Rio Tinto Case Study
Rio Tinto is a leading international mining company famous for its iron ore. According to the Chief executive Tom Albanese, despite continuing global economic uncertainty and volatility, Rio Tinto will still generate strong margins despite falling prices, reflecting the low cost nature of their businesses and their first - rate operational performance. (Rio Tinto Media 2012, pp2) .This article will be divided into three parts. Firstly, the main data of financial statement will be illustrated via a table and this writing will analyse the data to see the financial state of the Group. Secondly, this paper will discuss the attached article and other information. Finally, the decision whether investing Rio Tinto in the mining industry will be determined.
Data of Financial statement | | 2011US$m | 2010Restated US$m | Change(2010-2011) | Net profit before tax | 13,214 | 20,491 | -35.51% | Net profit after tax | 6,765 | 15,098 | -55.19% | Total comprehensive income | 4,365 | 16,492 | -73.35% | Sales | 60,537 | 55,171 | 9.73% | Total assets | 119,545 | 112,773 | 6.00% | current assets | 21,898 | 21,459 | 2.05% | Total liabilities | 60,337 | 48,261 | 25.02% | current liabilities | 14,966 | 12,876 | 16.23% | Cash flow from operating activities | 27,388 | 23,530 | 16.40% |
(Rio Tinto Ltd 2011)
The net profit margin in 2011 was 21.83%, while the net profit margin in 2010 was 37.14%.The data in 2010 was higher than the data in 2011, creating a comparatively higher profit for each dollar of sales. Rio Tinto had earned a return of 11.05 cents profit before tax in 2011 and a return of 18.17 cents profit before tax in 2010. At the same time, the total comprehensive income decreased 73.35% from 2010 to 2011.According to these three aspects, Rio Tinto operated better in the financial situation in 2010 than that in 2011. On the other hand, people can calculate the asset turnover in 2011 was 50.64% and the asset turnover in 2010 was 48.92%. People can
Data of Financial statement | | 2011US$m | 2010Restated US$m | Change(2010-2011) | Net profit before tax | 13,214 | 20,491 | -35.51% | Net profit after tax | 6,765 | 15,098 | -55.19% | Total comprehensive income | 4,365 | 16,492 | -73.35% | Sales | 60,537 | 55,171 | 9.73% | Total assets | 119,545 | 112,773 | 6.00% | current assets | 21,898 | 21,459 | 2.05% | Total liabilities | 60,337 | 48,261 | 25.02% | current liabilities | 14,966 | 12,876 | 16.23% | Cash flow from operating activities | 27,388 | 23,530 | 16.40% |
(Rio Tinto Ltd 2011)
The net profit margin in 2011 was 21.83%, while the net profit margin in 2010 was 37.14%.The data in 2010 was higher than the data in 2011, creating a comparatively higher profit for each dollar of sales. Rio Tinto had earned a return of 11.05 cents profit before tax in 2011 and a return of 18.17 cents profit before tax in 2010. At the same time, the total comprehensive income decreased 73.35% from 2010 to 2011.According to these three aspects, Rio Tinto operated better in the financial situation in 2010 than that in 2011. On the other hand, people can calculate the asset turnover in 2011 was 50.64% and the asset turnover in 2010 was 48.92%. People can