.uk/course-status/ 2/3 Traditional Budgeting System: Meaning, Example, Calculation, Limitation, Budget Reform, Approaches for future change. 3. Be able to understand the importance of accounting entries in oil and gas exploration and production company. 3.1 Explain the concept and role of costing method in activity based management. Activity Based Management:- Meaning, Principles, Use. Cost management:- Meaning, Techniques, Process, Advantages, role in supporting business, Case Study. Strategic Management Accounting:- Meaning, Importance, use, Techniques, Calculation, Effect on Business 4. Be able to identify the key issues in world petroleum market along with its sustainability 4.1 Explain the process of acquiring and use of resources on organisational performance and effectiveness. Resources:- Meaning, Types, Use, Importance, Acquiring Process, Effect on organisational Performance and effectiveness Financial Risks:- Meaning, types, risks, mitagation, Examples. Risk Management:- definition, use, process, types of risks, documentation. Case Study. 5. Be able to understand teh financial terms and concepts in Oil and Gas Industry 5.1 Compare financial and strategic objectives in Oil and Gas Industry specific to generation of opportunities in both approach. Financial and Strategic Objectives:- Meaning, Use, Nature, Management, Case Study. Financing Options and Sources of Finance:- Meaning, Types, Use, Challenges faced, Solutions, Examples. Activity base Costing:- Meaning, Role in Activity Based Managemnet,Uses, Example 3.2 Explain the use of cost management methodology for suppoting business enterprise and its excellence. 3.3 Explain the term strategic management accounting 4.2 Discuss the financial risks and international investment decisions in Oil and Gas Industry and ways to mitigate the risks. International Investment:- Meaning, Advanatages, role of government, legal issues, advantages, limitations, Case Study 4.3 Explain the process of preparing and using the risk management reports 5.2 List the financing options and sources of finance available for the organisation. 5.3 Evaluate the concept and methods used in capital investment and Capital budgeting and show PREVIOUS UNIT NEXT UNIT 3/10/2019 Course Status – Welcome to online learning platform http://247campus.co.uk/course-status/ 3/3 Capital investment- Meaning and Use; Capital Budgeting:- Meaning, Methods, Use, Calculation; Cost Calculation f Capital- meaning, Numerical Example, Use. the cost calculation for a capital investment in an organisation TEXTBOOKS, JOURNALS AND WEBSITES

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Kushal · Accepted Answer

1. Financial Statements
We will analyse financial statements of British Petroleum and try to perform a comparative analysis across the competitors as well. British Petroleum operates in upstream and downstream segments both. In the upstream segment, it majorly involves oil and natural gas exploration, field development and production, as well as midstream transportation, storage and processing. The Downstream segment has global manufacturing and marketing operations.
1.1 As far as the key ratios are concerned, we need to consider the Net profit margin, EBITDA Margin, debt to Equity ratio, and return on equity. For all the calculations, we have used the 2018 financial statements.
Net Profit Margin – This ratio tell how much is the company making after taking all the expenses into account.
Net profit Margin = Net Income / Total Sales = 3.2%
Net Income = $ 9,457 MM
Total Sales = $ 298,756 MM
EBITDA Margin – This ratio does not consider the fixed assets and the capital structure of the company and calculates the profit that firms make before the depreciation, taxes and interest expenses.
EBITDA Margin = EBITDA / Total Sales = 11.4%
EBITDA = $ 34,131 MM
Total Sales = $ 298,756 MM
As compared to the industry, the 
Debt to Equity – This ratio explains us how much leverage the firm has undertaken. This also explains the risk associated with the firm.
Debt to equity = Debt / Equity = 0.66
Debt = $ 65,799 MM
Equity = $ 99,423 MM
Return On Equity – This ratio explains us how much income the firm is earning over the equity amount invested in the firm.
Return on Equity = Net Income / Equity
Net Income = $ 9,262 MM
Equity = $ 98,968 MM
Source- Thomson Reuters
1.2  Limitations of the financial statements and its analysis
There are majorly three types of financial statements – 1. Income statement, 2 Balance Sheet, 3. Cash Flow Statement.
Income statement tells us what was the sales and profit and all the expenses that the firm incurred in the given financial year.
Balance sheet tells us how much assets and liabilities the firm has undertaken.
Cash flow statement is for the purpose of understanding the cash transactions that took place during the given financial year.
Limitations of the financial Statements –
The financial statements can be manipulated and the earnings can be managed. This could lead the shareholders to believe that the firm has been performing exceptionally well for the short term.
Financial statements might not be comparable across companies, due to the different accounting policies undertaken by the firms.
Intangible assets are not recorded, which could be significant in the value of a firm.
1.3 Comparative performance of the financial statements -
As compared to the industry, British petroleum has been underperforming in all the metrics. The industry median net profit margin comes around 6.6%, EBITDA margin comes around 28.2% and debt to equity is far lesser than that of British Petroleum 0.38.
British petroleum has been underperforming in all these metrics as compared to the peers and has been doing so historically due to its strong government backing.
2. Costing Methods-
2.1 Different costing methods for the cost accounting in Oil and Gas industry
Activity Based costing – Here the costs are allocated to the amount of activities needed and the costs incurred for those activities rather than equally dividing the costs across product lines. This is used when we need to understand the profitability of the different lines.
Process Costing – The costs are calculated for the each process separately and where the standardised goods are produced in a continuous flow. Units pass through the same process and overheads are apportioned.
Job Costing – Job costs are not related to the particular periods. Every job in the costing is different and not necessarily the same operations will be carried out to get to the output or the same materials will be utilized. No averaging of the costs take place. This typically has been used in the large firms producing and manufacturing a variety of items involving the different operations and materials.
Batch Costing-
Here each batch is treated as a cost unit and for each batch the costs are accumulated and ascertained over for the each batch. This is majorly used in the readymade garments, pharma industries, toys, tires and tube industries.
2.

Please this is a resit so please try your best for the student to pass this time thanksPetroleum Energy, Economics and Finance in Oil and Gas(EDUQUAL/07/02-L7DIP IN OIL & GAS MGMT) Learning Outcomes...

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