Each and every frim in the course of its operations try to add value to the firm’s market operations in two different ways. One of them is to earn maximum profits under the circumstances and the other is to maximise the shareholders wealth. Although they look to be two different things, both are actually closely interrelated. The executives of BHP Billiton can achieve both by achieving any one of these objectives.
The objective of this study is to determine the effect of the BHP billion firm’s current operations on the value of its stock and also to see if the firm has been able to increase and maintain the stock prices over a time period. This analysis would present enough idea for current shareholders to determine if they shall hold the investments in the BHP Billiton over the next few period. This would also help prospective shareholders decide whether they shall consider investing in the stocks of the frim positively. The present analysis would consider the operative efficiency by analysing the firm operations from a comparative perspective by undertaking a ratio analysis and then evaluating the effect of company’s performance on the value of the stock through dividend discounting model.
BHP Billiton, an Anglo-Australian MNC, is into mining operations along with metal and petroleum business. The company is head quartered in Melbourne. It is the largest mining company in terms till 2013 when global recessionary trends hit the company with considerable downward trend. Mineral companies like BHP BILITON are primarily engaged in extraction of minerals and their supply worldwide. Normally there is high demand for metal and mineral raw materials all over the world and specifically BHP Billiton was one of the largest suppliers of minerals and metals to the burgeoning Chinese firms. As the Chinese economy grew at over 8.5% in the past 20 years or so, there was huge demand for minerals to produce iron and cement. This put firms like BHP and Rio Tinto in a growth spiral. However, as Chinese economy is in the grip of a downward spiral and many economies including that of US are still grappling with recessionary conditions, it would be interesting for the likes of BHP to continue the momentum.
BHP BILITON is the largest mining company of the planet with sizable bases in more than four continents. The primary operations are in Australia and US, but a sizable presence is also found in Europe and Africa.