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The table below shows revenue, EBIT and other financials for the previous 5 years. Revenue has shown an overall decline over the previous five years. The steep decline in 2020 was due to the global coronavirus pandemic. The jump in earnings from 2020 to 2021 and 2022 is due to the global volatility in oil prices as a result of the conflict in Ukraine. NCWC is non-cash working capital, and is calculated to be used in the DCF valuation below.
The table below shows revenue, EBIT and other financials for the previous 5 years. Revenue has shown an overall decline over the previous five years. The steep decline in 2020 was due to the global coronavirus pandemic. The jump in earnings from 2020 to 2021 and 2022 is due to the global volatility in oil prices as a result of the conflict in Ukraine. NCWC is non-cash working capital, and is calculated to be used in the DCF valuation below.
{| class="wikitable"
{| class="wikitable"
|+Historical Financials<ref name=":2">bp annual report 2022 - https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/investors/bp-annual-report-and-form-20f-2022.pdf</ref>
|+Historical Financials
| '''Units ($m)'''  
| '''Units ($m)'''  
|'''2018'''
|'''2018'''
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Notes - P&M = Production and Manufacturing, D&A = Distribution and Administration.
Notes - P&M = Production and Manufacturing, D&A = Distribution and Administration.
[[File:Historical Revenue bp.png|center|thumb|735x735px]]
[[File:Historical Revenue bp.png|center|thumb|735x735px]]
=== Revenue by Segment<ref name=":2" /> ===
The following table shows revenue by each respective segment, units are $ millions.
{| class="wikitable"
|+Revenue
|'''Segment'''
|'''2022'''
|'''2021'''
|'''2020'''
|-
|'''Oil'''
|33,193
|24,519
|17,234
|-
|'''Gas and low carbon'''
|56,255
|30,840
|16,275
|}
Oil revenue has increased at an average of 38.8% over the previous 3 years, whereas gas and low carbon revenue has increased at a much greater rate of 86% over the last three years.


=== Forecasts ===
=== Forecasts ===
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|+WACC Calculation
|+WACC Calculation
| '''Risk Free Rate of Return'''  
| '''Risk Free Rate of Return'''  
|4.5%<ref>UK 10 Year Gilt Yield - https://markets.ft.com/data/bonds/tearsheet/summary?s=UK10YG (as of 11th August 2023).</ref>
|4.5%
|-
|-
| '''Beta'''  
| '''Beta'''  
|1.17<ref name=":3">https://markets.ft.com/data/equities/tearsheet/summary?s=BP.:LSE</ref>
|1.17
|-
|-
| '''Market Rate of Return'''  
| '''Market Rate of Return'''  
|7.4%<ref>https://www.ig.com/uk/trading-strategies/what-are-the-average-returns-of-the-ftse-100--230511</ref>
|7.4%
|-
|-
| '''Cost of Equity'''  
| '''Cost of Equity'''  
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|-
|-
| '''Credit Spread'''  
| '''Credit Spread'''  
|1.42%<ref>https://www.bp.com/en/global/corporate/investors/debt-investors-information.html</ref>
|1.42%
|-
|-
| '''Cost of Debt'''  
| '''Cost of Debt'''  
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|-
|-
|'''Shares Outstanding'''
|'''Shares Outstanding'''
|17,270.00<ref name=":2" />
|17,270.00
|-
|-
|'''Share Price'''
|'''Share Price'''
|$ 6.13<ref name=":3" />
|$ 6.13
|-
|-
| '''Equity'''  
| '''Equity'''  
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|-
|-
|'''Weighted Average Maturity'''
|'''Weighted Average Maturity'''
|14.00<ref name=":2" />
|14.00
|-
|-
|'''Interest Expense'''
|'''Interest Expense'''
|1,632.00<ref name=":2" />
|1,632.00
|-
|-
| '''Debt'''  
| '''Debt'''  
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|'''5.8%'''
|'''5.8%'''
|}
|}
The WACC for bp used in the DCF valuation was 5.8%, note the share price is of bp on it's primary listing, the London stock exchange. The share price used was at market close on 11/08/2023. The price has been converted from GBP to USD for ease of calculation.
The WACC for bp used in the DCF valuation was 5.8%, note the share price is of bp on it's primary listing, the London stock exchange. The price has been converted from GBP to USD for ease of calculation.


=== DCF ===
=== DCF ===
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The following table compares bp to it's major competitors in the oil and gas industry globally.
The following table compares bp to it's major competitors in the oil and gas industry globally.
{| class="wikitable"
{| class="wikitable"
|+Comparable Company Analysis
|'''Company'''
|'''Company'''
|'''P/E'''
|'''P/E'''
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