OMV is one of the leading companies in the world, that is why one of their main purposes is to have an encourage staff and employees to provide excellent service and attention to the customers. OMV company take special care about their staff by organizing a survey every year. The aim of this survey for OMV is to find employees` problems and to find possible solutions. OMV`s goals are to have happy and satisfied staff. In addition they organize specific health programs, which are planned by experts to prevent possible physical or psychical problems at the workplace. Also OMV is organizing training and developing programs, supporting team building. A very important part of OMV social and corporate responsibility is to pay special attention to the environment and nature surrounding. OMV hold a company called ” Future Energy Fund”, which goal is to participate in projects connected with renewable energy and reduction of emissions. In addition OMV has a special technology called “Ad Blue”, which save 60% of the costs and emissions, and is particularly set to reduce greenhouse gases.
Rompetrol is also a large cooperation, which is not so popular in the world, that is why their main task is to have a happy and polite staff, so their customers want to come back. Rompetrol is participating in many ways for social and corporate responsibility. Rompetrol respect their employees and organize often development opportunities and employment practices. In addition they mostly respect, protect and promote the human rights, culture, customs and values of the company. In 2009 Rompetrol organized a national program called ” Together for each and everyone”, which focuses on healthcare and environment program. Rompetrol and “Ghizii Romaniei” supported and organized a project, which aim to include ecology, educational activities, civic and sport spirit. In the recent two years, OMV has made discoveries in Romania, the Kurdistan Region of Iraq, and Australia. By this way they build that basis for future growth. This is the basis for future growth. In addition, many development projects are in the pipeline – in Yemen, Tunisia, and West of Shetland, for example. Assuming production levels in Libya and Yemen return to normal, E&P’s project portfolio will allow organic growth to increase from 318,000 boe/d in 2010 by around 2% per year to about 350,000 boe/d in 2016. In the current situation, Rompetrol say for them that the project they were planning is moving into action.
Due to studies led by Rompetrol, they have estimated and increase of the current net USD 100 million margin over years 2007-2011. They benefit from the advice of Solomon partners and aim to realize maximum operational excellence upon minimal investments. Also, they are moving forward with the already started goal of being in the list of 25 European refineries. OMV will increase its E&P business over the next years by two or four per cent per annum. Over two thirds of OMV’s future investments will be directed towards the exploration, development, and production of oil and gas. What is more, the top executives of Rompetrol made a discussion about the future The leadership of the Rompetrol Group discuss a future co-operation with the Romanian state owning forty five present of the Rompetrol Groups’ Romania- based refining unit Rompetrol Rafinare. The working group will be consistent of the following executives: TRG Executive Manager Zhanat Tussupbekov. Moreover, Rompetrol’s strategic aim envisages co-operation its position in Bulgarian fuel market, with intensive and extensive development programs. However, they will enlarge retail network, by opening new franchised offices. Then Rompetrol will start many different programs to attract and retain client in their network. According to article which we find in the internet the Corporate Governance is highly essential to OMV. A good teamwork between management and the Advisory Board is important to respect and to work for the best interests of all shareholders and offer confidence to OMV’s stakeholders.
However OMV is run are that Austrian government offers them lower taxes in order OMV to keep their head office in Vienna and in this way to save many working places. On the other hand the mission of Rompetrol is to offer reasonable fuel distribution answers to individuals and businesses, with the complete cost efficient supply channels, stimulating modernization and delivering return on investments to our shareholders. We stress to the vertical integration of its sole shareholder by providing access to European petroleum product markets. IAS 37 is the Provisions, Contingent Liabilities and Contingent Assets summaries the accounting for supplies (liabilities of uncertain timing or amount), together with commission assets and contingent liabilities. Some of the major investment are related with future investments and discover new reserves. Some firms formed consortium liked the biggest one in the world between Total OMV and Repsol. They have a huge progress in Romania by finding new reserves of petrol and natural gas. The interesting fact here is that they will start examining the Bulgarian part of the Black sea shore. Rompetrol is on the same way interested in future investment but the main target is the Turkish market. Their major reserves are related mostly with the Kazakhstan national oil and gas company KazMunayGas. IFRS 8 suggests the accounting and admissions required for an entity’s working sections, goods and services, and the geographical parts in which it operates and its main clients. In every period end OMV and Rompetrol are obligated to shows their cash flow in the business registry and that is the official way of showing their revenues. Unofficially everyone can look for the annual report in the internet but there is no guarantee that it will legitimate.
Every company needs a detailed explanation of its financial performance, how their entity is running in the market. They can use information of quantitative and qualitative nature extracted from both internal and external sources. Ratio analysis is a major part of conducting a business, according to Dyson (2007) “it is simply the division of one arithmetical amount by other arithmetical amount, and then expressed as a percentage or as a factor.” Basically, ratio analyses are one of the most useful financial tools, because it compares one figure with another. Simply it expresses relationship between lots of amounts easily and simply. Ratio analysis is an important technique in the interpretation of account, and in this paper we will evaluate ten ratios for both companies for the last two years and the outcomes, results will be analyzed. All numbers, figures and calculations used below are used and can be find in Appendix 1. Firstly, we evaluated liquidity ratios, which contain Current Asset ratio and Acid-test ratio. When we evaluate current asset ratio, if the company is going well his current assets should excess its current liabilities, if this rule is not observed that means that the entity haven’t sufficient liquid resources. Which means that the company will not be ready to turn its currents assets quickly into cash. In our situation OMV has higher current assets that current liabilities, which show that this company is stable, liquid and running well. On other hand we have Rompetrol, which has some troubles, because in 2011 its current liabilities increased and they are more than their current assets, which tell us that this company haven’t sufficient liquid resources.
According to the acid-test ratio OMV has strong position on the market, the main requirement here is acid-test ratio to be smaller than current ratio and this rule is observed. On annual report of the other company, Rompetrol has also lower acid-test ratio, but the problem here is that they have decrease in inventories in the last 2011 year than 2010. Secondly, we calculated efficiency ratio, which are an important part of conducting a business. As a whole, traditional accounting statements don’t tell us how efficiently an entity is or how well its resources have been looked after, that is why there are many types of ratios, which are very important about conducting a business. Trade Payables Settlement Period show us that OMV has some small problems with paying suppliers, but in the next 2011 they really improve this and decrease the payment with 20 days. Rompetrol is showing bare problems with paying to suppliers although they have decrease also in days, it is from 72 to 60, which is according to us not satisfied period, but this can be due to the times if crisis. Inventory turnover period show us how their inventory policy is moving. OMV confirm their good policy and we can see decrease in their inventory turnover period. Rompetrol is also showing little decrease in inventory turnover period and prove their improvement. Trade Receivables Settlement Period ratio confirm that both companies are running well, and according to this ratio they have enhanced credit system, because both of them decrease the debtors period settlement. Net Assets Turnover is a pointer showing how generated revenue per unit of investment is improved.
Both companies show that they are strength and stable, because we observe that they increased their net asset turnover from 2010 to 2011. Next step was to check up how profitability ratios are going on. Profitability ratio show us how much profit a business/company “has made and also this type of ratios give us a great opportunity to compare it with previous periods or with other entities.”, according to Dyson (2007). Gross Profit Margin is a ratio which shows us that both companies have not well developed trading success, because their GPMs have decreased from 2010 to 2011. Operating Profit Margin is clearly showing the ongoing performance of the company, also it measures levels of and rates of profitability, whether a company is successful or not. OMV and Rompetrol`s operating profit margins decreased from 2011 to 2010. Return on Capital Employed is also a part of profitability ratios and its main concept is to show how the business earnings from its assets. An eventual increase here, can be due to increase in operating profit. In our situation we observe increase in both companies. A major part of how the business flow is the Gearing Ratio, where debt has to be less than equity. OMV obey this rule and their non-current assets are less than total equity, but on the other hand we can observe that Rompetrol`s non-current liabilities increase and are more than equity from 2010 to 2011 and that is why their gearing ratio increase. According to the analyzed data, we can conclude that OMV is running well and is also a strong and stable company, because their mission is to increase their total assets and to decrease their liabilities and they succeed, while Rompetrol is facing some troubles with conducting and running the business as a whole.
Currently, the company controlled by the Austrian group OMV, seems to have adopted the idea of diversifying activity by increasing the weight of hy-drocarbon exploration and energy production. The important level, firms belonging to this industry is strongly influenced by the macroeconomic cycle, mainly by means of fuels and energy required in industrial processes. Therefore, the best time to invest in stocks of the energy field is towards the middle of the economic expansion. However, starting from the hypothesis of an economic revival as of 2013 and estimated by the stock exchange market, we have kept a rising price target set against current values. The analysis for the macro and micro economic factors for the both companies OMV and Rompetrol are very similar because there are in the same branch. The policy of the both company is to invest I different securities on the stock exchange to maximize their profit. In the macro analyses basically there are demographic factors how the population in countries is changing, what is the population growth and also what is the average education of the population in the countries where these companies are located. But the main differences came from the average income of the people in the different countries and also what are their savings and also dose the population have many credits. Also here in the macro economic factors we can put the investment political campaign and also into new technologies and into ecological improvements of the refineries and to produce more pollution friendly products and also to invest in organizations which are dealing with environment savings. The micro economic factors are in general formed from the different suppliers and customers. Also for its analyze formation are very important and the employees and least but not last the creditors are also very important.
Date, time, location: 06.01.2013, 11:00, IUC C-Lab Hemis numbers of those attending: Brief details of the work done and / or topics discussed: Choose two companies, which meet the requirements Make a plan, what should be written in the different parts Make some drafts of examples Finding all relevant ratios Finding annual reports for both companies for the recent years Details of any plans made or decisions taken: We decided to choose OMV and Rompetrol companies for our course work
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