British Petroleum

Posted: August 6th, 2013

British Petroleum

Question Ten

The most recent annual report for the British Petroleum Company is that of the previous annual calendar of 2011. In accordance with Stanko (2003), the constituents of the organization’s annual statement can be divided into four sections. These include a comprehensive company description that defines the company’s business segment, products produced, and markets served. The second part is the letter containing the chairperson’s message. This highlights the company’s financial position in the preceding year in addition to future prospects. The third section is referred to as the analysis and management discussion. This section of the annual report serves to compare the compare the company’s recent performance to that of previous years. It includes aspects such as operating income, profit margins, sales, net income among others. The final section of the organization’s yearly statement can be categorized as the financial summary. This section includes the company’s income, sales, dividends paid, number of employees, shareholder’s equity and balance sheet items. All the components highlighted above are indispensable sources of information for potential investors, employee/manager, creditors, and other parties.

Potential Investors and Shareholders  

Potential investors and the company’s current shareholders are regarded the primary users of the annual report. In this regard, potential investors rely on this information with a view of establishing whether the company is profitable. Since the annual report suggests BP is profitable, this will enable investors to identify the amount of investments to commit to the company and formulate the forecasted results. On the other hand, shareholders use this information with a view of identifying the value of shares they own at the company, and decide whether to invest in more or sell the existing shares (Stanko, 2003).

Customers

The company’s clients desire to work with excellent suppliers of services and goods. In this case, the annual report helps the company to promote its brand with clients through highlighting its core values and corporate mission. The customer’s observation of the business is determined by the initiatives set in the report aimed at improving manufacturing processes, creating quality, reducing costs, or enhancing services (Stanko, 2003). In conclusion, the annual report also serves the purpose of indicating the financial strength of the company. The current generation of clients demands capable and committed suppliers who will execute their responsibilities for the long term.