Reference no: EM132893514

Use the following information from BP plc's accounts (all figures in $ millions) to calculate and comment on their financial ratios. Please show all work -- including formulas.

Current Assets: inventory 26,554; trade receivables 38,020; cash 3,562
Current Liabilities: trade payables 43,152; short-term loans 15,394
Long Term Liabilities: notes payable 204,943; long-term leases 60,000
Shareholders Equity: 689,345
Gross Profits: 75,942
Net Profits: 27,476
Sales Revenue: 133,345

Problem 1: Calculate BP's Gross Profit Margin.

Problem 2: Calculate BP's Net Profit Margin.

Problem 3: Calculate BP's return on Capital Employed (RoCE)

Problem 4: If you were a stakeholder, would you consider other investment options based upon the current RoCE? Explain your answer.

Problem 5: Calculate BP's current ratio.

Problem 6: Calculate BP's acid test ratio.

Problem 7: Comment on BP's liquidity.

Problem 8: Why would it be useful to BP's stakeholders to have liquidity ratio results for the previous year and for other oil companies?