Complete 21 page APA formatted essay: 'BP plc' Analysis report.Undervaluation of the companys stock using the DCF method is an indication that company shareholder value is expected to generate more we

Complete 21 page APA formatted essay: 'BP plc' Analysis report.

Undervaluation of the companys stock using the DCF method is an indication that company shareholder value is expected to generate more wealth for its shareholders

This paper seeks to prepare industry analysis, financial analysis and valuation of BP plc using different models. Financial analysis would include looking into the company’s financial performance in the last five years in terms of profitability, liquidity, solvency and valuation ratios. The paper will also explain the value derived from valuation models in relation to the financial performance of the company and the industry analysis on whether it is doing the correct strategies to generate value.

BP p.l.c. (or "BP") was founded in 1909 and incorporated in the United Kingdom. It presently operates as international oil and gas company with various products in not less than 40 countries. The company has two major segments: The Exploration and Production, and Refining and Marketing. The first segment is responsible to oil and natural gas exploration, field development and production, transportation, storage and processing, as well as marketing and trading of natural gas and liquefied natural gas and other power and natural gas liquids. The other segment - Refining and Marketing is into refining, manufacturing, marketing, transportation, supply and trading of petroleum, crude oil, petrochemical products and related services to wholesale and retail customers (Reuters, 2014a).

The oil and gas industry sector is part of the energy industry which is expected to grow heftily at least up to the year 2035 as a result of increasing population and growing demand for energy (Annual Report, 2013). The other sources of energy renewable, nuclear, hydro, and coal and yet oil and oil will continue to have big part in serving the energy requirement of the world in the next twenty years. The company believes that population and