DUPONT ANALYSIS OF THE EFFICIENCY AND INVESTMENT APPEAL OF RUSSIAN OIL-EXTRACTING COMPANIES
The purpose of the paper is to reveal factors that may have importance for Russian oil-extracting companies’ sufficiency and investments appeal. At the emerging markets, due to asymmetric information and lack of transparency, investors can make adequate conclusions on their investments in a special company only if they know and understand correctly its business model. If a company demonstrates the steady growth of indicators and ratios that have a substantial importance for its current and potential investors, it has better opportunities to raise funding for its projects. The company’s management may analyze the dynamics of these indicators and make efforts to increase the efficiency.
For oil-extracting companies, that form the basis of the modern Russian economy, the problem of efficiency and investments appeal growth is very important due to the business specifics – the prevalence of fixed assets in assets structure, the high dependence on the natural conditions of extracting, from one hand, and on the market prices, from the other one. It is important to benchmark the efficiency and to concentrate managerial efforts on its leading factors.
To reveal the factors of efficiency, DuPont analysis was made. The sample was formed from the companies that were included at «The Energy Intelligence Top 100: Ranking The World’s Oil Companies 2012». The sample consists of 41 companies, that are included also at «FT Global 500 December 2012». 7 of the companies in the sample represent Russia, others are from different countries of the world. The financial data was collected for the period of 2008-2012. On the base of the regression analysis the impact of factors on the ROE (return on equity) was investigated. Then the best and the worst companies were defined for the purpose of benchmarking of the Russian companies. The managerial recommendations were made on the base of the benchmarking.