Evaluation Essay on Saudi International Petrochemical Co

Introduction

Saudi International Petrochemical Company is a company that is owned by GCC and Saudi Arabia private sector investors. The organization is among the leading public trading companies listed in Tadawul which is the Saudi Capital Market. The company began public trading activities on 22nd December 1999 which at the time had a paid-in capital worth SR 500 million (Tawadul.com, 2018). However, the share capital of the company was later increased in 2003 by the company issuing shares amounting SR 3 million which played a vital role at the time in raising the capital to worth SR 650 million. In April 2005, the company also managed to raise the share capital of the organization to SR 850 million which led to the company share capital to accumulate to SR 1.500 billion worth of share capital (Tawadul.com, 2018). The company success of the company has also been mainly attributed due to the high accessibility rate of the company to the raw materials that leads to effectiveness regarding the operations of the organization. The mission and vision statement of the company indicates that the company aims at growing its capability and reaching out to the consumers that are present in the market through continuously pushing boundaries that enhance, sustain, and inspire excellence. The primary values of the company include courage, passion, momentum, and high rate of efficiency in the operations of Saudi International Petrochemical Company.

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The organization structure of SIPCHEM is effective as it manages to incorporate a board of shareholders led by the chairman of the board of directors and an effective managerial team. The organization has a highly competent staff which manages to play a vital role in ensuring that the organization operates to achieve its set function in the competitive market (Tawadul.com, 2018). The board of directors that is present in SIPCHEM has been tasked with the mandate of creating policies. The managerial of the organization implements the procedures established by the board of directors by effectively delegating duties to the employees of the organization. The organization integrates a transformational sort of leadership which has managed to be the core reason for the success of the organization. Transformational sort of leadership present in SIPCHEM has managed to ensure employees are directly involved in the decision-making process present in SIPCHEM.

Saudi International Petrochemical Company investments reach out to the intermediary and basic chemical and petrochemical materials that can be applied as feedstock manufacturing of products that are suitable for the welfare of people and prosperity of people. The company has put up standards that ensure that the company's products manage to comply with the available regulations that affect the outcomes that the firm produces in the chemical and petrochemical market (Tawadul.com, 2018). The company chose Jubail Industrial City to develop its industrial complex which will ensure production of multiple chemical and petrochemical materials due to the availability of infrastructure that is present in the region that will ensure that smooth flow of the chemical and petrochemical products. The area where the company is present also manages to be abundant in raw materials thus leading to high efficiency in the operations of the company.

The company through its financial statements indicates the soundness and stability of the company. The company through its past three balance sheets manage to suggest that the company has been making profits. The profits of the SIPCHEM Company has been increasing significantly for the past three years of operation of the company. The recent three fiscal SIPCHAM cash flow statement indicates that the liquidity of the company has been increasing significantly for the three years (Tawadul.com, 2018). The increase is indicated by the positive value which is a clear indicator of the increase in liquidity of the cash assets of SIPCHEM Company. However, in analyzing the values retrieved from the cash flow statement, it is evident that the liquidity of the company has been fluctuating for the past three fiscal years that have undergone evaluation. The income statement of the company also underwent an assessment to determine the expenditure rate of the company and the revenue rate of the company. In analyzing the income statement of SIPCHEM, it is quite evident that the organization revenues for the past three fiscal years have been higher compared to the expenditures of the company (Argaam.com, 2018). The income statement for SIPCHEM Company for the past three years has indicated that the company has been making profits for the past three years.

In analyzing the company's ratios, it is stipulated that the company's current return on assets is 4.38 percent, the return on equity percentage is 12.39 percent. The profitability per earnings ratio of the company is 10.28 percent (Argaam.com, 2018). The dividend of SIPCHEM Company is SR 183.3 million which has a dividend price of SR 20.62 and dividend rate of 2.42 percent (Argaam.com, 2018). The financial information of the firm also indicates that the company dividends have increased by 0.5.

In analyzing the future perspectives of the company, there is a high susceptibility rate of the profits of the company increased in the unforeseeable future. The value of the shares might increase due to an increase in the revenues of the organization. The dividends payout of the shareholders is also expected to grow in the unforeseeable future. However, it is likely that the value of chemical products that are applied as raw materials is also expected to increase thus decreasing the efficiency of the company.

Conclusion

All in all, it is evident that SIPCHEM Company is operating effectively in the highly competitive market. The financial information attests to the fact as the company has been making high profits in the chemical and petrochemical markets. The profitability ratios of the company also manage to play a vital function in indicating the soundness of the organization.

References

Argaam.com.(2018).Saudi International Petrochemical Co.Retrieved from https://www.argaam.com/enTawadul.com.(2018).Saudi International Petrochemical Co.Retrieved from www.tadawul.com.sa