BHP Billiton Budget and Financial Planning Company Overview

BHP Billiton is a global Anglo-Australian company specialized in petroleum, metal and mining. Headquartered in Melbourne, the BHP Billiton is one of the world largest mining company using the 2013 total revenue. The BHP Billiton was established in 2001, and has been ranked as a top performing mining company in the world. At the end of 2015 fiscal year, BHP Billiton recorded $44.6 Billion as the total revenue with the net income of $1.9 Billion. In 2010, the company recorded a net income of $12.7 Billion, and by the end of 2014 fiscal year, the net income increased to $13.8 Billion. However, the company net income drastically declines to $1.9 billion at the end of the 2015 fiscal year. (Annual Report, 2015).

This report carries out a financial and budget planning for the BHP Billiton to enhance a greater understanding on the strategy the company will employ in increasing its net income.

b. My Team

The task of my team is to carry out the financial and budget planning for the BHP Billiton. The responsibilities are to design effective financial and budget plan for BHP Billiton to assist the company to improve its financial capability in the forthcoming fiscal years. (Morning Star, 2015).

c. Types of Financial and Budgets Plans

The report prepares the operational and short-term budget plan and cash flow projections for BHB Billiton.

2.

The paper selects the BHP Billiton income statement budget plan for 2016

BHP Billiton ($ Billion) Income Statements

2014 Budget

2016 Budget

Difference

Sales

Sales -- Quarter 1

Sales - Quarter 2

Sales - Quarter 3

Sales - Quarter 4

Other

Total Sales

54

88

(34)

Cost of Goods

Beginning Inventory

Goods Manufactured

Shipping Charges

Labor (wages & payroll)

Other

Less Ending Inventory

Cost of Goods Sold

38

39

(1)

Gross Profit

15

49

(34)

Non-Operating Income

Interest Income

Rental Income

Other

Total Non-Operating Income

Total INCOME

15

49

(34)

EXPENSES

Operating Expenses

Accounting and Legal

2

2

(0)

Advertising

2

2

(0)

Depreciation

Dues & Subscriptions

Insurance

Interest Expense

Maintenance & Repairs

Office Supplies

5

5

1

Payroll Expenses

1

1

1

Postage

Rent

Research & Development

0

0

(0)

Salaries & Wages

Taxes & Licenses

Telephone

Travel

Utilities

1

1

Web Hosting & Domains

Other

Total Operating Expenses

11

11

0

Non-Recurring Expenses

Furniture, Equipment & Software

1

1

Relevant personnel to consult for the financial and budget plan are Chief Financial Officer and Accountant of the company.
2c. I will consult the company financial statements for the past 5 years, calculate the average to estimate the company financial performances in the last 5 years. Moreover, I will carry out market analysis of the industry that BHP is operating. The findings will assist in estimating the accurate budget planning for company.

3a. The issue encountered that might affect my work team operation is about the method to prepare accurate budget planning for the BHP since the company is being affected by external environmental factors such as political factors, global economic factors and socio-cultural factors. The strategy to overcome the issues is to carry out the analysis external environmental factors that might affect market demands of the company and use the findings to forecast the budget planning.

3b. The strategy to use in overcoming the issue is to use the contingency plan using the sensitivity analysis for the budget. For example, the report will reduce 30% from the net income in case the original budget plan is not realized. The sensitive analysis will assist in overcoming the issues that might have arisen from the budget.

3c. The step to take to improve the financial planning is to diverse the business operations by investing part of the income in a top performing companies to increase the company net incomes.

4(a). The strategy to disseminate the information of the budget plan to the team member is through:

Electronic communication

written communication

formal meetings

group meetings and sessions, and face-to-face presentations that include teleconferencing and video-conferencing.

4b. The roles and responsibilities of the team member are to provide advice, support and guidance that could assist in budget implementation. Moreover, the team member should ensure that the role and responsibilities are well understood. It is also critical to provide appropriate support to assist staff members to carry out their duties effectively.

4(c) The resources to assist team members achieving their tasks are:

human resources

physical resources

financial resources

Information management systems that include hardware and software

record-keeping systems.

Provides access to different documented financial procedures provides training that include coaching, and mentoring.

Provides relevant information from the internet and intranet.

Conducting information session and briefing.

Access specialist advice.

ASSESSMENT 2

1a. Method to monitor expenses include:

understands the company performance indicators records the company expenditure information.

1b. To control costs, managers must create financial report relating to:

assets consumables equipment expenditure income stock,…