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Financial Analysis Of Imperial Oil

1629 Words7 Pages

This paper uses financial analysis to evaluate and make a recommendation about Imperial Oil as an investment. Imperial Oil is one of the largest integrated energy companies in Canada and is part of the oil and gas industry which is subject to some volatility due to frequent fluctuations in prices. Horizontal analysis of the balance sheet and income statements are included, as well as the calculation of key ratios including debt to equity, asset turnover, times interest earned, liquidity, current and quick ratios. Ratios are compared to industry benchmarks as well as to previous years for Imperial. Although there are some limitations to this financial analysis, our evaluation shows that Imperial Oil is a company with strong fundamentals, improvement year over year in key areas and would make a good long-term investment.
Keywords: Imperial oil, investment, financial analysis, ratio analysis, horizontal analysis

Introduction …show more content…

It is the fifth-largest producer of natural gas and the sixth-largest producer of crude oil in the world. However, there are fewer than 20 companies doing the majority of the production, refining and sales/marketing of oil and gas in Canada (Natural Resources Canada). One of the largest companies is Imperial Oil, headquartered in Calgary, Alberta. Imperial has maintained a strong standing in this volatile market due to an integrated business model, strategic investments in production and steadily increasing production, and a focus on cost management. In this paper, we will analyze the income statement, balance sheet and relevant ratios for Imperial Oil and show that due to this company’s strong fundamentals it is a good (low-risk) long-term

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