Financial Analysis of ANZ Bank: Share Price Movement and Fundamental Ratios

Running head: FINANCE FOR BUISNESS - MASTERS
Finance for Business- Masters
Name of the Student
Name of the University
Authors Note
Course ID

1FINANCE FOR BUISNESS - MASTERS
Table of Contents
Introduction:...............................................................................................................................2
Brief Description of Company:..................................................................................................2
Ownership-Governance Structure:.............................................................................................3
Substantial sharehold ers:......................................................................................................3
Main People:..........................................................................................................................4
Fundamental Ratios:...................................................................................................................5
Short term Solvency:..............................................................................................................5
Long Term Solvency:.............................................................................................................5
Asset Utilization Ratios:........................................................................................................5
Profitability Ratios:................................................................................................................6
Market Value Ratios:.............................................................................................................6
Graphical Descriptions of share price results:...........................................................................7
Comparative analysis of the share price:...................................................................................8
Significant factor influencing share price of the ANZ Bank:....................................................9
Computations of the Beta Values and expected rate of returns using CAPM:..........................9
Calculated beta of ANZ Bank:...............................................................................................9
Calculation of required rate of return for the company’s shares:.........................................10
Conservative of making Investment:...................................................................................10
Weighted Average Cost of Capital:.........................................................................................11
Implications of the higher weighted average cost of capital on management perspective:. 11

2FINANCE FOR BUISNESS - MASTERS
Debt ratio:.................................................................................................................................12
Dividend policy:.......................................................................................................................12
Letter of Recommendations:....................................................................................................12
Conclusion:..............................................................................................................................13
References................................................................................................................................14

3FINANCE FOR BUISNESS - MASTERS
Introduction:
The report is based on the determination of the financial position of the ANZ Bank.
The report would be providing the descriptive analysis of the company based on the share
price movement. The report begins with the description of the company along with the
outline of core activities that in which the company operates. Furthermore, the report would
be providing the ownership governance structure of the company. The report would be
highlighting the main substantial shareholders that holds more than 20% of the shareholdings.
Furthermore, a list of the main people of the ANZ Bank will be reported that forms the part
of the governance. A computation of the fundamental ratios would be carried out to
determine solvency of the company.
A comparative analysis of the share price would be performed to understanding the
volatility that is involved in the share price against the all ordinary index. A graphical
representation would be depicting the movement of the share price and factors that contribute
to such movement. The computation of the beta would be performed which would further
accompany required rate of return by using the tool of weighted average cost of capital. The
debt ratio and the dividend policy of the company would be considered as this form the basis
of letter of recommendations.
Brief Description of Company:
Australia and New Zealand Banking Group Ltd is commonly known as the ANZ
Bank. The bank is the third largest in terms of the market capitalisation in Australia. The
Australian operations of the ANZ Bank makes up the biggest part of the business. ANZ Bank
has the proud heritage of more than 180 years (Anz.com 2018). The banks operate in thirty-
four global markets having its representation in Australia, New Zealand, Asia, Pacific,
Europe, America and Middle East. The headquarter of the ANZ Bank is located in