Software Quality Requirement Analysis on Educational Game

Software Quality Requirement Analysis on Educational Game Software Quality Requirement Analysis on Educational Mobile Game with Tourism Theme Anggy Trisnadoli1*, Istianah Muslim2, Wenda Novayani3 Abstract: Mobile game is one type of game that runs on mobile devices such as smartphones and tablet PCs. In previous research, we have proposed quality model for mobile game which is a quality model that was built to measure quality from mobile games. This model was built from quality requirements that were analyzed for mobile games. Educational mobile game is education game genre with mobile based that aimed to learning, then the quality requirements maybe will different compared to other games. This research was conducted by analyzing the mobile games quality requirements that specific for educational games genre in order to generate new quality requirements that are specific to the mobile educational game. The case studies that become an evaluation of current research are the tourism of Riau province, Indonesia. So the mobile educational game that will design later is a mobile educational game that contains about tourism in Riau province. To get a list of criteria for this case, then we conducted a survey of several users, and also formed a group discussion forum along with a tourism ambassador of Riau province, so that the quality requirements will be more reliable. So the proposed quality requirements may become a reference to build a game product that has a good quality based on the users perspective. Keywords: Software quality, games, mobile games, educational mobile games, tourism, Riau province. Game is a system composed of artificial rules that involve players with the aim to entertain [1] [2]. Game contains scenarios that composed of a collection of audio and visual interest that allows users to enjoy game play that has been given by the game. By the unique characteristics game compared to other software, then, there are many things that do more specific, special for the games. Quality model for mobile game is one of the quality models that were built to measure the quality of the mobile games [3]. This model was built based play ability quality models built by Sà ¡nchez et al [4] and adapted to the quality requirements for mobile games [3]. In its application this quality model used to measure the quality of a users perspective, so that measurements can be made after the game finished mobile products developed. In designing an educational game, it must be guided by a good reference. Quality assurance can be done starting of the development stage, the design stage. Quality models for the mobile game offers a collection of properties that indicate the needs of a mobile game quality, so that the quality requirements can be used as a reference in building a good mobile game. However, that offered quality requirement is built for the mobile game in general, while the mobile educational game is a genre the mobile game with educational or learning, so that the quality requirements could have a few differences. Based on these problems, so, in this research we performed an analysis of the mobile games quality requirements that are specific to the educational games genre, to be able to produce a game product that has fit quality of the quality requirements based on the users perspective. As for the issues that will be studied in this paper are does requirements for a quality mobile game can be used as a reference in the design stage of development the mobile educational games. And how far the relationship of quality requirements for mobile game required to Mobile Educational Games with Tourism content of the users perspective to be able produce a good quality product. 2.1. Quality Requirement for Mobile Game In 2015, research on the quality model for mobile games has been conducted by Trisnadoli, Hendradjaya and Sunindyo [2] entitled A Proposal Quality Model for Mobile Games. Quality Model for Mobile Game was formed based on the software quality requirements that has been compiled based on the criteria and ideas from several researches on mobile games [3]. The proposed model has quality factors as shown on Fig. 1. Fig. 1. Quality Model for Mobile Games [2] Factors and sub factors for the quality of the quality model for mobile games that have been proposed are Usability In Use with sub factors Effectiveness In Use, Efficiency In Use, Satisfaction. Then Flexibility In Use with sub factor Accessibility. And Safety with subfactor User Health Safety Table 1. Quality Requirements for Mobile Games [3] No Quality Requirements for Mobile Games 1 Game gives a clear goal and a player can achieve goal 2 Players do not find any error in the game 3 Game can be played in a short time 4 Game easy to understand by players 5 Game has a manual (help feature) 6 Control of the game has been consistently in according with the standards 7 Games provide an appropriate response to the action of Players 8 Challenges, strategies and the steps of the game are already balanced 9 Screen layout is comfortable to be seen 10 Audio of the game was comfortable and supportive with a good game 11 Mobile devices and game interface are already suitable and appropriate 12 The experience of playing is Fun 13 Players get the appropriate reward 14 Storyline or scenario of the game is interesting 15 Players can express themselves 16 No repetition that make the game boring 17 Game control is appropriate and flexible 18 Game can accommodate the surrounding environment 19 Game supports multiple ways to play 20 Players are not affected on safety and health issues Mobile game is defined as a game played on a mobile platform-based devices are expected to increase the entertainment on the users mobile device. Mobile devices that can be applied to mobile game such as Smartphones, PDAs, Tablet PCs and Portable Game Console. Mobile game is highly dependent on the device that became his home [5]. Based on the characteristics of mobile games and mobile applications presented by several researchers [6]-[11] then performed an analysis of the characteristics and then were extracted to produce set of quality requirements are been the foundation of building a quality requirement that will be used. After conducting an analysis of data that has been collected, so, the conclusion of proposed quality requirements for mobile game can be seen in Table I. 2.2. Educational Game Genre Characteristics According to Sugihartono [12], educating means the process of changing the attitudes and behavior of a person or group with a mature effort with teaching and training efforts. Education can be obtained for both formal and informal. Formal education was obtained from a structured learning that has been designed by an institution. While the non-formal education is the knowledge gained humans in everyday life either experienced or learned from others. One way to learn with non-formal system is by educational game. Educational games are games that are designed or created to stimulate thought include improving concentration and problem-solving [13]. YM Harahap on [14] concluded that the educational game is one of the games that can be useful to support the teaching and learning process with more fun and more creative, and usable to provide teaching or increase user knowledge by an exciting media. According to Hurd and Jennings [15] declared that educational game is game that is specifically designed to teach user a certain learning, concept development and understanding and guide them in their ability to train and motivate them to play. Factors that are considered necessary in developing educational game are usability, accuracy, appropriateness, Relevance, Objectiveness, Feedback, Engagement, Motivation, and Gaming Literacy. Dondlinger [16], said that a number of distinct design elements on educational games are narrative context, rules, goals, rewards, multisensory cues, and interactivity seem necessary to stimulate desired learning outcomes. And a few other things about the characteristics of the educational game are Challenging, Fun, and Excitement not patronizing and based on experience, interactive, expertise, reflection. Determination of the quality requirements of mobile educational games, we perform an analysis based on various sources of quality requirements, such as the quality requirements that have been offered by previous researchers then combine from survey results that conducted on some respondents, while also using the functional requirements of mobile educational game stakeholders for tourism in Riau province. So that, the proposed quality requirements can become a reference in developing mobile educational game with good quality.   Ã‚   3.1. Quality Requirements for Mobile Educational Game based on Users Perspective In determining the quality requirements of mobile games from the users perspective, data collection or surveys conducted to several respondents randomly. Respondents, who being questioned are derived from various professions, age, sex, and excitement in playing the games. The stuff to consider in conducting a survey on software quality requirements analysis for mobile games are The comfort of audio and visual, Interest on the storyline, Satisfaction in playing, the comfort using control game, Screen size of mobile devices, Addictive (the desire to repeat the game). Survey of users was conducted in the form of an interview. Selection of respondents by random sampling method is applied to 130 people with different backgrounds, but still has an interest in using games on mobile devices. The interview results are then analyzed and processed by concluding and verification of data obtained. Table II is the result of the conclusions of the quality requirements of mobile games based on the users perspective. Table 2. Survey Result on Requirements from Users Perspective No Indicator Requirements 1 The comfort of audio and visual Mobile game should be good appearance The layout that is used comfortably viewed Color usage harmonious and good 2. Game Controller The buttons position is appropriate The controller usage is simple 3 Storyline Game characters are Interesting Scenario of the games are not boring The desire to repeat the game again and again Based on data that shown in Table II, and after calculation of the number of respondents who give a positive statement on the list of requirements, so the number was created in the percentage as shown in Fig. 2. Fig. 2. Survey result on requirements from users perspective by percentage 3.2. The results of the Forum Group Discussion for Riau Province Tourism Case Study Forum Group Discussion (FGD) was conducted to get a conclusion for the criteria that are required to build a mobile educational game with a case study of tourism on Riau province. This activity was attended by 35 participants that were an ambassador for tourism in Riau province. Discussions were held during few hours, then, closed with some results which can be seen in Table III. Table 3. FGD Result to Mobile Educational Game Criteria No Indicators Criterias 1 Interface Attractive appearance (eye catchy) 2 The color usage is comfortably viewed 3 Audio comfortable to hear 4 Storyline Interesting storyline or game play 5 Not boring 6 Addiction (wanted to play again-and again) 7 Education Contents Simple but meaningful Growing a curiosity From the discussion we get conclude that the most important content in game tourism theme are Arts, Tourist Attraction and Folklore. Arts with Traditional Dance, Songs and Musical Instrument. Tourist Attraction with Nature and Historical Heritage. Folklore with Legend and Fairy Tales. Table III shows the various technical criteria to be considered in the development of an interesting mobile educational game. In order to build a mobile educational game on tourism sector, there are several things to consider such as the content, simple but meaningful and interesting, and dont forget to contain about Malay art and culture, because it is a hallmark from Riau Province. As for the interface of this educational game, the things to consider are the attractive appearance, the use of color that comfortable to look at and pleasant sound to be heard. After discovering the things that become important considerations in the requirement of mobile games, educational games, also the requirement for mobile game with tourism content, then formed a new calculation to show the overlapping and interrelated requirements to be good quality requirements as a reference in designing a mobile-based game with education genre and tourism case study in Riau province. The results of the analysis are shown in Table IV. Table 4. Mapping of Quality Requirements for Mobile Educational Games with Tourism Theme Requirements Quality Requirements for Mobile Games [3] Previous Research on Educational Game Survey Result from Users Perspective FGD Result on Educational Game on Tourism Game provides a clear goals à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Game is easy to understand à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Game can be played in a short time à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Game have complete features à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Control of the game has been consistently in according with the standards à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Screen layout is comfortable to be seen à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Audio of the game was comfortable and supportive with a good game à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ The mobile device screen is appropriate to the game à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ The experience of playing is Fun à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Storyline or scenario of the game is interesting à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ No repetition that make the game boring à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Game control is appropriate and flexible à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Players gain knowledge from the game à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Game is simple but meaningful à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Content on tourism must be update à ¢Ã‹â€ Ã… ¡ Language usage appropriate to target of player à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Having educate messages behind the entertainment given à ¢Ã‹â€ Ã… ¡ à ¢Ã‹â€ Ã… ¡ Based on that Table IV, indicated that some requirements are actually owned by all sources are used, but there are some requirements that are not discussed on several sources. Especially the contents of tourism that it only required if the specific case study towards the tourism sector, would be an important thing for the preparation of quality requirements. Based on all the stages that have been done before, and then we analyze it to propose a new quality requirement. Proposed quality requirements for mobile educational game that specific to tourism case study are show on Table V. It contains the proposed quality requirements for mobile educational game with a case study of tourism. So in designing and developing mobile educational game later, these quality requirements can become one of factor to be good quality software. Because of the good quality software is start from the design stage, not only during the implementation or development, even when they are published to the user. Table 5. Proposed Quality Requirements for Mobile Educational Games with Tourism Case Study No. Quality Requirements 1 Game provides a clear goals 2 Game is easy to understand 3 Game can be played in a short time 4 Game have complete features 5 Control of the game has been consistently in according with the standards 6 Screen layout is comfortable to be seen 7 Audio of the game was comfortable and supportive with a good game 8 The mobile device screen is appropriate to the game 9 The experience of playing is Fun 10 Storyline or scenario of the game is interesting 11 No repetition that make the game boring 12 Game control is appropriate and flexible 13 Players gain knowledge from the game 14 Game is simple but meaningful 15 Content on tourism must be update 16 Language usage appropriate to target of player 17 Having educate messages behind the entertainment given Based on the analysis and evaluation, the conclusions of this research are software quality requirements especially in the game are heavily dependent on type and case studies that will be develop. Software quality requirements can be composed of any various kinds of input, not only from the existing criteria, but also can be collected based on user feedback and the specific requirements of stakeholders that will use the software. Quality requirements for mobile educational game on tourism case studies has been built specifically based on the criteria that collected to build a good quality software. The proposed quality requirements can become a reference in building software educational game design since the beginning, so the quality of mobile educational games already maintained earlier. For future research, the proposed quality requirements should be performed a validation testing on the feasibility, so that it can be more confirmed as good quality requirements. And the proposed quality requirement can be a reference to build a quality model with specific quality factors and complete metrics to evaluate the mobile educational game software, so it can measure how much the quality value of a mobile educational game in tourism theme. Acknowledgment We would like to thank to Politeknik Caltex Riau to Support this research, also to Riau Province and Pekanbaru Citys Tourism Ambassadors Bujang-Dara to help us with very generous discussion and feedback. References Clearwater, D. A. (2011). What defines video game genre? Thinking about genre study after the great divide. The Journal of the Canadian Game Studies Association, 5(8). Trisnadoli, A., Hendradjaya, B., Danar, S. W. (2015). A proposal of quality model for mobile games. In ICEEI 2015 International Conference. IEEE. Trisnadoli, A. (2015). Software quality requirement analysist on mobile game based software (Analisis kebutuhan kualitas perangkat lunak pada software game berbasis mobile). Journal of Applied Computer (Jurnal Komputer Terapan), 1 (2). Sà ¡nchez, J. G., Simarro, F. M., Zea, N. P., Vela, F. G. (2009). Playability as extension of quality in use in video games. Proceedings of 2nd International Workshop on the Interplay between Usability Evaluation and Software Development (I-USED). Ponnada, A., Kannan, A. (2012). Evaluation of mobile games using playability heuristics. Proceedings of the International Conference on Advances in Computing, Communications and Informatics (pp. 244-247). ACM. Hussain, A., Kutar, M. (2008). Usability metric framework for mobile phone application. In Conference Information Integration and Web-based Applications Services. ACM. Jeong, E. J., Kim., J. (2009). Definitions, key characteristics, and generations of mobile games. Mobile Computing: Concepts, Methodologies, Tools, and Applications. Monash University Korhonen, H., Koivisto, E. (2006). Playability heuristic for mobile game. Proceedings of the 8th conference on Human-computer interaction with mobile devices and services. ACM. Nantes, A., Brown, R., Maire, F. (2008). A framework for the semi-automatic testing of video games. In AIIDE. Nayebi, F., Desharnais, J. M., Abran, A. (2012). The state of the art of mobile application usability evaluation. Proceedings of 25th IEEE Canadian Conference on Electrical and Computer Engineering (pp. 1-4).IEEE. Salmre, I. (2005). Writing mobile code: Essential software engineering for building mobile applications. Addison-Wesley Professional. Sugihartono, Fathiyah, K. N., Setiawati, F. A., Harahap, F., Nurhayati, S. R. (2007). Psychology of Education (Psikologi Pendidikan). UNY Press. Handriyantini, E. (2009). Computer Based Educational games for Elementary Student (Permainan edukatif berbasis komputer untuk siswa sekolah dasar). Malang: Journal of STIKOM Indonesia (Jurnal STIKOM Indonesia). Harahap, Y. M. (2015). Design of Educational Game as a Learning Media for Preschool Children with Adobe Flash CS 5. SP (Perancangan Game Edukatif Sebagai Media Pembelajaran Pada Anak Usia Dini Dengan Adobe Flash CS 5. SP) Mathematics, USU. Hurd, D., Jennings, E. (2009). Standardized Educational Games Ratings: Suggested Criteria. Scientific Paper. Dondlinger, M. J. (2007). Educational video game design: A review of the literature. Journal of applied educational technology, 4(1), 21-31. Authors biographies Anggy Trisnadoli obtained his B.Sc. degree in Informatics Engineering from Politeknik Caltex Riau in 2011, a M.Sc. also in Informatics Magister from Bandung Institute of Technology in 2015. He has worked as a lecturer in Politeknik Caltex Riau from 2012. Currently, he is lecturing in Information System, Computer Department of Politeknik Caltex Riau, Indonesia. His research interests are in games, mobile application, 3D Animation and Multimedia Software. His email address is [emailprotected] Istianah Muslim is a lecturer in Information System Department in Politeknik Caltex Riau. She received her Master of Industrial Engineering from Institute of Technology Sepuluh Nopember in 2013. Her research interests are in the area of human factor, ergonomic, safety and health, supply chain management, production planning and Design Product. Her email address is [emailprotected] Wenda Novayani is a lecturer in Computer Engginering Department in Politeknik Caltex Riau. She received her diploma degree in Computer Engginering from Politeknik Caltex Riau in 2006 and B.Sc degree in Electrical Engginering from Intitute Teknologi Bandung in 2013.

Black Rook in Rainy Weather Essay

I an infrequently lost for words. I like to think of myself as quite an eloquent and articulate speaker and writer, but there are times when I feel neither. It is ironic that the very subject of this poem, a lack of words, or rather a lack of inspiration, is exactly what is holding me back from writing the things I would like to write. Although I know how this poem makes me feel and I know the emotions it conveys, I cannot bring myself to write about them or to speak about them, I simply cannot find the words. Each time I read the poem a rush of thoughts dash through my mind, so quickly that I cannot recollect them in time to consider them in the detail they deserve. This poem deserves consideration, thought, analysis, it deserves appreciation and admiration, because it describes exactly how even the most expressive and eloquent writers are sometimes at a loss for words. Although the poem is a metaphor and is about many things that lie deep beneath the surface of the words, it is beautifully written even in the most literal terms. Plath uses adjectives to describe every object, every movement of the poem, ‘stiff twig’, ‘spotted leaves’. She uses many other poetic devices, such as alliteration in the lines ‘rare, random’, ‘walk wary’, ‘so shine as to seize my senses’ and personification in the lines ‘mute sky’ , ‘minor light may still lean incandescent’. The poet also uses short phrases broken by commas to increase the tempo of the poem and to give it a rushed feeling. However, these poetic devices are not simply used to embellish a purely literal piece of writing. They are used to demonstrate the beauty of the mundane, the magnificence of the ordinary. The poet says ‘I do not expect a miracle or an accident’ which suggests that she is content with the mundane and can see it’s splendour. But as the poem progresses we see that she could not survive on the ordinary, but needed to express herself in her poetry and needed inspiration to do so. Though Plath tries to persuade herself she survive on the ordinary and the imple, it is obvious that desire for inspiration, ‘the angel’, are the only things that can make these mundane situations bearable. She contradicts herself when she states that ‘miracles occur. ’ She contradicts her previous idea that there is beauty in the ordinary and instead describes moments without inspiration being similar to ‘trekking stubborn through this season of fatigue’ . This suggests that during these periods of time she is not living, but barely surviving. Her entire life depends on the moments of inspiration, ‘for that rare, random descent. ’ She is a poet, and her survival depends on her writing. She can only express herself through her writing, and without it, without her inspiration, she feels nothing. This nothingness, this lack of inspiration is to her far worse than the feelings of depression she felt constantly throughout her life. Her ‘fear of total neutrality’ consumes her and scares her. This ‘fear of neutrality’ refers not only to writing, but also to life in general. If one feels nothing, if life is constantly similar to ‘trekking stubborn through this season of fatigue’ then there is no reason to live in the first place. Life is a constant wait for inspiration, for meaning, for purpose, and often this purpose does not appear. Plath realises, unlike many others, that without purpose, without inspiration, there is no beauty in the mundane. Without ‘that rare, random descent’ of an ‘angel’ there is little reason for life at all.

Catcher in the Rye Essay

Is Holden Caufield, out of the novel catcher in the rye written by J. D. Salinger insane in a sane world or sane in an insane world? But really what defines sane and insane this is what will be brought to attention through out this essay. According to the dictionary definition insane is some one of a not sound mind, mentally damaged or deranged or utterly senseless. Other definitions state that insanity craziness or madness is a spectrum of behaviour characterised by certain abnormal mental or behavioural patterns. Insanity may manifest as violations of societal norms, including a person becoming a danger to them selves or others. Where as sanity is defined as free from mental damage derangement, having a sound and healthy mind mind, having or showing reason, sound judgment or good sense. But in my opinion insanity is just some one out side of the norm in society’s narrow minded views. Some one who is differentiating in there points of view from what has be come the strait and normal. Society has drawn these box out lines of what is sane and in sane especially in the era that Holden grew up in. Holden is a basic young boy who differentiates from the norm a little in his characteristics, he is a little bit more head strong and aware of the realities of the world and portrayed society. Though he is generally of a rational sane mind at the beginning of the book there are a few occasions where the cracks start to show and you can catch glimpses of his â€Å"insanity† can be seen such as when Stradlater takes Jane out one night on a date and Holden states that though he has a few blank patches of memory he can remember being by the window staring out at nothing consumed in worry and dark thoughts, when Stradlater returns that night Holden shows uncharacteristic anger and rage that he can not contain resulting in him hitting Stradlater in the side of the head and when Stradlater holds him down Holden screams vulgar profanities at him in a fit of rage.

Research and analysis in applied accounting - Free Essay Example

Sample details Pages: 20 Words: 5850 Downloads: 3 Date added: 2017/06/26 Category Statistics Essay Did you like this example? I. INTRODUCTION a. Topic Chosen and its context In this Research and Analysis project Report, I will be analyzing the financial performance of Ââ€Å"Royal Dutch Shell Plc†. Don’t waste time! Our writers will create an original "Research and analysis in applied accounting" essay for you Create order I will be identifying and analyzing the factors effecting the financial position of Royal Dutch Shell plc. The role of non-financial performance indicators which effects the financial position of the company will also be kept in mind. I will analyze the financial position of the company compared to its performance with previous years, with the industry and with its rival (BP). The word Shell will be used in place of Royal Dutch Shell as it is convenient. I will base my comparison on figures of audited annual accounts for the last 3 years. Financial analysis is an effective way of analyzing companyÂ’s performance. Ratio Analysis is the technique, which will mainly be used for financial analysis. My analysis will also be based upon the comparison of key ratios with main rival of Shell, which will indicate some of the core strategies in seeking a competitive position to achieve its purposes. I will use ‘Life CycleÂ’ model to analyze my findings on those markets, which materially contribute towards the companyÂ’s financial results. Then I will use PEST analysis to analyze different stages identified and nature of ‘Life CycleÂ’. My conclusions will be based on current situation of the company as compared to past years and future expectations using the techniques mentioned above. b. Reasons for selection Reasons for selection of the topic and organization are as follows:  § Wide Information base: Shell, being a public limited company and one of the largest oil and gas concern in the finance sector the availability of timely, relevant, reliable information was an added advantage.  § Relation to my studies: While studying my ACCA, one of the important skills which I have learned is the ability to analyze the financial statements, and such a comprehensive research and analysis project will definitely help in developing the same  § The company: Ââ€Å"Other reason is the investment prospective and size of the company. The company unveiled the largest expenditure program in its history, spend $36bn in 2008 compared to $25bn last year, as it seeks new sources of oil and gas to boost reserves and production and to better exploit its existing resources†. (Ft.com, July2008) Ââ€Å"Standard Poors, the credit ratings agency, downgraded its long-term rating for BP, the Oil and Gas Company, and upgraded Royal Dutch Shell, BPs closest rival, illustrating the widening perception of the two companyÂ’s circumstances. SP noted Shells reserves replacement success and said current major projects should sustain its production plateau in the next decade†. (Ft.com, September 2008) c. Aims and Objectives The aims and objectives contains the comparison of the financial performance of the petroleum sector to assess the worth of the company in its operational industry .To get an idea about the attitude of the management towards the operations of the company by assessing the companyÂ’s cash flow position compared to its profits. Also to analyze the risks faces by the company I will take in to account Solvency, Liquidity and Capital structures. d. Research Approach ACCA provides a complete guide about different sections of the report, and also this provides the opportunity to plan and think to allocate my time carefully. This planning will help me to concentrate on each section of the report so that I can focus on core and important areas of the report. This also enables me not to overspend my time in explaining any section of the report. Information mainly collected from annual reports of the company and also different sort of other sources like ACCA text books, internet, newspaper, library etc. Traditional ratio analysis has been used to measure and compare the financial performance of the company over last 3 years with its rivals. Ratio analysis will focus on the following key ratios:  § Profitability Ratios This ratio is the reflection of how well the business is performing in term of profits in order to pay the shareholders. Key ratios are: a. Gross Profit Margin b. Operating Profit Margin c. Return on Average Capital Employed  § Liquidity Ratios Liquidity ratio refers to the state of an assetÂ’s nearness to cash to meet business short term obligations as they fell due. Key ratios a. Current Ratio b. Quick ratio (Acid Test Ratio)  § Efficiency Ratios These ratios show how efficiently the business is employing those resources invested in fixed assets and working capital. Ratios are: a. Debtor Days b. Creditor Days  § Risk Ratios These ratios are used to assess how healthy and sound the business is in term of capital or finances. Ratios are a. Gearing Ratio b. Interest Cover  § Investors Ratios Both present and prospective shareholders look at these ratios to measure their return and to make economic decisions. Key ratios are a. Earnings per Share b. Diluted Earnings per Share II. INFORMATION GATHERING a. Sources of Information Used The information has been collected from different secondary sources for the preparation of this project. Main secondary sources which are use to gather information is as follows:  § Annual Accounts: The annual audited accounts of Shell are the main secondary source of information to use in this project. These annual audited accounts were available from stock exchange. As it supposed to be accurate and reliable thus provides me with an ideal source of annual accounts of the company. I have used only the audited annual accounts for the last three years of the company though unaudited quarterly review until July was available, to make certain that only reliable and accurate source of information is used in my research and analysis project. These audited annual accounts provides me all the information for the last three years which is essential in computing key financial ratios and also to make a comparison with rivals and industry averages of the company. Annual accounts of the rivals for the last three years are also used to make comparison with the Shell.  § Financial AnalystÂ’s Report: They are professional people and their views are independent and their analysis helped the shareholders making economic decisions, which in turns affects the very existence of the company.  § KaplanÂ’s Tutorial Text: KaplanÂ’s tutorial text for Bsc (Hons) in Applied Accounting also helped me a lot for gathering information and also about the different requirements of the reports. It also helped in focusing a particular section of the report and also helped in overall design of the project so that nothing is missing in the project.  § News Papers: Getting in touch with the business section of leading newspapers like The Times, The Independent, Daily Express and The Telegraph was very useful as it provided me guidance on the economy overall and as well the movement in the share prices of different companies. b. Methods Used To Collect Information To collect information various methods are used like,  § Internet: Ââ€Å"Internet offers a speedy and impersonal way of getting to know the basics of the services that a company provides†. (BPP 2005 Paper 3.4) I visited www.shell.com to access the financial reports of the company and press releases. I also visited www.bp.com to get information about the rival company of Shell for the purpose of comparison. Also I visited www.ft.com which really helped me a lot for the up to date information about the Shell and BP. I have also visited www.wikipedia.org to get information which helped me a lot to understand the oil and gas industry. In addition I visited the www.bbc.co.uk to get the latest news and important interviews.  § Use of the E-mail: For communication with Shell people I use to e-mail them during my research whenever I want to get some important information. They responded quickly to answer my query.  § Library Research: Libraries proved quite helpful so some libraries in London, Kaplan Financial College library and City Business Library in Moorgate London for general reading of the newspapers, journals, different books, magazines to get important information about Shell and BP. I spend most of my time in city business library, where I was able to get specific information through different CD ROMS which included different databases search designed specifically for getting information about different companies. Some of the CD ROMs are:  § Financial Analysis Made Easy: This database provided the detailed key financial data in the form of profit and loss accounts and the balance sheet. Also it helped me to get important ratios of the Shell and BP and their comparison with the preceding years in the form of graphs.  § Marketing and Business Information Centre (Data Monitor): This database provided vital information regarding the company, industry and market news for the research and analysis. This database contains records of hundreds of companies in UK and worldwide. When I looked at the Shell data, it really helped me by providing the overview and the detailed information. Then same thing was true for its rival BP. c. Limitations in the Information Gathering A number of difficulties I have faced sometime in getting the required information. For instance, I was expecting to get more information from the newspaper, but actually it was not. The newspaper only provides information about a particular date and some events but in depth information cannot be obtained and also articles are found in different newspaper i.e. nothing is new than others. Similarly when I went to City library, I was not aware of using FAME database, so when I tried to get information from database it took me too long. Moreover it only provides me the financial data in the form of graphs. Another problem which I have faced is the information overload on the internet. Whenever I tried to search something on the net it gives me too many results which some time confused me which information I should use and which is not. d. Accounting Technique Used and Limitations In this report to analyze the financial performance of Shell comparing to BP ratio analysis has been used. Ratios are important tool in analyzing the financial performance of the company. Ratios are used because shareholders and potential investors are primarily concerned with receiving an adequate return on their investment. An earnings per share is a key ratio that is to be used to determine the returns on shareholderÂ’s fund. Suppliers and lenders are concerned with the security of their debt or loan. So they are mainly focused on the gearing level the company is having and also the interest cover. More over management is concerned with the trend and level of profits, so ratios are the main measure of the success. Furthermore, managementÂ’s bonuses are linked to the profits of the company. I have calculated the key ratios in an appendix from 2006-2008 for Shell and BP and they did analyze the results. Ratios were used as a tool to assist analysis and to focus attention systematically on important areas. Ratios summarize information in an understandable form and also helped me to identify trends and relationships. Ââ€Å"There are also limitations of financial statements and ratio analysis as they are based on the past and ratios are not predictive if they are based on historical information. Ratios ignores any future action which is or to be taken by management. Another limitation faced by ratio analysis is the fact that the ratios results may be distorted if there are differences in the accounting policies†. (Kaplan Financial Study Text Paper F7) In all, Ratios have limitations but are still regarded as the best tool for analyzing the financial performance of the business and so I also used it. III. ANALYSIS In this section of the report I will explain and analyze the financial performance of Shell and will compare its results with BP.I will also explain ShellÂ’s financial position in the current year. a. Company History: Ââ€Å"The Royal Dutch Shell Group was created in February 1907 when the Royal Dutch Petroleum Company and the Shell Transport and Trading Company Ltd of theUnited Kingdommerged their operations. This move was largely driven by the need to compete globally with the predominant American oil company† (www.wikipedia.org) b. Financial Analysis: Here is the analysis of the financial data of Shell (Revenue, GP and NP) over the last three years.  § The revenues in 2008 were ($458.4 billion) 28.8% higher than in 2007, when they were ($355.8 billion) 11.6% higher than in 2006. (Appendix)  § The oil and gas prices was One of the main reasons of increase in revenues in 2008  § Ââ€Å"Brent crude oil prices average $97.14 per barrel in 2008 compared with $72.45 in 2007, while West Texas Intermediate average $99.72 per barrel compared with $72.16 a year earlier. Oil prices saw great fluctuation in 2008†. (Annual Report Shell 2008)  § A 6% increase in Gross Profit of Shell in year 2008 and 2007 as compared to gross profit in year. (Appendix)  § Its shows an increase in production costs in line with increase in revenues on high margin products.  § Earnings ($26.5 billion) were lower by 17% in 2008 compared to 2007, when they were ($31.9 billion) 21% higher than in 2006 ($26.3 billion). (Appendix) Ââ€Å"The decrease in 2008, compared with 2007, reflected the effect of declining oil prices on inventory in the second half of the year, lower production volumes, lower realised refining margins and higher operating costs. These more than offset the positive impact on earnings from higher realised oil and gas prices as well as higher LNG and GTL product prices†. (Annual Report Shell 2008) Ââ€Å"Second quarter 2009 reported earnings were $3,822 million compared to earnings of $11,556 million in the same quarter a year ago†. (2nd quarter results 2009, www.shell.com )  § Earnings By Business Segments : All figures in this table are in $million The table shows that earnings in 2008 were higher by 47% in Exploration Production, Gas Power and Oil Sands segments as compare to 2007. On other hand earnings were lower by 100% in 2008 as compare to 2007 in Oil Products, Chemicals and Corporate segments. This 100% reduction in last three segments causes overall reduction of earning in 2008. Ââ€Å"In the Second quarter Exploration Production segment earnings were $1,334 million compared to $5,881 million a year ago. Earnings compared to the second quarter 2008 reflected the impact of significantly lower oil and gas prices on revenues, lower oil and gas production volumes, higher exploration expenses and non-cash pension charges, which were partly offset by lower royalty and tax expenses†. (2nd quarter results 2009, www.shell.com ) Comparison of Shell with BP  § Revenue Growth: Shell and BP revenue over the last three years is shown in the graph: Growth in Revenue in $ Million Shell and BP revenue showed a consistent growth over a period of 3 years. In 2008 Shell revenue 26.9% higher than BP. Which shows that Shell growing consistently as Shell revenue were higher 25.2% 19.9% from BP in 2007 2006 respectively. (Appendix) a. Profitability Ratios Ââ€Å"The profitability of a company is important and a key measure of its success. The figures shown in the profit and loss account mean very little themselves. However, by expressing them as a percentage of sales they become much more useful. The figures can then be compared with previous years or with other similar companies†. (Student Accountant ACCA Magazine, Ââ€Å"Christopher†, 1999.) Gross Profit Margin: Gross profit margin shows earning on sales of a company. In the 2nd quarter of 2009 the gross profit margin has fallen 62% compared to last yearÂ’s 2nd quarter results. An indication of high profit margin is that the company earned well on sales by keeping overhead cost in control. Gross profit margin of 2008 is lower than previous years. Net Profit: Shell net profit margin dropped by 3.2% to 5.8% in 2008 from 9% in 2007. And margin in 2006 was 8.3%.BP net profit margin dropped by 1.5% to 5.9% in 2008 from 7.4% in 2007. The 2006 margin was 8.4%. (Appendix) Growth in Net Profit Shell and BP (%) The profit margin is mainly used as an internal comparison tool. As there are different levels of expenditure involved it is therefore sometimes difficult to accurately compare the net profit ratio for different entities. As compared to BP ShellÂ’s net profit margin dropped by a higher percentage in 2008.On the other hand if we see the year 2007 the Shell profits are higher than the BP. Return on Average Capital Employed: ROACE reflects the ability of the company to utilize the resources i.e. capital in generating revenue. Capital employed consists of total equity, currant debt and non-current debts. The published segment level contains the computation and calculation of the tax rate and the minority interest components. The strong income generation is the only reason for change in ROACE from18% to 24% between 2006 and 2008. Ââ€Å"There is a significant decrease in the capital employed from 24% to 18% in 2008 as compare to 2007. A significant decrease in income attributable to shareholders is partly offset by an increase in capital employed, resulted in a decrease in ROACE of 6.0% in 2008(18%) compared to 2007 (24%). The 2006 figure was 23%†. (Appendix and Annual Report Shell 2008) Ââ€Å"ROACE is defined as the sum of the current and previous three quartersÂ’ income adjusted for interest expense, after tax, divided by the average capital employed for the period. In the 2nd quarter or 2009 the ROAC stands at 8.3% way below the 25.8% in the 2nd quarter of 2008†. (2nd quarter results 2009, www.shell.com ) On the other hand BP utilization of its capital resources was showing a sorry picture. BP ROCE has moved in a range of 16% to 19% between 2006 and 2008. BPÂ’s ROCE was 19% in 2006, and then reduced to 16% in 2007, followed by an increase of 1% to stand at 17%. This was due to lower income attributable to shareholders in 3 years time. This increase in 2008 was due to some increase in income attributable to shareholders. (Appendix) ROCE Shell and BP (%) The drop in oil price in the second half of 2008 had a significant impact on earnings. The strengthening of the dollar against other main currencies reduced the impact of ShellÂ’s investment plans on capital employed. b. Efficiency Ratios Debtor Days ShellÂ’s receivable days has fallen from 76 days in 2007 to 65 days in 2008. The figure for 2006 was 68 days. This was due to the effective and better controlled credit policy. (Appendix) BP on the other hand, showed increase in its collection to 30 days in 2008 from 49 days in 2007. The 2006 figure stands at 53 days. All this reflected an aggressive and comprehensive credit control policy and ability to collect from customers. (Appendix) Creditors Days The payment to creditors from Shell showed improvement in payment to creditors in 2008 if we compare the figures to last three years. As creditors days reduced to 78 days in 2008 from 93 days in 2007, while the figure in 2006 was 87. This improvement shows that company has liquidity to pay off its debts and also helped in making stronger relationship with creditors, which could be Suppliers, lenders. (Appendix) BPÂ’s creditorÂ’s days showed reduction over a period of 3 years i.e. from 82 days in 2006 to 78 days in 2007 and more improved to 46 days in 2008 which showed a good sign for the company. (Appendix) c. Liquidity Ratios Current Ratio Ââ€Å"As short-term creditors prefer a high current ratio since it reduces their risk. The current ratio measures the adequacy of current assets to meet the companyÂ’s short-term liabilities as they fall due. Traditionally, a current ratio of 2:1 or higher was regarded as appropriate for most businesses to maintain creditworthiness. However, more recently a figure of 1.5:1 is regarded as a norm†. (Kaplan Financial, Paper F7 Study Text) Current ratio for Shell in 2008 was 1.1 and remained Constant between 2006 and 2007 to stand at 1.2. This shows better position for Shell and its ability to pay short term liabilities as they fall due. (Appendix) BP current ratio was also healthy between 2006 and 2007, but in 2008 the ratio was below 1 which may be not a good sign for short term creditors. But it was ok as for as it remains near to 1. (Appendix) Ââ€Å"One drawback of the current ratio is that inventory may include many items that are difficult to liquidate quickly and that have uncertain liquidation value. SO the quick ratio is an alternative measure of liquidity that does not include inventory in the current assets†. (Paper3.6, BPP Professional Education, June 2007) Quick Ratio Ââ€Å"The quick ratio also known as the acid test ratio eliminates inventory from the currant assets. It provides the acid test of whether the company has sufficient liquid resources (receivables and cash) to settle its short term liabilities. Normal level for quick ratio ranges from 1:1 to 0.7:1†. (Kaplan Financial, Paper F7 Study Text) For Shell, liquidity ratio remained unchanged within the industry standards between 2006 and 2008 to stand at 0.9. This shows the companyÂ’s ability to pay short liabilities from most liquid resources i.e. receivables and cash not inventory. (Appendix) BPÂ’s quick ratio showed a sorry picture and remains unchanged on 0.7 between 2006 and 2008, as it was standing at the danger level of 0.7 meaning that BP is not having enough liquid resources to pay off the liabilities due. (Appendix) d. Risk Ratios Gearing: Ââ€Å"Gearing is the relationship between the companyÂ’s fixed return capital and its equity capital. Gearing ratio indicates the degree of risk attached to the company and the sensitivity of earnings and dividends to change in profitability and activity level. High geared businesses uses large proportion of fixed return capital, so there are greater chances of insolvency and ultimately return to shareholders grow proportionately more if profits are growing. While low geared businesses provide scope to increase borrowings when potential profitable projects are available and can usually grow more easily†. (Kaplan Financial, Paper F7 Study Text) Gearing levels in (%) (2006-2008) Shell maintained smooth profits and more suitable assets for security in order to make use of gearing successfully. ShellÂ’s gearing level increased in 2008 due to more debts taken as compared to 2006 and 2007. Gearing was 23% in 2008 compared to 17% in 2007. The gearing ratio was 15% in 2006. The increase was due to rise in the total debt. On the other hand, BP gearing level was also high standing between 36% to 28% with 36% in 2008 compare to 28% in 2006, while 2007 figure was 33%, which is higher than Shell. High level of gearing means high risk to business, but this is compensated by a significant increase in profits and the returns to the shareholders. So Shell can borrow more easily in future. Interest Cover Ââ€Å"CompanyÂ’s interest cover indicates the ability to pay interest out of profits generated. Low interest cover indicates to the shareholders that their dividends are at risk (because most profits are use to pay interest payments) and the company may have difficulty financing its debts if its profits fall†. (Kaplan Financial, Paper F7 Study text) ShellÂ’s interest cover has decreased to 42 times in 2008 compared to 45 times in 2007. The interest covers for 2006 was 38 times. This shows ShellÂ’s ability to finance its debts and the ability to pay interest out of the profits for sure. As investors are interested in the risk level the company is in, it is a healthy sign. Interest Cover in Times (2006-2008) For BP, there is an increase of interest cover to 30 times as compare to 29 times in 2007 but in 2007 there is a huge reduction in interest cover to 29 times from 49 times in 2006 which clearly indicates the inability of BP to finance its debt and to pay interest out of profits generated. That makes BP riskier than Shell for investment purposes. e. Investors Ratios Earnings per Share (EPS): Ââ€Å"Earnings per Share for Shell decreased in 2008 from $5 in 2007 to $4.27 in 2008. This was due to decline in profits followed by the repurchase of the shares, which causes a net decrease of 105 million in the number of ordinary shares outstanding as a result of share buybacks. As widespread the use of the EPS as a yardstick for investment decisions. Share price of company might fall if it looks as if EPS is going to be low. EPS increased to $5 in 2007 compared to $3.97 in 2006, this was due to decrease in the number of ordinary shares in 2007 as company repurchased its 112 million shares of common stock for cancellation at a gross cost of $4.4billion.this purchase reduced the number of shares outstanding to 1.7% in 2007 and by 7.3% in total since the commencement of share repurchases following the unification into Royal Dutch Shell and successful completion of Royal Dutch Minority tender (August 2005)†. (Annual Report Shell 2008) Ââ€Å"In the first six months of 2009 the EPS for Shell is $1.19 compared to the six month figure of $3.34 of the same period of 2009 (2nd quarter results 2009, www.shell.com ) Earnings Per Share in $ (2006-2008) Ââ€Å"BPÂ’s Basic Earnings per Share increased in 2008 to $1.13 from $1.09 in 2007. This was due to the appreciation in the profits followed by the repurchase of shares, which causes a net decrease of 373 million in the number o shares. Basic EPS decline by 0.01 to stands at $1.09 in 2007 compared to $1.10 in 2006. This was due to the declining of profits of BP†. (BP Annual Report 2008) Diluted Earnings per Share(DEPS) : Ââ€Å"Diluted Earnings Per Share attempts to alert the shareholders to the potential impact on the Earnings per Share due to change in equity share capital in future owing to circumstances which exist now-known as dilution. The most common type of dilution is an option or warrant which gives the holder right to buy shares at time in future at predetermined price†. (Kaplan Financial, Paper F7 Study Text) Diluted Earnings Per Share in $ (2006-2008) ShellÂ’s DEPS reduced due to the reduction in the profits and number of shares to $4.26 in 2008 compared to $4.99 in 2007, while it was $3.95 in 2006. BPÂ’s DEPS increased to $1.12 in 2008 from $1.08 in 2007. The figure was $1.09 in 2006. The main reason for this was increase in profits despite shares in numbers was reduced. (Appendix) f. Cash Flow Statement: ShellÂ’s cash flow from operating activities has increased by 27% reaching a record level of $43.9 billion in 2008 compared with $34.5 billion in 2007 and $31.7 billion in 2006. This improvement in cash flow from operations was a result of reduces working capital in 2008 compared to 2007. The increase in the operating activity in 2007 mainly because of increase in income as well as a reduction in taxation paid in 2007 compared to 2006. Ââ€Å"In 2009, ShellÂ’s cash flow from operating activities reduced in the first two quarters to stands at $8478 million compared to $21,030 million in the same period of 2008†. (2nd quarter results 2009, www.shell.com ) Ââ€Å"BPÂ’s cash flow from operation declined to $24.7 billion in 2007 compared to $28.2 billion in 2006, but the cash from operating activity increased in 2008. This is menially because of increase in income†. (BP Annual Report 2008) Higher capital expenditure in 2008 compared to 2007 made Shell to use its Cash flow in investing activities i.e. $28.9 billion in 2008 compare to $14.6 Billion in 2007. Ââ€Å"In 2009, Shell continued to invest more with cash flow from investing activities stands at $(13,829) million in six months from $(12,275) million in 2007†. (2nd quarter results, www.shell.com) Ââ€Å"But there was less cash paid out in investing activity in 2007(-14.6 billion) as compare to 2006(-20.9 billion) and the main reason was that the proceeds from sale of asset was higher and les capital expenditure in 2007 as compare to 2006†. (Shell Annual Report 2008) Ââ€Å"BP was also having strong investment with $(22.8) billion in 2008 from $(14.8) billion in 2007. The figure for 2006 was $(9.5) billion†. (BP Annual Report 2008) In 2008, as Shell took more debts which results in ShellÂ’s cash flow from/used in financing activities reduced to $(9.4) billion in 2008 from $(19.4) billion in 2007.As Shell acquired Canada minority interest in 2007 resulting Cash flow from financing activity increased in 2007 from (13.7) billion in 2006. Ââ€Å"There was a small increase of BPÂ’s Net cash flow from/ used in financing activities from (9.0) billion in 2007 to (10.5) billion in 2008 menially because of more dividends paid and less repurchase of shares in 2008. Net cash from financing activities was reduced to $(9.0) billion in 2007 from $(19.0) billion in 2006†. (BP Annual Report 2008) Cash and Cash Equivalent of Shell and BP in Billions Ââ€Å"Cash and Cash equivalent of Shell reached 15.2 billion at the end of 2008, up by 57% as compare to 2007 figure of 9.6 billion. Which is good sign for Shell as there cash and cash equivalent was higher as well in 2007 as compare to 2006 figure of 9.0 billion. BPÂ’s cash and cash equivalent also increased to $8.2 billion in 2008 from $3.5 billion in 2007 and also up from 2006 level of $2.5 billion†. (Shell and BP Annual Report 2008) This shows that Shell has a sound position and has no problem what so ever in cash flow compared to its rivals. c. Non-Financial Analysis In this section of the report I will be analyzing the corporate social responsibility and the SWOT analysis. Corporate Social Responsibility (CSR) Ââ€Å"We recognise that our continuing business success depends on helping to meet the worldÂ’s growing energy needs in environmentally and socially responsible ways. To manage todayÂ’s business risks and deliver our strategy, it is critical that we maintain the trust of a wide range of stakeholders†. (Shell Annual Report 2008) Environmental Social performance Greenhouse Gas Emissions Ââ€Å"In 2008 despite growing business, Shell operated facilities emitted 75 million tons of GHGs, (measured on a CO2 equivalent basis), about 7 million lower than the previous year, and nearly 30% below 1990 levels†. (Shell Annual Report 2008) Flaring Since 2001, Exploration Production has reduced its natural gas flaring by more than 70%. In 2008, total flaring in Exploration Production dropped again mostly due to reduces flaring in Malaysia and Gabon, as investment and operational improvement programs showed result. In 2008 flaring levels in Nigeria were same as in 2007. Spills Shell has reduced the amount of oil and oil products spilled from operations for reasons, Shell can control, like corrosion or operational failures. Spills from sabotage or extreme weather, like hurricanes, which are harder to prevent, have fluctuated with events. In 2008 the number and amount spilled for operational reasons dropped again. Accident and Injuries Rate Ââ€Å"In 2008 26 people lost their lives working for Shell. That was five more than in 2007. Shell has improved in its accident on sites and injuries to staff by 50% reduction in it compared to 1999 by staff training and better working conditions†. (Shell Annual and Environmental Report 2008) SWOT Analysis Ââ€Å"SWOT analysis is a critical assessment of the strengths and weaknesses, opportunities and threats affecting an organization to establish its strategic goals and objectives, taking into account the environmental conditions. Strength and weaknesses analysis involves looking at the particular strengths and weaknesses of the organization itself and its product/service range. It is an internal appraisal. An analysis of opportunities and threats is con concerned with profit-making opportunities in the business environment, and with identifiable threats. It is therefore an external appraisal†. (BPP study text 2007, paper P3) Strength Ââ€Å"Shell strong financial position and manpower strength which dominate Shell as compare to their rivals. Shell invested more in 2008 as compared with last year, as it seeks new sources of oil and gas to boost reserves and production and to exploit existing resources better†. (www.ft.com 1-08-2008) Ââ€Å"Shell is world leader in oil and gas with technological advancement and project management skills and operations in 37 countries and majority interest in 40 refineries worldwide. The company is ranked third in 2008 Fortune Global 500 ranking†. (City Business Library DATAMONITOR) Weaknesses Ââ€Å"Hydrocarbon production has shown a decline in recent years due to the fields decline. Furthermore, natural gas production was also affected by declining fields in Malaysia, US, UK and Canada. This would adversely affect ShellÂ’s revenue. In 2008, Shell paid $120 million to settle a class action lawsuit led by the Pennsylvania State Employees Retirement Board due to the overstating oil and natural gas reserves and inflating stock prices from April 1999 to March 2004†. (City Business Library DATAMONITOR) Opportunities Ââ€Å"In order to cope up with worlds demand for energy, Shell is expanding business particularly in Asia. In 2008, Shell signed joint venture with Qatar and China, which would build an oil refinery and petrochemical products manufacturing complex in China†. (City Business Library DATAMONITOR) Ââ€Å"Shell is the latest company to invest in AustraliaÂ’s coal bed methane industry to develop projects in Australia and internationally†. (ft.com, June 2 2008) Threats Ââ€Å"Worlds energy demands on the rise, by 2015 easily accessible oil supplies of oil and gas will no longer keep up with demand†. (www.express.co.uk, 26 January 2008) Ââ€Å"Disruption in Nigeria has badly affected ShellÂ’s business. Nigeria is the worlds eighth-biggest oil exporter; however, the violence in the country affected the industry with the output cut by a fifth since early 2006, thus increasing the oil prices above $100 per barrel in 2008. In Nigeria, ShellÂ’ pipelines were attacked by the residents†. (bbc.com, 20-06-2008) IV. Conclusion: Shell is having a strong growth in its business throughout the world between 20062008 and this continues in 2009 as well. This growth is attributed to number of factors including high revenue generation, more investments and thus rising profits particularly in last one year. Moreover, ShellÂ’s ability to expansion in different continents of the world with 42% in Europe, 25% in Asia, Africa and Australia, 25% in America and 8% in other America is also a main factor in its growth. ShellÂ’s sales revenue has gone up by nearly 11.6% in 2007 and 28.8% in 2008.In 1st six month of 2009 its sales revenue has affected due to world economic slowdown and reduced to 49.7% compared to 1st six months of 2008. ShellÂ’s profits are also high in last three years but reduced 56% increase in six months of 2009 that is due to the reduction in oil price resulting by world economic downturn. Return on Average Capital Employed (ROACE) also showed a rise of 1% from 2006 to 2007 but a significant decrease in income attributable to shareholders in 2008 and partly offset by an increase in capital employed, resulted in a decrease in ROACE of 6.0% in 2008(18%) compared to 2007 (24%).However ROACE has reduced 17.5% in current yearÂ’s first two quarters to last year because company is facing threats in its operations in Nigeria, 8th biggest oil nation in the world and also due to the OPEC reduction in oil production. Shell generated a massive cash flow from its operation 34.5% up in 2008 to last year. This is due to strong income growth followed by less taxation. Whilst ShellÂ’s rival BP reported a huge decline in cash flow from operations showing its bad performance. Gearing (risk attached to business) increased to 23% in 2008 from 17% of 2007 mainly due to more borrowing i.e. more debt and also due to rise in operating lease obligations, as ShellÂ’s expansion allows it to borrow more. This increase in gearing is offset by significant rise in profits. Earnings per Share for Shell decreased in 2008 from $5 in 2007 to $4.27 in 2008. This was due to decline in profits followed by the repurchase of the shares. Despite of worlds slow economy a second quarter 2009 dividend has been announced of $0.42 per share, an increase of 5% over the US dollar dividend per share for the same period in 2008. Shell has also met its environmental and social obligations by implementing strong company-wide health, security, safety and environmental (HSSE) standards. The company has shown a considerable reduction in Greenhouse Gas Emissions, Flaring, and Spills and also company has implemented a strong waste minimization policy mainly due to the success of the mud treatment process. From social perspective, Safety-Fatal Accident Rate also reduced in recent years and also the Injuries-TRCF rate shown a decline. This was attributed to better working conditions, employees training and by following the health and safety laws. Summing up, Shell has strong market position and ranked best in the world. Shell is the energy company of the future. Its strong revenue generation ability, more expansions, and strong strategies in conducting business, its technological advancements its project management skills and sharper implementation of strategies will help the company to overcome the situation of global economic slowdown and to improve its performance.