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Business Financial Analysis - Doc

   

Added on  2021-06-14

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Name of the studentTopic- Financial Management analysis of NABUniversity name

Business Financial analysis of National Australian Bank2Table of ContentsIntroduction...........................................................................................................................................31.Description of National Australian Bank.........................................................................................32.Governance and Ownership structure................................................................................................43.Performance ratio analysis of National Australian Bank.....................................................................44.The share price graph reflecting movement in the share price of National Australian Bank..............74.1 Graph reflecting the movement in the share price of National Australian Bank.............................74.2 Comparison between movement in the share price of National Australian Bank and share price return of the all ordinary stock exchange..............................................................................................75.Announcements.................................................................................................................................76.Research via internet..........................................................................................................................86.2 Computation of required rate of return by using CAPM method................................................86.3 Determining the investment method (Conservative investment)...............................................97.Weighted average Cost of Capital.......................................................................................................97.1Computing cost of Equity using CAPM method............................................................................97.2 Implications that a higher WACC on investment decision.........................................................108.Debt ratio consideration of National Australian Bank......................................................................108.1 Stable Debt to equity ratio of the company...................................................................................108.2 Gearing ratio discussion.............................................................................................................109.Divided policies of the company.......................................................................................................1110.Letter of recommendation..............................................................................................................1111.Conclusion......................................................................................................................................1212.References......................................................................................................................................1313.Appendix.........................................................................................................................................14

Business Financial analysis of National Australian Bank3Introduction In this report, financial management analysis tools have been used to analysis thebusiness. It is observed that there are several financial tools such as ratio analysis, capitalstructure analysis, and capital budgeting analysis top down analysis. In this report, NationalAustralian Bank Company has been taken to prepare this report. This report emphasisesupon the financial performance, weighted average cost of capital, share price analysis,dividend policy and letter of recommendation which could be used by investors to make theeffective financial decisions. 1.Description of National Australian BankNational Australian Bank is Australian Bank which is one of the four biggest financial banksin Australia. This Bank is the four largest Banks in terms of the capitalization, revenue andprofitability. This company has gained momentum in market by providing effective bankingservice in Australian Market.The Current CEO of Company is Andrew who takes all the necessary steps to run thebusiness effectively (National Australian Bank).

2.Governance and Ownership structureThere are several key managerial persons who take all the necessary decisions to run thebusiness effectively. (Yahoo finance, 2017)The table reflects the numbers of shareholders who have owned the highest shares in NationalAustralian Bank. In addition to this, there are several key persons who take all the imperative decisions to run the business effectively. The governance of National Australian Bank has shown that it has complied with the all the rules and regulation. It is observed that company has strong legal compliance program which strengthen its corporate governance program.

Business Financial analysis of National Australian Bank5(Yahoo finance, 2017)3.Performance ratio analysis of National Australian BankThis ratio analysis is used to analysis the relation between two financial factors whichdivulges the profitability and capital structure of company. Details of the imperative information of National Australian BankNational Australian BankParticulars (Amount in Million 20162017AUD$ EBIT27,62927,403Interest14,69914,221Net profit21,66617,730Total Assets7,77,6227,88,325

Total Liabilities7,26,3077,37,008Shareholders' Equity51,29251,306This above given details reflects the key financial items which National Australian Bank has reflected in the financial statement. The shareholder equity of company has been changedwith the slight %. Short term solvency ratio 1.Current ratioThe current ratio of National Australian Bank has increased to 1.2 points in 2017 which shows that it has increased its investment in current assets to increase the productivity. Liquidity ratio Years20172016Current ratio 1.2 .89Quick ratio .92 .57. Quick ratio has also shown the slight changes as National Australian Bank does not have any capital investment in inventoriesNote- current ratio has been considered on the basis of deposits otherwise it will be keptzero (National Australian Bank. 2015).

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