Financial Analysis of Medibank Private Ltd and NIB Holdings Ltd

Selected Company- Medibank Private Ltd and NIB Holdings Ltd
financial analysis of Medibank private limited and NIB Holding Limited
Financial analysis
University Name-

Table of Contents
Introduction.................................................................................................................................................1
Description of the Reject Shop................................................................................................................1
Core activities of the Reject Shop............................................................................................................1
Competitive advantage............................................................................................................................1
Industry...................................................................................................................................................2
Financial analysis of The Reject Shop..........................................................................................................2
Liquidity ratio...........................................................................................................................................2
Current ratio........................................................................................................................................2
Quick ratio...........................................................................................................................................3
Profitability ratio......................................................................................................................................3
Net profit margin.................................................................................................................................3
Return on equity..................................................................................................................................4
Return on assets-.................................................................................................................................4
Gross profit margin..............................................................................................................................4
Solvency ratio......................................................................................................................................4
Debt to equity......................................................................................................................................5
Efficiency ratio.........................................................................................................................................5
Creditors turnover ratio.......................................................................................................................5
Inventory Turnover ratio.....................................................................................................................6
Assets turnover ratio...........................................................................................................................6
Market ratio (General investment proposal analysis).............................................................................6
Dividend payout ratio..........................................................................................................................7
Evaluation of the key points found in this financial analysis.......................................................................7
Analysis to compare the Share price movement of Reject Shop with all ordinary index.............................7
Computation of the value of the stock of the Reject Shop Company......................................................8
Computation of the dividend growth rate of Reject Shop...................................................................9
Recommendation......................................................................................................................................10
Conclusion.................................................................................................................................................10
References.................................................................................................................................................11

Appendix...................................................................................................................................................13
Introduction
With the ramified financial market factors, each and every investor needs to use financial
analysis tools before investing their capital in the particular stocks and shares. In this report,
has been take into
consideration to analyses and compare the financial performance, share valuation and capital
structure of these two companies. In the starting of this report, description of both companies,
their competitive advantages and core activities have been discussed. After that financial ratio
analysis has been used to identify the ups and down in the financial performance of company.
Afterward, share price valuation analysis has been done by using the dividend growth models so
that the share price value of company could be assessed. In the end , share price comparison of
the company with another and all ordinary stock exchange have been done so that it could be
determined whether investing capital in organization would be beneficial for the investors to
create value on its investment or not. There are several financial analysis tools have been used
such as Du pont analysis, capital budgeting, dividend growth model, ratio analysis and share
price valuation methods to determine whether company has been creating value on the invested
capital of the investors or not.
Description of the Medibank and NIB Holding Limited
The Medibank Private limited is the Australian national private health insurer which has been
offering its banking and insurance services to its clients throughout the time. It is the second
largest health insurance service provider after BUPA. It has covered at least 29.1% market share
in the insurance industry of the Australia. This company has created value on its investment by
offering insurance services to its clients. Currently, all the shares of company are traded at AUD
$ 3.3 which is 12% higher as compared to last year data.

On the other hand, NIB holding Limited is also one of the health insurer which offers health
insurance and financial services to clients. It has increased its capital investment by 20% with a
view to cover more market share in the insurance sector of the Australia.
Core activities of the Medibank Private Limited
The core activity of Medibank is to provide insurance services to clients so that they could their
health insurance from the most trusted brands.
Competitive advantage
The main competitive advantage of Medibank Organizaiton is related to its health
insurance services. it has been providing unique health insurance services at very low cost which
will help clients to avail these health services at very least cost. It will assist company to grab
more market share.
Industry
The Medibank is indulged in offering its health insurance to its clients in insurance and financial
sectors with the increase in the GDP rate of the Australia; it would be positive factor for the
Medibank to strengthen its overall turnover and market share.
Financial analysis of Medibank private Limited
The financial analysis of Medibank private Limited is used to evaluate the liquidity, profitability,
efficiency and market ratio of company and how well it has performed throughout the time.
Liquidity ratio
The liquidity ratio is used to measure how well company could pay off its long term and short
term liabilities out of its available current assets investment. This ratio has been divided into two
main parts.
Current ratio
The current