Financial Analysis of AMP Limited

RUNNING HEAD: Financial Analysis of AMP Limited
1
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Topic- Financial Analysis of AMP Limited
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Table of Contents
Introduction...........................................................................................................................................3
1. Description of AMP Limited.....................................................................................................3
2. Governance and Ownership structure............................................................................................4
3. Performance ratio analysis of AMP Limited..................................................................................7
Short term solvency ratio...................................................................................................................7
Proving the equation.........................................................................................................................9
Long term Solvency ratios.................................................................................................................9
Asset utilization...............................................................................................................................10
Profitability ratios............................................................................................................................11
Market value ratios..........................................................................................................................13
4. Share price graph of the AMP Limited........................................................................................14
4.1 Graph reflecting the share price movement of AMP Company and All ordinary share price
index 14
4.2 The comparison between the Share price movement of AMP Limited and share price movement
of all ordinary stock exchange.........................................................................................................14
5. Announcements...........................................................................................................................16
6. Research via internet....................................................................................................................16
6.1 Beta calculation...................................................................................................................16
6.2 Computation of required rate of return by using CAPM method...............................................17
6.3 Determining the investment method (Conservative investment)................................................17
7. Computation of the weighted average cost of capital...................................................................18
7.1 Computed Cost of Capital through Capital Assets Pricing model........................................18
7.2 Implications that a higher WACC on investment decision........................................................18
8. Debt ratio consideration of AMP Limited....................................................................................19
8.1 Stable Debt to equity ratio of company..........................................................................................19
Dividend policies of company..............................................................................................................20
Letter of recommendation..................................................................................................................20
Conclusion...........................................................................................................................................21
9. References...................................................................................................................................22
10. Appendix.................................................................................................................................24

Financial Analysis of AMP Limited 3
Introduction
With the increasing ramified changing economic factors, each and every organization
needs to run business effective by using the financial tools and techniques in determined
approach. There are several financial tools such as ratio analysis, capital budgeting analysis,
top down analysis, bottom up analysis which could be used by the management of Company
to increase the overall outcomes. It is observed that AMP Company has increased its
profitability throughout the time.
.
1. Description of AMP Limited
The AMP Limited is a financial service company working in Australia and New Zealand
providing superannuation benefits and investment products, insurance and financial advice
and Banking product. It includes the entire home loan and saving account service for clients
(AMP limited. (2018).

2. Governance and Ownership structure
It is analysed that the CEO of Company is Craig Meller who takes all the managerial and
operations decisions in effective manner.
Rank Name Ag
e
Company Compensatio
n
shares
2 George R.
Roberts
74 KKR & Co LP 113,712 44,650
3 Henry R. Kravis 74 KKR & Co LP 113,434 44,650
4 Hock E. Tan 66 Broadcom Inc 103,211 98,323
5 Rob Roy 49 Switch Inc 94,638 89,444
6 Alex A.
Molinaroli
Johnson Controls
International PLC
78,282 9,042
7 Michael Rapino 52 Live Nation
Entertainment Inc
70,616 58,632
8 Yasuhiro Sato 65 Mizuho Financial
Group Inc
70,000 0
9 Mario J. Gabelli 75 GAMCO Investors Inc 69,414 0

Financial Analysis of AMP Limited 5
10 Leslie Moonves 68 CBS Corp 69,333 43,696
11 Christopher
Terrill
50 ANGI Homeservices
Inc
68,798 3,800
12 Andrew N.
Liveris
63 DowDuPont Inc 65,689 12,174
13 Jeffery Fairburn 51 Persimmon PLC 63,697 0
14 W. Nicholas
Howley
65 TransDigm Group Inc 61,023 0
15 Douglas R.
Lebda
48 LendingTree Inc 59,591 0
16 Simon Anthony
Peckham
55 Melrose Industries
PLC
57,849 0
17 Douglas S.
Ingram
55 Sarepta Therapeutics
Inc
56,866 11,608
18 Thomas E.
Dooley
Viacom Inc 53,648 0
19 Ronald Clarke 62 Fleetcor Technologies
Inc
52,644 15,127
20 Stephen Kaufer 55 TripAdvisor Inc 47,933 28,578

21 Gregory B.
Maffei
56 Qurate Retail Inc
QVC Group
47,810 2,293
22 Stephen B Burke 59 Comcast Corp 46,537 5,338
23 Brian
Duperreault
70 American
International Group
Inc
43,087 11,157
24 Kathleen
Eisbrenner
NextDecade Corp 43,086 42,145
25 Dirk Van de Put 57 Mondelez
International Inc
42,443 30,002
(Yahoo Finance, 2017).
Share holder details of company