Preview

Case Study Phoenix vs Petron

Powerful Essays
Open Document
Open Document
5620 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
Case Study Phoenix vs Petron
TABLE OF CONTENTS

1 INTRODUCTION 1
1.1 Purpose of the Case Study 1
1.2 Framework of Analysis 1
1.3 Background 1
2 PROBLEM DEFINITION 2
3 ANALYSIS 2
3.1 Risks 2
3.2 Product Development Strategy Evaluation 2
3.3 Financial Statement Analysis 3
3.3.1 Profitability 3
3.3.2 Operating Efficiency 4
3.3.3 Liquidity and Solvency 4
3.3.4 Cash Flow Activities 4
4 RECOMMENDATIONS 5
APPENDICES i
REFERENCES xiv

1 INTRODUCTION
1.1 Purpose of the Case Study

The primary objective of this case study is to provide investors with the necessary information to help them determine whether their investment in the two major Philippine oil industries: Phoenix Petroleum Philippines Inc and Petron Corporation is sound. In addition, it also aims to provide a baseline support for potential investors with regard to the feasibility and the risks involved in engaging into this kind of business.
1.2 Framework of Analysis

The case study focuses on three areas of analysis: corporate strategies and direction, risks and financial performance. To carefully examine these areas the following information about Petron and Phoenix were gathered, examined and evaluated: financial statements, Annual report (2011), statistics and business model and strategies documentation. The period under evaluation is year 2011 but supporting data from 2010 and 2009 were obtained for trending analysis.
The techniques used in the analysis include: common-sized financial statements, key financial ratios, trend analysis, structural analysis and industry comparison. The key financial ratios utilize are liquidity and solvency, profitability, leverage, and activity. Statement of cash flow is evaluated and integrated with the ratio analysis results.
1.3 Background

Petron’s principal business involves the refining of crude oil and the marketing and distribution of refined petroleum products. It sells a full range of refined petroleum products including gasoline, LPG, diesel, jet fuel, kerosene, industrial fuel oil,


References: Petron Annual Report 2011 Phoenix Annual Report 2011 Maybank ATR Kim Eng, Phoenix Petroleum Philippines: Aiming for the Big Leagues, June 15, 2012 Retrieved From: http://phoenixphilippines.com/pdf/MATRKE_research_report.pdf) Sunstar, P5-B smuggling case filed vs. Phoenix Petroleum, May 5, 2011. Retrieved from: (http://www.sunstar.com.ph/breaking-news/2011/05/05/p5-b-smuggling-case-filed-vs-phoenix-petroleum-153724). Department of Energy, Oil Supply/Demand Report 1H 2011, Retrieved from: http://www.doe.gov.ph/do/Report1H2011.htm The Manila Times, DOE fetes Phoenix Petroleum Strategy, August 14, 2010. Retrieved from: http://phoenixphilippines.com/2010/11/doe-fetes-phoenix-petroleum-strategy/
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Good Essays

    Capstone Project
    • 1471 Words
    • 6 Pages

    Capstone Project

    Liquidity, profitability, and solvency are the three man subjects used to determine a company’s success. These three subjects will tell how to financially stable business is. Simple financial statements will not show this information because they do not go as in extent, and do not show a trend over time. Looking at a trend over time, a company’s ratio of vertical analysis and horizontal analysis can be determined. A ratio analysis is used form the liquidity, profitability, and solvency through looking into this data. By taking a look at the whole picture, a person can see how the company is really doing over a very long period of time; and be able to make more precise depictions of the company’s future financial situation. This is very useful when looking for somewhere to invest money.…

    • 1471 Words
    • 6 Pages
    Good Essays
    Read More
  • Better Essays

    FIN 370 Week 3 Strategic Inititative Paper Final Draft

    • 1174 Words
    • 4 Pages

    FIN 370 Week 3 Strategic Inititative Paper Final Draft

    ExxonMobil is identified as one of the world’s leading oil and gas businesses. It manages market commodities and means countrywide. ExxonMobil is entail in “marketing, gas, and oil exploration, transportation and production in roughly 200 nations” (ExxonMobil, 2015). This company furnishes assistance and products under label names such as “Mobil, Esso, and Exxon. ExxonMobil is known as one of the biggest oil industrial installation where a substance is refined in the nation” (ExxonMobil, 2015). This essay discusses ExxonMobil’s strategic initiative from the 2013 Summary Annual Report. The following details the company’s initiative, financial planning surrounding that initiative, the effect of cost and revenues on the supply chain, as well as the ethical concerns associated with this idea.…

    • 1174 Words
    • 4 Pages
    Better Essays
    Read More
  • Good Essays

    Xacc 280 Pepsico vs Coca-Cola
    • 746 Words
    • 3 Pages

    Xacc 280 Pepsico vs Coca-Cola

    Three tools of evaluating financial statements that are used most often are Horizontal analysis, Vertical analysis, and Ratio analysis.…

    • 746 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Xacc 280 Final
    • 1225 Words
    • 5 Pages

    Xacc 280 Final

    Liquidity, solvency, and profitability are the three characteristics that will be used to see a company’s success. A simple financial statement will not demonstrate the company’s power because it is a general idea of the company’s position and does not display business developments. The company’s business developments are vital for potential investors because they determine vertical and horizontal analysis. These characteristics are also used to define the ratio analysis. Ratio analysis is dividing two numbers to get a number of percentages that can be used to compare companies in the same industry. Examining the entire company’s financial trends for a set period of time, an investor will see a factual description of the company’s financial condition. This is the financial analysis an investor desires to review prior to spending money.…

    • 1225 Words
    • 5 Pages
    Better Essays
    Read More
  • Satisfactory Essays

    Xacc 280 Week 7 Checkpoint
    • 292 Words
    • 2 Pages

    Xacc 280 Week 7 Checkpoint

    There are three ways to analyze financial statements there is the vertical analysis, which uses the base percentage to express the assets or liabilities and stockholders’ equity. Horizontal analysis or the trend analysis is how someone can evaluate the financial statement over a period. With this method, one can determine an increase or decrease in assets liabilities or stockholders equity. This can be done in percentage or totals Horizontal analysis is used primarily with an intercompany comparison. Ratio analysis is when one uses three comparisons to look at the financial statements it would look at industry average intracompany and intercompany. Ratio expresses the mathematical relationship in a percentage either a rate or a proportions. It depends on if you are a Short-term creditor or a stockholder which method will be most beneficial for the necessary information to make a sound decision. This information can be overwhelming so careful study and practice is important when analyzing finical statements.…

    • 292 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Powerful Essays

    Financial Analysis of Lockheed Martin
    • 3132 Words
    • 13 Pages

    Financial Analysis of Lockheed Martin

    The world of finance in today’s market is one of numerous ups and downs. With the global economy in constant flux, it is more important than every for companies to examine their financial status and compare their position to that of the relative market as well as their fellow competitors. In order to better understand the ways in which today’s managers examine their position on the market and evaluate their current value as a company we will examine the financial data of Lockheed Martin Corporation and perform a detailed financial analysis on the company. In this analysis we will examine financial rations of Lockheed Martin and in turn compare these rations to that of fellow market competitors. Upon completion of our financial analysis we will be able to understand the financial position of Lockheed Martin as well as the position of Lockheed Martin in their respective market, and in turn we will be able to fully comprehend the methods and data used by companies in order to evaluate their company.…

    • 3132 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Good Essays

    Cango Financial
    • 1115 Words
    • 5 Pages

    Cango Financial

    The success of a business depends on its ability to remain profitable over the long term, while being able to pay all its financial obligations and earning above average returns for its shareholders. This is made possible if the business is able to maximize on available opportunities and very efficiently and effectively use the resources it has to create maximum value for all involved stakeholders. One way the performance of a company can be measured on critical areas such as profitability, its ability to stay solvent, the amount of debt exposure and the effectiveness in resource utilization, is performing financial analysis where a set of ratios provides a snapshot of company performance and future prospects. Financial analysis is also a very useful technique that forms a basis for making key decisions about company operations. In addition to internal company members, these ratios are used by potential investors and shareholders to make investment decisions about the company.…

    • 1115 Words
    • 5 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Acc291 Reflection Week 4
    • 460 Words
    • 2 Pages

    Acc291 Reflection Week 4

    Ratio analyses are used by companies to gather information in a company’s financial statement. Ratios and numbers from a company’s current year are compared to previous years and sometimes even the economy to judge the company’s performance. There are several ratios such as profitability ratios, liquidity ratios, activity ratios, leverage ratios and market ratios that can be used to calculate financial information. In vertical analyses, each entry of the assets, liabilities and equities in a balance sheet is represented as a proportion of the total account of the financial statement. In horizontal analysis a company’s ratios are compared in the financial statements over a period of time. Horizontal analysis can be used from revenues to earnings per share.…

    • 460 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Xacc 280 Ratio, Vertical and Horizontal Analyses
    • 534 Words
    • 3 Pages

    Xacc 280 Ratio, Vertical and Horizontal Analyses

    The three tools of financial statements analysis are Horizontal (trend), Vertical (common size), and Ratio. The first financial statement analysis is horizontal which evaluates the performance of the company from one accounting period to the next. Horizontal analyses’ are conducted to assess any relative changes in different items over a specified time period. It also indicates the trends of revenues, expenses, and other line items of financial statements over the course of time. Another type of financial statement analysis is vertical which expresses all the different financial statements as a percentage of a base amount. The vertical analysis represents what percentage of an account is responsible in the financial statements. When applying this method on the balance sheet, all of the three major categories account; assets, liabilities, and equity are compared to the total assets. The third financial statement analysis is ratio which expresses the relationship among selected items in financial statements. This relationship is expressed in the form of a percentage, rate, or a proportion. External and internal will use this method in order to gauge the growth and or direction the company is going in. Whether it is a good idea in invest money in them or let them borrow money.…

    • 534 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    Ratio Analysis
    • 3271 Words
    • 14 Pages

    Ratio Analysis

    The traditional financial statements that comprise of the balance sheet and profit and loss account do not give enough information related to financial operations of the company. These financial statements prepared as per the statutory requirement of law need to be analyzed in order to evaluate the past performance of the company and the future prospects. The most widely used tool is Ratio Analysis.…

    • 3271 Words
    • 14 Pages
    Better Essays
    Read More
  • Best Essays

    Business Finance
    • 2037 Words
    • 9 Pages

    Business Finance

    The objective of the report is to analyze Samsung Electronics Co., Ltd in relation to the last three years financial summary, with the aim of predicting future development of Samsung Electronics based on its past performance as well as providing some suggestions to clients about investment.…

    • 2037 Words
    • 9 Pages
    Best Essays
    Read More
  • Powerful Essays

    Bp Pestle Analysis
    • 3155 Words
    • 13 Pages

    Bp Pestle Analysis

    The report also covers BP’s market power with the profitability in its products. The report looks at society and our addiction to oil and the technical advances that BP has made. Finally the report covers the Failures of BP on an environmental level which has tarnished BP’s reputation as a MNE.…

    • 3155 Words
    • 13 Pages
    Powerful Essays
    Read More
  • Good Essays

    Health Care and Financial Statement
    • 485 Words
    • 2 Pages

    Health Care and Financial Statement

    There are three types of financial statement analysis; for example, (1) Horizontal Analysis, (2) Vertical Analysis, and (3) Ratio Analysis. First, the horizontal analysis is also known as trend analysis, which views the behavior of an individual financial statement items over several accounting, which may be several quarters within the same fiscal year or several different years; however, the analysis of a given item may focus on absolute dollar amount, according to Edmonds, T.P., Olds, P.R., McNair, F.M., and Tsay. (2010). Moreover, “percentage analysis sidesteps the materiality problems of comparing different size companies by measuring changes in percentages rather than absolute amount; in other words, each change is converted to a percentage of the base year.”( Edmonds et al 2010, p. 326). Second, as Edmonds et al stated, vertical analysis of an income statement also known as a common size statement, involves converting each income statement component to a percentage of sales; however, vertical analysis suggest examining only one period, which is useful to compare common size income statements for several years; which also involves converting each balance sheet component to a percentage of total assets. Third, “ratio analysis involves the study of various relationships between different items reported in a set of financial statement; for example, net earnings reported on the income statement may be compared to total assets reported on the balance sheet; however, analysis calculate many different ratios for a wide variety of purposes.” (Edmonds, et al, 2010).…

    • 485 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    Economic History of the Crude Oil Refining Sector of Trinidad and Tobago
    • 12515 Words
    • 51 Pages

    Economic History of the Crude Oil Refining Sector of Trinidad and Tobago

    Describe the economic history of the crude oil refining sector in T&T from its birth to its present status. What was the impact of US tax legislation on this sector? How did the IADB loan revamp the refinery in Petrotrin in 1993? Why was the refinery in Point Fortin closed? Why does the refinery operate at suboptimal capacity? Is the Moraven agreement still active? Outline the prospects for growth in the next decade for the oil refining and gas refining subsectors of the petroleum sector of the T&T economy.…

    • 12515 Words
    • 51 Pages
    Powerful Essays
    Read More
  • Powerful Essays

    Financial Analysis Interserve
    • 6779 Words
    • 28 Pages

    Financial Analysis Interserve

    This is an analytical procedures’ report of Interserve plc. to evaluate the company’s performance using its last four financial statements. The report is used in planning to understand the client’s business and industry. It compares clients’ ratio to industry or competitors benchmarks to provide an indication of the companies performance. Also, it is used throughout the audit to identify possible misstatements, reduce detailed tests, and to assess going-concern issues (Michael, 2011).…

    • 6779 Words
    • 28 Pages
    Powerful Essays
    Read More

Related Topics