Business Finance - Bank of Queensland

Running head: BUSINESS FINANCE
Business Finance
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Introduction......................................................................................................................................2
Discussion and Analysis..................................................................................................................2
Company Overview.....................................................................................................................2
Cost of Equity..............................................................................................................................4
Liquidity and Capital Structure...................................................................................................5
Capital Structure Ratio................................................................................................................6
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................10

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Introduction
The assignment aims at evaluating the Bank of Queensland which is an Australian Retail
Bank that is having its headquarters in the Brisbane, Queensland. The analyzed bank is regarded
as one of the oldest operating financial institution in the Queensland and is having around 252
branches and 166 “owner managed” branches. The bank in specific has been analyzed in terms
of liquidity and capital structure whereby important aspects of the company has been analyzed in
order to get a review of the financial position of the company. Financial risk is one of the key
risk that the banking industry faces and the same has been well analyzed with the help of debt
ratio and total capital employed ratio which were some of the key aspects analyzed. On the other
hand, for analyzing the liquidity position of the company key ratio’s like current ratio and quick
ratio have been well deployed for the purpose of analyzing the financial statements of the
company. The application of the Dividend Growth Model has also been done specifically for the
purpose of well analyzing the Required Rate of Return from the stock analyzed (Boq.com.au
2020). From the view point of recommendation there were various factors and reasons which are
well associated with the company that have been analyzed based on the given set of numbers.
Discussion and Analysis
Company Overview
The analysis of the company has been done in specific with the help of the business
operations and activities that it undertakes for the purpose of well carrying on its business
activities. The Bank of Queensland is a key Australian Retail Bank that is headquartered in the
Brisbane, Queensland (Carletti, Goldstein and Leonello 2020). The analyzed bank is one of the
key and oldest operating financial institutions that is having around 252 branches throughout the
Australian region, which also includes the 78 corporate branches and a base of around 166
“owned managed” branches in the Australian Region. The bank is considered and regarded as
one of the top 100 Australian Companies that are ranked and marked in terms of market
capitalization on the Australian Securities Exchange. The company is well regulated with the
help of the Australian Prudential Regulation Authority and is also considered as an Authorized

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Deposit taking institution. The key branches of the company in particular or key companies that
operates under the BOQ are as follows:
 Virgin Money Australia: The BOQ offers and operates a number of brands that
is having a diversified range of products and services for the various personal and
business customers (Rehman et al., 2019).
 BOQ Finance: The subsidiary is wholly owned by the BOQ, that well specializes
in management of assets, cash flows and other structured financial solutions.
BOQF is a key mid-market financier that provides deep industry and products
skills.
 BOQ Specialist: BOQ Specializes in delivering distinctive banking solutions to
the niche market segments that well includes medical, dental and accounting
experts.
 St. Andrew Insurance: St. Andrew acts as a leading Australian provider of
various life insurance products and consumer insurance products that are offered
by the company. Since, the year 1998, the company have been well helping to
protect the Australians by giving or delivering an innovative and streamlined
insurance solutions for various corporate partners and customers.
Net Working Capital Position
The net working capital shows the amount of liquidity that is available or present in the
company and the same can be well analyzed with the help of the current liabilities and current
assets that the company have reported for the time period analyzed. The net working capital of
the company has been well calculated with the help of the current assets less the amount of
current liabilities that the bank has reported. It is well important to analyze the working capital
that is available with the company and the same can be well analyzed with the help of the
changes and the movement that is observed in the current assets and the current liabilities of the
company. The net working capital of the Bank in the year 2018 was around -$7,125,000 and the
same has well decreased to an amount of -$4,507,000. The low working capital of the bank can
be well contributed to the fact that the increase in the current liabilities of the bank has been
much more than the increase in the current assets of the company, which have well decreased the
working capital. It is important that the management of the bank well maintains an adequate