The Case Studies Of Comparative Analysis On Financial Statements Of Petrochina And Sinopec

Firstly, this paper gives a simple introduction to the two listed companies of PetroChina and Sinopec, and then a more detailed and in-depth analysis on the two companies’financial reporting structure, profitability, development capacity, solvency, operational capacity and cash flow based on financial reports of the past five years (2007-2011). Finally, a comparative DuPont financial analysis have been done for the two companies.The paper found:the total assets, operating income, the proportion of operating costs in revenues of the two companies has a rising trend, especially the rising operating cost of business has brought great challenges to the two companies. Overall, the return on assets (ROA), solvency, cash flow ability of PetroChina is stronger than that of Sinopec. But with the negative impact of rising international oil price, the downward trend of PetroChina’s ROA was significantly greater than Sinopec. Because of the operational capacity of Sinopec is better than PetroChina, coupled with a reasonable capital structure, the return on equity (ROE) of Sinopec exceeds that of PetroChina from the year of2009. In terms of growth, PetroChina pay more attention on abroad expansion, while the Sinopec is more focus on internal potential, but significantly increased the overseas M&A investment in2011.As for the future development, PetroChina must pay great attention on controlling the operating costs on the one hand, and should strengthen its operational capacity and optimize its capital structure to a moderate scale of liabilities; Sinopec should seize the opportunity to implant the mergers and acquisitions in upstream resources, and thereby minimizing the operating costs as much as possible. Meanwhile, the two companies should also improve the debt structure and reduce the proportion of current liabilities.