Fundamental Analysis of a Firm: The Case of BHP Billiton Limited

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Fundamental Analysis of a Firm Executive Summary 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 or tax-exempt companies, small and large institutions, domestic and foreign companies, individual and pension fund. The leadership acts on behalf of the investors and make decisions so as to maximize the shareholder’s wealth. It is common for conflicts of interests arising between the two parties. BHP applies both debt and equity financing to raise funds for company growing business. Debt helps lower whole financing cost, but has to repay the loan and interest. Equity financing doesn't need to be repaid, but can confront relinquish business control or any ownership. BHP risk profiles are water supply, mining, energy, transport, also health risk of all employees. The stock price will continue rising above $38 in the future. BHP future projects will be the same as Petroleum Business. BHP focuses sustainability on governance, people, environment and sociery. BHP Billiton has a progressive dividend policy. BHP can continue to have higher EPS ratio. Introduction The firm I choose is BHP Billiton ... ... middle of paper ... ...2014/140218_BHPBillitonInterimResultsFY14Presentation.pdf Morningstar, 2014, BHP Billiton Ltd ADR, http://investors.morningstar.com/ownership/shareholders-overview.html?t=BHP®ion=usa&culture=en-US&ownerCountry=USA Morningstar, 2014, BHP Billiton Ltd ADR, major shareholders, http://investors.morningstar.com/ownership/shareholders-major.html?t=BHP®ion=usa&culture=en-US&ownerCountry=USA Kokemuller, 2014 The Advantages and Disadvantages of Debt and Equity Financing, Demand Media, http://smallbusiness.chron.com/advantages-disadvantages-debt-equity-financing-55504.html Newman, 2014, 3 reasons to buy BHP Billiton Limited, Fool, http://www.fool.com.au/2014/02/24/3-reasons-to-buy-bhp-billiton-limited/ Way, 2014, The Advantages of Using Debt as Capital Structure, Demand Media, http://smallbusiness.chron.com/advantages-using-debt-capital-structure-22011.html

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