Understanding project contractors and contracting businesses Essay

Understanding project contractors and contracting businesses - Essay Example Understanding project contractors and contracting businesses Analysis of such parameters will help us with an understanding about how the companies have performed over the seven years and whether they were able to add value to the company. One of the companies chosen above has a high total asset usage and the other one has a low total asset usage. The underlying rationale behind choosing this ratio as the primary differentiating parameter between these two companies is because this ratio is very useful in determining the financial performance of the company. It gives us an indication of the pricing strategy that the companies have adopted. Moreover, the firms have been chosen as a case of high and low values of a ratio that appears in the Du Pont system, which will make it easy for us to explore relationships and trade-offs between that and other ratios. The following sections will involve the analysis of key financial ratios that the firms have been able to achieve over the seven years. 2. Midas Retail Limited Midas construction is the larges t company that belongs to the Midas group of companies. The primary line of work that the company is engaged in is to serve the design and construction needs of all its customers from a network of local offices. The company works in close partnership with its local partners who specialise in supply chain, thereby utilizing their local expertise and knowledge. Each of the regional business under the Midas group offers highly personalised services which are designed to suit the needs and requirements of every individual customer and project (Midas, 2013) 3. Rock Fall Company Limited This company specilises in drilling, explosives engineering and blasting, particularly in the marine environment. The company has been able to complete more than 200 contracts in about 35 countries. The line of work that the company is engaged in ranges from the removal of small boulder outcrops to massive port development schemes. The activities are generally related to harbor deepening, clearance of navi gation channels and quay well construction. Another activity that can be include in the company's list of underwater expertise is foreshore trenching (Rock Fall, 2013). 4. Ratio Analysis Ratio analysis is an attempt to reduce accounting information in to more usable understandable figures and look at relationships between the figures. It can be used to ‘help interpret trends in performance year on year and by benchmarking to industry averages or to the performance of individual competitors or against a pre-determined target’ (Collier, 2009, p.104). Firstly, we can compare ratios for two or more accounting periods and look at the change. However, external factors may have influenced activity levels. For example, public awareness of environmental issues may have necessitated a change in manufacturing process leading to increased costs. Secondly, we can compare this to another company in the same industry. However, in some case, businesses may not be truly comparable with regard to size and type. For example, bases on which accounting information is prepared, may be different (inventory valuations and depreciation). Thirdly, we can compare this to an industry average, these can be compiled using data bases such as â€Å"Data Stream†. However, these have to be comparable as reflect as closely as possible the various characteristics of the company (McLane & Atrill, 2009, p.224-225). 4.1 Efficiency Ratios 4.1.1 Asset turnover This ratio measures the amount of sales that a company generates for every dollar’

The Changing Role of National oil companies in the international Dissertation

The Changing Role of National oil companies in the international energy Market - Dissertation Example Oil prices increased in recent years from about $20 to about $100 per barrel, thereby expanding profits for many national and international oil companies. With decreasing supply and increasing demands for oil, oil companies have been competing with each other to seek more substantive oil sources. The fact that majority of oil reserved are under government control is giving a major advantage for national oil companies on access to oil sources. Having control over these oil reserves has also brought about greater pressure for oil companies, mostly pressure in relation to their national roles and responsibilities, especially those which relate to supply and demand, globalization challenges, physical security, and international oil competition. 1.2 Background of the problem National oil companies are oil companies which are partially or wholly owned by national governments. Recent surveys from the United States Energy Information Administration indicate that about 52% of oil companies ar e nationally owned; and about 88% of oil reserved is controlled by national oil companies (Energy Information Administration, 2009). National oil companies (NOCs) have become dominant in recent years and in relation to international oil corporations, including ExxonMobil, BP, and Royal Dutch Shell, their dominance has gained much momentum. These NOCs have also increased their investments outside their borders. Some corporations have even abandoned their investments in various countries, as was the case for ExxonMobil abandoning its million dollar investments in the Orinoco basin in Venezuela (Mommer, 2001). This decision was caused by the breakdown of negotiations between the international oil companies on one side and President Hugo Chavez and Petroleos de Venezula (PDV) on the other (Kalicki and Goldwyn, 2005). Other international oil companies, including Total SA of France, Statoil of Norway, BP from Britain, and Chevron from the US agreed to raise the PDV share in the Orinoco pr ojects from 40% to 78% (Oil Daily, 2007). Under these conditions, ConocoPhillips found this decision very much unfavourable to their interests. The company was able to detect about 1.1 billion barrels of reserves from their interests in Venezuela and this represented about 10% of their total reserve holdings, and their Venezuela interests was equivalent to 4% of their total crude oil reserves (Oil Daily, 2007). ConocoPhillips suffered $4.5 billion dollar write-off under these conditions and was unable to meet its targets; as a result, its shares suffered a beating in the stock market (Oil Daily, 2007). On the part of Venezuela, PDV was able to increase its reserves and its production activities; as a result, it gained more power in the international oil market (Pirog, 2007). Venezuela has a major share in the crude oil imports of the US and their oil flow is not directly controlled by their government (Pirog, 2007). These conditions however, may not allow the crude oil market to fol low and be influenced by economic market dictates. The ranking of oil companies can be determined through various considerations. Various standards have to be used in order to evaluate the changing qualities of oil companies. In addition, investments in explorations and development are major considerations linking the present to the future, ensuring significant expansions for the company and preventing the depletion of reserves