Commonwealth Bank Financial Performance Analysis

The provided assignment content appears to be a set of financial data and ratios for the Commonwealth Bank of Australia (CBA) over several years. The data includes metrics such as NPAT per employee, effective tax rate, gearing, interest cover, current ratio, dividends paid per share, and growth rates for various financial metrics. Additionally, there are two appendices: Appendix 3 provides industry averages for certain financial ratios, while Appendix 4 presents a historical current ratio for CBA over the past several years.

Student name: Kate Bickford
Subject name: Financial management (FMGT)
Word count: 2750
Title: Financial analyses of the Commonwealth Bank over a
five year period.
Background:
Financial literacy helps you to become a better manager. Understanding the financial
side of the business will make you more effective on the job and will make your work
life more meaningful. The two core activities of financial management are to manage
profitability and manage liquidity. If either of these two activities is neglected it can
lead to the demise of an organisation. Hence, these two aspects guide the decision
making for any manager. Issuing bonds (debt) and/or issuing stocks (shares),
enables the corporation to manage the money it needs to finance the assets of the
business. Therefore, being able to value these financial securities is also an
important skill to have.
Requirement:
Your task is to analyse the historical (for the last five years) performance of a listed
company and present your findings in the form of a report, which will cover both
qualitative and quantitative performance elements in a logical cohesive format.
Please note: If you are working for a company listed on the stock exchange, use this
opportunity to complete the exercise on that company. Otherwise, feel free to value a
competitor or a company that interests you. However, note that the company you
select must be listed on a stock exchange and have a history of paying dividends.
The qualitative component of your discussion should include brief background
information on the company including how they are placed within the industry, and a
brief overview of the recent stock price movements for the company. The
quantitative component should include an initial analysis of trends in the major items
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contained in the profit and loss statements and balance sheets, followed by an
analysis of the following important ratios measuring liquidity, profitability, capital
structure and market-value aspects of the company performance:
o Liquidity: Current ratio
o Profitability: Net profit margin ratio and Return on total assets
o Capital structure: Debt ratio and Interest cover ratio
o Market value: Price-earning (P/E) ratio.
Your analysis should highlight the important changes within these ratios over this
period and identify the reasons for significant changes. Since these financial ratios
are limited to the particular organisation, it is also useful to compare these ratios to
other businesses in the same industry or by using industry averages.
You are also required to calculate the value of a stock (share) of the listed company
selected above, using the Constant Dividend Growth Rate model. Go to your
relevant stock exchange site (e.g. www.asx.com.au if using an Australian listed
company) and find the latest share price. Assume the company chosen above has a
4% dividend growth rate and the required rate of return is 9%. Compare that stock
value with the current stock market price. Are there any differences? You are
required to explain these differences.
Analyse and interpret the ratios and the other data with reference to the theoretical
concepts introduced in this subject to evaluate the company’s operations and
performance. Discuss limitations if any. Taking into account the quantitative and
qualitative analysis, you are then required to make a recommendation on whether to:
5. Invest in the company
6. Do not invest in the company.
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Executive Summary
This paper analyses the financial performance of one of Australia big four banks; the
Commonwealth Bank over a period of five years. The commonwealth Bank is one of
Australia’s leading financial institutions offering general banking and business
banking needs as well as many other services such as insurance and
superannuation and has been in operation since 1911. During the five year period
the Commonwealth Bank has seen steady revenue growth and is operating on par or
above expected industry averages. The CBA services over 800,000 shareholders.
This paper will look at the performance to date of the firm over the five year period;
demonstrating that the firm has proven management strategies, a solid share
dividend history and are adaptable to economic and fiscal changes. The report firstly
looks at the qualitative analyse through an overview of the firm and historical stock
movements. The paper with then look at the quantitative component through
analyses of liquidity, profitability, capital structure and market value ratios and
benchmarking to show business and profit trends in the industry. These ratios will
demonstrate strong performance of the firm. The paper will use the constant
dividend growth rate model to look at the value of the share. And in conclusion the
paper will look at some recommendations for investors.
Please acknowledge limitations of analyses within the restricted word count limit.
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Table of Contents
1. Introduction............................................................................................................. 6
2. Qualitative Analysis................................................................................................6
3. Company Overview.................................................................................................6
4. Stock Movements....................................................................................................7
Table 1: Average CBA share price..........................................................................8
Table 2: The big four banks stock price over the past three months.......................9
5. Quantitative Analysis...............................................................................................9
6. Ratios.................................................................................................................... 10
6.1 Liquidity: Current Ratio.................................................................................... 10
Table 3: Current ratio: CBA....................................................................................11
6.2 Profitability: Net profit Margin ratio...................................................................11
Table 4: Net profit margin ratio for CBA.................................................................11
Table 5: Net profit margin; CBA vs NAB................................................................12
6.3 Profitability: Return on total assets..................................................................12
Table 6: Return on Assets for CBA........................................................................12
6.4 Capital Structure: Debt and interest ratio.........................................................12
Table 7: Debt ratio CBA vs NAB............................................................................13
Table 8: Interest ratio CBA.....................................................................................13
6.5 Market value: Price Earnings ratio (P/E Ratio).................................................13
Table 9: PE ratio for CBA and WBC......................................................................14
7. Stock valuation......................................................................................................14
Table 10: Growth rate of CBA shares over 5years................................................15
8. Conclusion............................................................................................................ 15
Table 11: The Big Four onwards and upwards......................................................16
9. Recommendations................................................................................................ 16
References................................................................................................................18
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Appendix 1: CBA 2011 - 2015...................................................................................19
Appendix 2: CBA Growth and ratios 2011 – 2015.....................................................22
Appendix 3: CBA industry average...........................................................................24
Appendix 4: CBA historical current ratio (Quarterly data).........................................25
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1. Introduction
By analysing the qualitative and quantitative aspects of a business’s past
performance investors can be guided in making decisions on how a firm performs
overall and how profitable and risky the investment may be.
This paper will look at the financial performance of the Commonwealth Bank (CBA) a
public listed company listed on the ASX in 1991. This paper will look at the last five
years of performance for the firm and conduct analyse of the firm’s overall
performance.
The paper will look at the qualitative component firstly through the firm’s background
and historical stock price to see how the firm performs in the market place.
The paper will then look at quantitative measures of the CBA by analysing financial
trends and ratio on liquidity, profitability, capital structure and market value whilst
benchmarking this analysis against the firm’s performance over the five years.
The paper will additionally look at a stock valuation exercise using the share
valuation dividend discount model and in conclusion will summarise the analyses of
the firm and recommendation as to if the CBA is a sound investment.
Firms need to take in to account the five basic principles of finance; money has a
time value, there is a risk-return trade-off, cash flows are the source of value, market
prices and individual response to incentives, the analyses will tie to some of these
key principles.
2. Qualitative Analysis
Qualitative analysis looks at things that cannot be measured from the financial
statements of a firm but more relate to the management quality, corporate
governance and environmental factors affecting the business.
3. Company Overview
The Commonwealth Banks is one of Australia’s big four banks, the bank has
serviced personal and business customers for general banking and business
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banking needs and also offers a varied level of other financial services such as
financial planning, home loans and insurance to name a few.
The CBA has 800,000 shareholders and employs over 52,000 employees across
Australia and has seen steady profits and growth in its time.
The CBA is governed by a board of directors specialising in banking, finance and
business, the board has seen the company continue to be one of the most profitable
banks in Australia with annual revenue of $45,310,000 in the 2015 financial year.
(See appendix 1)
CBA shares are more commonly known as “blue chip stock” and sit in the ASX top
blue chip stocks in Australia. They are therefore relatively financially sound and seen
as a cornerstone investment for financial portfolios.
From analyses of the financial and balance statements we can ascertain that the
company holds a diverse portfolio of services and products and the company is
consistently delivering profits. The stock prices has been dropping slightly over the
last twelve months, this can be mainly put down to economical factors such and the
high oil price, high Australian dollar and interest rates being at an all time low, the
firm has also had to deal with the challenges of the GFC from an international scale.
Furthermore as the stock price fell Chief executive Ian Narev said the results showed
Australia's economy had maintained its steady "transition" in the second half of the
calendar year as it adjusts to falling mining investment. (Yeates 2016) banks are
subject to big fluctuations in the market dependent upon various factors; however the
bank can mitigate this fiscal risk by being adaptable and adjusting rates of interest on
borrowing products in line with the business and inflation to allow the firm to continue
to be profitable.
4. Stock Movements
The stock price as of close of business 8th of April, 2016 is trading at $70.76 (ASX
2016) the stock was trading at over $84.00 a share in December 2015 showing that
the stock fluctuates up and down regularly dependant on the current fiscal market.
The stock has risen from a rate of $52.01 as of 30th of June 2011 providing a 36%
increase in five years.
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To performing benchmarking analyses we can see from table one that the CBA stock
has progressively had ebbs and flows from a low in Oct 2015 though to its peak in
December 2015, the stock has again decreased further this financial year. The stock
stays consistently high but does fluctuate depending on the state of the fiscal market.
For an investor buying at the right time and selling at the right time is crucial, the
CBA stock provides consistently high and stable dividends.
Table 1: Average CBA share price
Source: ASX website
Comparatively as shown in the below table the four big banks have all moved slightly
in the last three months.
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Table 2: The big four banks stock price over the past three months
Source: Created for this assignment; figures from ASX website
Hence we can conclude that the CBA shares are performing well due to buoyancy in
the market and strong firm performance. The CBA shares are the highest performing
out of all the big four banks so this further points to the firm’s investment potential.
5. Quantitative Analysis
Further analyse can be performed by conducting a quantitative analysis. After doing
detailed analyses of how the CBA has performed over the last five years there are
trends in consistent sales revenue however there are some considerations the firm
needs to take in to account moving to the future that are affecting the overall stability
of the financial market sector. The economy will struggle to grow at much above 2
per cent and domestic demand looks pretty anaemic at around 1 per cent this year
(Lett 2015) it will prove difficult for the bank to grow at a rapid pace due to the current
state of the Australian economy. The bank will also face the challenges of increasing
competition in the lending market by smaller and online lenders and the growing
issue of bank debt of consumers rising, however the CBA is a consistent and regular
performer in the market, the firm also has a consistent cash flow which increases
investors confidence in the validity of shares.
Major financial trends for the CBA over the five year period:
 Revenue has remained steady, demonstrating to shareholders that it is a solid
investment. Total revenue in 2011 was $46,401,000 comparatively in 2015
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$45,310,000. Figures for sales and other revenue have also stayed fairly
consistent. (See appendix 1)
 Total assets have grown consistently over the five year period from
$667,899.00 in 2011 to $873,446,000 in 2015 this shows a 31% increase over
a five year period which shows the firm is investing in new business
strategically. However the firm has also increased in liabilities from
$630,612,000 in 2011 to $820,43,000 in 2015 which is an increase in liabilities
of 30%. (See appendix 1)
 Total share equity has risen in 2011 from a rate of $37,287,000 to
$52,993,000 in 2015 (See appendix 1)
 Total revenue growth has risen from 1.7% in 2012 to 2.3% in 2015 showing
solid performance in growth (See appendix 2)
These figures demonstrate the strength of the firm which has seen continued growth
in share equity over the five year period; the firm has been investing in new business
and continues to have a diversified portfolio which keeps cash flow levels liquid.
6. Ratios
6.1 Liquidity: Current Ratio
Current ratio measures a firm’s liquidity in terms of the relationship between the
dollar value of its current assets that are expected to be converted to cash within the
year and its current liabilities that must be repaid within the year (Titman et al. 2016
p.91)
The following figures can be referenced from Appendix 4, the CBA held annual
assets of $125,516,000 in the 2015 financial year and liabilities of $820,453,000 they
have steadily gained assets over the five year period and have also gained liabilities
during this time due to the gain in assets however there has been a consistent rise in
current ratio over the five year period. This demonstrates that the firm has a strong
ability to deal with debt and has strategically been reinvesting capital in sound
investment strategies; the firm has applied firm investment management policies to
ensure the firm is investing in new projects. The below table shows the current ratio
for the CBA, compared to the industry average which is .98 (See appendix 3) The
CBA has quiet low current ratio figures, generally business’s sit somewhere between
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1-3ratio. Banks run at much lower current ratios due to a higher rate of return
income. If a company has a reasonable amount of short-term debt but is expecting
substantial returns from a project or other investment not too long after its debts are
due, it will likely be able to stave off its debt (Investopedia 2016) The CBA is well
capitalised and has high profits of revenue coming in to the firm so below current
ratio is adequate the firm’s business.
Table 3: Current ratio: CBA
Source: Created for this assignment (See appendix 4)
6.2 Profitability: Net profit Margin ratio
The net profit margin captures the effects of all the firm’s expenses and indicates the
percentage of revenue left over after interest and tax have been considered (Titman
et.al 2016 p.45)
Figures from Appendix 2 below show the net profit margin for the CBA has been
steadily climbing from 24% in 2011 to 37% in 2015. The CBA annual report points to
strategic investment in assets and delivering greater options of insurance products
over the five year period.
Table 4: Net profit margin ratio for CBA
Source: Created for this assignment
We can ascertain from the benchmarking chart below the comparative rate of net
profit margin increased at a steady rate for the CBA compared to one of its major
competitors the National Australia bank (NAB) Therefore we conclude that the CBA
shares are increasing at a sound rate, the CBA has benefited from lower interest
rates in rate of profit return.
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Table 5: Net profit margin; CBA vs NAB
Source: Created for this assignment. NAB figures from ISISWorld
6.3 Profitability: Return on total assets
Return on assets (ROA) ratio takes into account both management’s success in
controlling expenses (contributing to high profit margins) and its efficient use of
assets to generate firm sales (Titman et.al 2016 p.97)
The industry average on return on total assets is .96 percent (See Appendix 3) the
CBA has consistently hovered around the 1% average rate per the below table
indicating performance above the industry average across the five year period. This
demonstrates good control of assets, the firm has also been investing further in new
products and loan options a move which has paid off.
Table 6: Return on Assets for CBA
Source: Created for assignment
6.4 Capital Structure: Debt and interest ratio
The debt ratio measures the percentage of the firm’s assets that were financed using
current plus long-term liabilities (Titman et al. 2016 p.91)
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The CBA debt ratio sits around the low to mid 90% comparatively figure for the NAB
sit around the same level with the industry average sitting at around 92.68 (See
appendix 3) This shows that the CBA is operating within the industry average, it is
slightly higher but sitting at a adequate risk level.
Table 7: Debt ratio CBA vs NAB
Debt ratio 30-Jun-15 30-Jun-14 30-Jun-13 30-Jun-12 30-Jun-11
CBA 93.9% 93.8% 94.0% 94.2% 94.4%
NAB 94.2% 94.6% 94.3% 94.30% 94.4%
Source: Created for assignment. NAB figures from ISISWorld
The interest coverage ratio looks at the ability of a firm to service its debts or pay the
interest on the debt (Titman et al. 2016 p.92) this is an especially important ratio for
banks. This ratio is one of the primary analytical tools enabling evaluation of a given
banking institution’s activities. (Zabawa 2013)
The interest ratios show the CBA interest ratio has risen from 1.4 in 2011 to 1.7 in
2015. The industry average is 1.6 so the firm is sitting slightly above the interest ratio
expected but is in a manageable rate further demonstrating that the CBA is
managing debt well and management are not overextending debt rates.
Table 8: Interest ratio CBA
Source: Created for assignment
6.5 Market value: Price Earnings ratio (P/E Ratio)
The price earning ratio P/E ratio compares a company’s earning price per share to
the market price of the shares value. If a company is growing and has a higher
earning potential, then the P/E ratio will also be high. P/E ratio is considered as a
proxy to the firm’s growth rate. (Bodhanwala 2014)
The PE ratio for the CBA shows some interesting trends. The PE ratio has continued
to climb over the five year period but it still low in terms of PE ratios in other business
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on the stock market; banks generally trade at a lower PE than other firms due to
slower and more limited growth potential.
The below table shows the rate of growth in the PE ratio for CBA over the five years
and also comparably the PE rate of one of its competitors Westpac. Hence we see
that PE rates are generally low for banks but the CBA is providing one of the highest
across the five year period for performance in this area.
Table 9: PE ratio for CBA and WBC
Source: Created for assignment from balance sheet and ASX.
7. Stock valuation
The dividend discount model (DDM) is used to calculate the intrinsic value of a firm’s
common equity (Irons 2014) As of COB April 8th the CBA share price was $70.76, if
we assume for the purpose of this paper that the dividend has a 4% growth rate and
the required rate of return is 9%
Dividend in year 1: $4.20 x 4% = $4.17
Required rate of return: 9%
Dividend growth rate: 4%
Value of stock: $4.17/ (9% - 4%)
= $83.40
The DDM rate is higher at $83.40 than the current stock price of $70.76
demonstrating the overall value the market places on the share, given that the CBA
is a high performer, with manageable debt ratios and consistently pays dividends to
its shareholders the stock is valued higher as it’s a valuable commodity to investors.
We can see from the below table that the growth rate has been consistent for
dividends and earning per a share over a five year period.
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Table 10: Growth rate of CBA shares over 5years.
Source: Market.ft.com
8. Conclusion
After conducting financial analyses we can conclude that the CBA is a steady blue
chip performing stock. The company has had significant growth through solid
investment and being a market leader in the industry. The big four banks all perform
strongly in the Australian economy and receive strong yields on shares as per the
below table, the CBA share prices has steadily climbed over the ten year period
showing that this stock is a valuable investment and the firm manages capital well.
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Table 11: The Big Four onwards and upwards
Source: Letts, ABC
The firm is subject to the change in Australian dollar and fluctuating interest rates but
it also is a very solid performer and controls not only areas in banking but large
portfolios in superannuation and insurance ensuring that the brand has a diverse
portfolio of investments instead of just one income stream. The bank is providing
continued growth rates on earnings per share and dividend pay outs and is
managing debt at an acceptable rate. Therefore we can conclude from the above
analyses that under stringent and well managed decisions by the firm’s management
the overall performance of the CBA is a strong one with potential for further growth
and provides a good value stock option for investors.
9. Recommendations
Overall the stock with Commonwealth bank shares is a well performing and a solid
investment. Why invest in bank shares with the commonwealth bank?
 The Commonwealth bank overall return on stock is quiet steady and
consistent, they have top level credit rating, allowing them to source funds at
a lower rate.
 Bank shares are a low risk investment and a consistent investment they are
not likely to fluctuate wildly even with a low Australian dollar and low interest
rates.
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 Steady solid blue chip stock, providing consistent dividends.
 Since the global financial crisis shares have increased in price and between
the big four banks they control more than 80% of loans for housing making
them a solid investment option.
 Being one of the biggest banks they can exert their power of influence over
the government and big companies to extend their power further.
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References
1. ASX, 2016, Commonwealth Bank, Viewed 13 April 2016.
http://www.asx.com.au/asx/research/company.do#!/CBA
2. Bodhanwala, R 2014, ‘Testing the Efficiency of Price-Earnings Ratio in
Constructing Portfolio’, IUP Journal of Applied Finance, Jul2014, Vol. 20 Issue 3,
p111-118.
3. IBIS World, 2016, ‘Commonwealth Bank of Australia/Westpac/NAB’, Viewed 8
April 2016
http://clients1.ibisworld.com.au/reports/au/enterprisepremium/default.aspx?entid=11
4. Investopedia, 2016, ‘Current ratio Commonwealth Bank’, Viewed 12 April 2016.
http://www.investopedia.com/terms/c/currentratio.asp
5. Irons, R 2014, ‘Enhancing the Dividend Discount Model to Account for
Accelerated share Price Growth’, Journal of Accounting & Finance, 2014, Vol. 14
Issue 4, p153-159.
6. Letts, S 2016 ‘Big four banks set to continue upward profit grind ... for now’,
viewed 11 April 2016
http://www.abc.net.au/news/2015-04-27/big-four-banks-set-to-continue-upward-
profit-grind/6423780
7. Markets.Ft.com, 2016, ‘Commonwealth Bank of Australia’, Viewed on 12 April
2016
http://markets.ft.com/research/Markets/Tearsheets/Financials?s=CBA:ASX
8. Titman, S, Martin, T, Keown, A, Martin, J 2016, ‘Financial Management principals
and applications’, 7th edn, pp. 45, 91, 97
9. Y Charts, 2016, ‘Commonwealth Bank Current Ratio (Quarterly)’, Viewed 12 April
2016.
https://ycharts.com/companies/CMWAY/current_ratio
10. Yeates, C 2016, ‘Commonwealth Bank of Australia profit rises 4pc to $4.8 billion’,
Financial Review, Viewed 8 April 2016.
http://www.afr.com/business/banking-and-finance/commonwealth-bank-of-australia-
profit-rises-4pc-to-48-billion-20160209-gmpwmt
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11. Zabawa, J 2013, ‘Interest margin ratio of socially responsible banks’, Research
Papers of the Wroclaw University of Economics, Issue 316, p157-168
Appendix 1: CBA 2011 - 2015
Financials
Balance
Date
30-Jun-
2015
30-Jun-
2014
30-Jun-
2013
30-Jun-
2012
30-Jun-
2011
Accounting
Period Date
12 Months 12 Months 12 Months 12 Months 12 Months
Reported
Currency
AUD AUD AUD AUD AUD
Currency
Units
AUD000 AUD000 AUD000 AUD000 AUD000
PROFIT AND LOSS ACCOUNT
REVENUE ITEMS
Sales
Revenue
34,100,000 33,645,000 34,739,000 38,258,000 37,477,000
Other
Revenue
11,210,000 10,667,000 10,063,000 8,935,000 8,924,000
Total
Revenue
45,310,000 44,312,000 44,802,000 47,193,000 46,401,000
Cost of
Goods Sold
N/A N/A N/A N/A N/A
Depreciation 652,000 665,000 574,000 628,000 613,000
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R&D
Expenditure
N/A N/A N/A N/A N/A
INTEREST
Interest
Received
34,100,000 33,645,000 34,739,000 38,258,000 37,477,000
Interest
Expense
18,305,000 18,544,000 20,805,000 25,136,000 24,883,000
PROFIT AND LOSS
Share of
Profits of
Associates
N/A N/A N/A N/A N/A
EBITDA -2,531,000 -2,439,000 -2,715,000 -2,530,000 -2,924,000
Profit Before
Tax
12,612,000 11,997,000 10,645,000 9,964,000 9,057,000
Income Tax
Expense
3,528,000 3,347,000 3,011,000 2,858,000 2,647,000
Continuing
Operations
After Tax
9,084,000 8,650,000 7,634,000 7,106,000 6,410,000
Discontinued
Operations
After Tax
N/A N/A N/A N/A N/A
Outside
Equity
Interest
21,000 19,000 16,000 16,000 16,000
NPAT 9,063,000 8,631,000 7,618,000 7,090,000 6,394,000
20

Significant
Items
0 0 0 0 0
Dividends 6,744,000 6,174,000 5,776,000 5,096,000 4,707,000
AUDIT
Audit Fees 24,701 22,736 21,782 22,854 22,442
Audit Other 9,704 6,578 4,766 5,517 6,659
Total Audit
Fees
34,405 29,314 26,548 28,371 29,101
BALANCE SHEET
CURRENT ASSETS
Cash at
Bank
N/A N/A N/A N/A N/A
Trade
Debtors
N/A N/A N/A N/A N/A
Inventory N/A N/A N/A N/A N/A
Other
Current
Assets
N/A N/A N/A N/A N/A
Total
Current
Assets
N/A N/A N/A N/A N/A
NON-CURRENT ASSETS
Receivables N/A N/A N/A N/A N/A
Investments N/A N/A N/A N/A N/A
21

Property &
Plant
Equipment
N/A N/A N/A N/A N/A
Intangible
Assets
N/A N/A N/A N/A N/A
Other Non
Current
Assets
N/A N/A N/A N/A N/A
Total Non-
Current
Assets
N/A N/A N/A N/A N/A
Total Assets 873,446,000 791,451,000 753,857,000 718,859,000 667,899,000
CURRENT LIABILITIES
Appendix 2: CBA Growth and ratios 2011 – 2015
Balance Date
30-Jun-
2015
30-Jun-
2014
30-Jun-
2013
30-Jun-
2012
Average
2010-2015
Total Revenue Growth (%
change) 2.3 -1.1 -5.1 1.7 1.6
Sales Revenue Growth (%
change) 1.4 -3.1 -9.2 2.1 1.1
EBITDA (% change) NC NC NC NC N/A
NPAT (% change) 5.0 13.3 7.4 10.9 9.9
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Shareholders' Funds (%
change) 7.4 8.4 9.5 11.5 8.3
Total Assets (% change) 10.4 5.0 4.9 7.6 6.2
Employees (% change) 3.7 -1.4 0.3 -2.6 0.4
Financial Ratios
Balance Date 30-Jun-
2015
30-Jun-
2014
30-Jun-
2013
30-Jun-
2012
30-Jun-
2011
Return on Revenue (ROR) (%) 20.0 19.5 17.0 15.0 13.8
Return on Shareholders' Funds
(ROSF) (%) 17.1 17.5 16.7 17.1 17.2
Return on Assets (ROA) (%) 1.0 1.1 1.0 1.0 1.0
Profit Margin (%) 37.0 35.7 30.6 26.0 24.2
Revenue per Employee ($'000 per
person) 986.1 999.6 996.3 1,052.4 1,007.4
NPAT per Employee ($'000 per
person) 197.2 194.7 169.4 158.1 138.8
Effective Tax Rate (%) 28.0 27.9 28.3 28.7 29.2
Gearing (%) 93.9 93.8 94.0 94.2 94.4
Interest Cover (X) 1.7 1.7 1.5 1.4 1.4
Current Ratio (X) N/A N/A N/A N/A N/A
Dividends Paid per Share ($) 4.2 3.8 3.6 3.2 3.0
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Appendix 3: CBA industry average
Financial Ratios Industry
Average*
Commonwealth Bank 30-
Jun-2015
Unit
Asset Turnover Ratio 0.04 0.04 Times
Creditors T/O 22.98 Days
Current Ratio 0.98 Times
Days Stock Held 55.52 Days
Debtors T/O 77.41 Days
Dividend Payout Ratio 58.55 74.41 Percen
t
Dividend Per Share 0.72 4.16 A$
Earnings Per Share 1.02 5.58 A$
EBITDA -104,691.34 -2,531,000.00 A$ 000
Effective Tax Rate 24.70 27.97 Percen
t
Gearing 92.68 93.93 Percen
t
Interest Cover 1.61 1.69 Times
Net Assets Per Share 8.62 32.65 A$
NPAT/Employee 205.23 197.24 A$000
Pre-Tax Margin 25.84 27.83 Percen
24

t
Return On Shareholders
Funds
13.16 17.10 Percen
t
Return On Total Assets 0.96 1.04 Percen
t
Revenue/Employee 1,041.44 986.11 A$ 000
Growth Ratios
Growth
Ratios
Industry
Average
*
Commonwealt
h Bank 30-Jun-
2015
Unit
Asset
Growth 8.92 10.36 Percen
t
Dividend
Growth
Rate
5.00 9.20 Percen
t
Employee
s Growth 0.04 3.65 Percen
t
NPAT
Growth -5.58 5.01 Percen
t
Revenue
Growth -2.06 2.25 Percen
t
Appendix 4: CBA historical current ratio (Quarterly data)
Dec. 31, 2015 0.2112
25

June 30, 2015 0.1603
Dec. 31, 2014 0.1918
June 30, 2014 0.1427
Dec. 31, 2013 0.2049
June 30, 2013 0.1162
Dec. 31, 2012 0.1687
June 30, 2012 0.1165
Dec. 31, 2011 0.173
June 30, 2011 0.0836
Dec. 31, 2010 0.184
June 30, 2010 0.0606
Dec. 31, 2009 0.155
June 30, 2009 0.0796
Dec. 31, 2008 0.1847
June 30, 2008 0.1119
Dec. 31, 2007 0.1063
June 30, 2007 0.1207
Dec. 31, 2006 0.101
June 30, 2006 0.0786
Dec. 31, 2005 0.1112
26