Financial Analysis- for Royal Dutch Shell

Royal Dutch Shell, Plc.
(NYSE: RDS.A)

Table of Contents
Executive Summary3
Introduction4
Financial Ratio Analysis5
Liquidity6
Asset Management7
Debt Management8
Profitability10
Market Value12 Cash Flow and Growth Analysis14
Capital Structure Estimation16
Weighted Average Cost of Capital17
Cost of Debt17
Cost of Equity - CAPM18
Cost of Equity - DCF19
Cost of Equity - BYPRP19
WACC20
Project Cash Flow Estimation21
Capital Budgeting Analysis23
Sensitivity Analysis24
Scenario Analysis27
Conclusion28
References29
Appendix30

Executive Summary
This report analyzes Royal Dutch Shell Plc. (RDS.A on NYSE) financial status, history, market space, and growth opportunities. Royal Dutch Shell Plc. (Shell) is one of the world’s largest corporations with annual revenue of $470 billion for fiscal year 2011. When analyzing a company it is vital to ensure all aspects of the firm’s financial standing are stable, this is essential to guarantee its ability to take upon new major projects, such as the one being proposed at this time and evaluated in this report.
This report intends to evaluate the possibility of Shell undertaking a project that requires a total initial investment of $580 million in fixed assets as wells as operation expenses of $38 million, for a total of $618 million is startup costs. This report illustrates Shell’s financial standing through, ratio analysis, cash flow analysis, and detailed capital budgeting analysis to help calculate Shell’s capacity to accept the proposed project. The life of the project will be eight years and expected to have a growth rate of 8.5%. The Net Present Value of the project is approximately $284 million and is expected to pay for itself in approximately 4.74 years according to discounted payback calculations (detailed in report).

Introduction
Royal Dutch Shell plc operates as an oil, gas and energy company that explores for and extracts hydrocarbons worldwide. Royal Dutch Shell

References: Network, Y. -A. (2012). Yahoo! Finance. Retrieved November 28, 2012, from Bond Center: http://finance.yahoo.com/bonds Royal Dutch Shell YCharts Pro Stock Report. (2012). Royal Dutch Shell plc (RDSA). New York: Y Charts. [ 2 ]. [ (YCharts Pro Stock Report, 2012) ] [ 3 ] [ 4 ]. [ (YCharts Pro Stock Report, 2012) ] [ 5 ] [ 6 ]. [ (YCharts Pro Stock Report, 2012) ] [ 7 ] [ 8 ]. [ (Royal Dutch Shell, 2012) ] [ 9 ] [ 10 ]. [ (Royal Dutch Shell, 2012) ] [ 11 ] [ 12 ]. [ (Royal Dutch Shell, 2012) ] [ 13 ] [ 14 ]. [ (Royal Dutch Shell, 2012) ] [ 15 ] [ 16 ]. [ (E*Trade, 2011) ] [ 17 ] [ 18 ]. [ (Network, 2012) ] [ 19 ] [ 20 ]. [ (YCharts Pro Stock Report, 2012) ] [ 21 ] [ 22 ]. [ (Royal Dutch Shell, 2012) ]