Financial Analysis of Westpac, ANZ and Commonwealth

Corporate Accounting

CORPORATE ACCOUNTING 1
Executive Summary
The main aim of this report is to develop the understanding of analysis of financial statement
of the company. In this report, the analysis of Westpac, ANZ and Commonwealth has been
done in order to analyse the financial position of the companies. The analysis states that the
companies have high leverage in the context of equity and liability. The different items of
cash flow statement have been discussed in this report which states that the companies have
less capital. The analysis of comprehensive income statement has different items which are
not recorded in the income statement. The companies have deferred tax and liabilities which
analysed the consumption and saving of company in the context of tax.

CORPORATE ACCOUNTING 2

CORPORATE ACCOUNTING 3
Contents
Introduction................................................................................................................................1
Equity and Liabilities.................................................................................................................1
Cash flow statement...................................................................................................................1
Comparative Analysis............................................................................................................1
Income statement.......................................................................................................................1
Accounting for Corporate Income Tax......................................................................................1
Conclusion..................................................................................................................................1
References..................................................................................................................................1

CORPORATE ACCOUNTING 4
Introduction
Financial analysis refers to an assessment of the viability, stability, and profitability of a
business. In this report, the financial analysis has been done in order to analyse the profit and
stability of the company. In this report, three companies have been taken into consideration to
analyse the financial position such as Westpac, ANZ, and Commonwealth. Westpac is an
Australian bank and the provider of financial services which was founded in 1817 (Westpac,
2018). Commonwealth Bank of Australia is an Australian multinational Bank with the
business across New Zealand, United Kingdom and United States. It earned $26.005 billion
revenue (The Commonwealth, 2018). ANZ is an Australia and New Zealand Banking Group
and it is the third largest bank in the term of market capitalisation (ANZ. (2018) History.
This report is divided into four parts to analyse the financial statement. In the first section,
equity and liabilities of the company have been analysed. The second section is based on the
cash flow statement of the company in order to analyse the financial position as well as
stability in the market. The third section of the report has discussed about the items of income
statement in order to analyse the profitability of the company. The corporate income tax has
been discussed in the last section of the report.
Equity and Liabilities
Westpac

CORPORATE ACCOUNTING 5
Equity components 2016
($m)
2017 ($m) 2018 ($m)
Ordinary share capital 33469 34889 36,054
Treasury shares and RSP treasury
shares
(455) (495) (493)
Reserves 727 794 1077
Retained earning 24379 26100 27883
Non-controlling interests 61 54 52
Total Equity 58,181 61,342 64573
From the above table, it is seen that ordinary share capital has been increasing in all the three
years. The reason can be increase in earning or due to increase in the selling stock shares that
will ultimately increase the profitability of the company. While concerning reserves of the
company from the above table, it can be seen that the reserves has increased in 2017 and
2018 when as compared to 2016 (Westpac, 2017). Moreover, with the increase in ordinary
share capital, the reserves have also increased in 2018. The company has a potential to
expand and diverse its business due to increasing retained earnings.
Total Liabilities 2016
($m)
2017 ($m) 2018 ($m)
Payment due to financial
institutions
18209 21907 18137
Deposit and other borrowings 513071 533591 559285
Other financial liabilities at fair 4572 4056 4297