Financial Analysis of National Australian Bank and Westpac

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HI5020 Corporate Accounting

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Executive Summary
In this financial report financial statements of two banking companies have been
analyzed in respect of changes made in cash flow statement, statement of owner’s equity,
accounting of taxation and other comprehensive income statement during last three years. For
this purpose detailed investigation of each of accounting period has been performed to analyse
and compare each line item of each of cash flow statement, statement of change in equity,
accounting of taxation and statement of comprehensive statement in respect of both the selected
companies. The companies selected for this purpose are National Australian Bank and Westpac.

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Contents
Executive Summary.........................................................................................................................2
Introduction......................................................................................................................................4
Accounting of Owners Equity.........................................................................................................5
Accounting of cash flow statement................................................................................................10
Accounting for other comprehensive income statement...............................................................16
Accounting for Corporate Income tax...........................................................................................19
References......................................................................................................................................27

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Introduction
The present report is developed for providing an analysis of the two public listed
companies listed on the Australian Securities Exchange (ASX). In this context, the companies
selected are from the banking industry, that are, Westpac Banking Corporation and National
Australia Bank (NAB) that are known to be one of the largest financial institutions within
Australia. Westpac is recognized as first major Australia bank that provides a diverse range of
financial services and is known to be one of big four banks within Australia. The bank is
established in the year 1817 and is attributed to have played a significant role in the economic
and social development within Australia. The vision of the banking corporation is to become as
one of the biggest service companies providing support to the customers and communities to
grow and prosper. The banking corporation is involved in providing diverse range of banking,
wealth management and financial services. The banking corporation aims to create maximum
value for the shareholders and as such emphasize on giving superior customer experience across
its financial and banking solutions (Westpac Group: About us, 2018).
Another publicly listed banking corporation selected is National Australia Bank (NAB)
that is known to be one of the largest financial institutions in Australia based on market
capitalization. The financial services provided by the banking corporation includes personal
banking financial solutions such as internet banking, accounts, insurance, credit cards, home and
personal loans. The banking corporation since its establishment in the year 1982 is involved in
providing high quality personalized banking services within Australia and New Zealand and has
evolved as one of the largest bank in the world in terms of total assets. NAP is known to operate
about 1,590 branches and service centers and 4,412 ATM’s across Australia, New Zealand and

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Asia. NAB is known to provide about 12.7 million customers across the world. This report is
developed for examining the financial statements of the selected two banking corporation’s for
facilitating the decision-making process of investors (National Bank Australia: About us, 2018).
The report undertakes an evaluation of the statement of equity, cash flow statement, income
statement and income tax accounting of the selected banking corporations for evaluation of their
financial performance. The evaluation of the financial statements of these banks is done for the
last three financial years by analyzing the financial statement and the significant information
disclosed in the footnotes of the financial report. The analysis of the financial statements of the
banking corporations will help in examining their financial performance by examining the
significant changes that have occurred in the key financial items and identifying the reasons
responsible for the corresponding changes. This will help the investors in analyzing the future
performance of the selected companies and taking accurate investment decisions.
Accounting of Owners Equity
(i) List of each item of equity and changes in each item over the past years

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Following image shows the each line item of owner’s equity for NAB