Financial Analysis of the National Australian Bank
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Added on 2021-05-30
Financial Analysis of the National Australian Bank
Added on 2021-05-30
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Running head: FINANCE FOR BUSINESS Finance for BusinessName of the StudentName of the UniversityAuthors NoteCourse ID
FINANCE FOR BUSINESS1Table of ContentsIntroduction:...............................................................................................................................2Description of Company:...........................................................................................................2Ownership and structure of governance of the company:..........................................................3Main Substantial Shareholders:..............................................................................................3Main people involved in Company’s Governance:................................................................4Computation of Fundamental Ratios:........................................................................................5Short Term Solvency:............................................................................................................5Long Term Solvency:.............................................................................................................6Asset Utilization:....................................................................................................................6Profitability Ratios:................................................................................................................7Market Value Ratios:.................................................................................................................7Graphical Descriptions of Results:.............................................................................................8Movement in Monthly Share Price:.......................................................................................8Comparative Analysis of Movement in Share Price Index to All Ords Index:..........................8Identifications of factors that influences the share price of the company:.................................9Calculations of Beta and the Expected Rate of Returns using CAPM:...................................10Computed Beta of the Company:.........................................................................................10Calculations of the required rate of Return using CAPM Model:.......................................11Conservative Investment:.....................................................................................................11Computation of WACC:..........................................................................................................12
FINANCE FOR BUSINESS2Weighted Average Cost of Capital for National Australian Bank:......................................12Explanation of WACC has on management evaluation of investment prospective:...........13Debt Ratio:...............................................................................................................................13Dividend Policy:.......................................................................................................................14Letter of Recommendations.....................................................................................................14Conclusion:..............................................................................................................................15Reference List:.........................................................................................................................16
FINANCE FOR BUSINESS3Introduction: The study will be based on the financial analysis of the National Australian Bank. Theanalysis of the financial performance will be carried on for National Australian Bank tounderstanding the movement in the share prices and provide the readers with the appropriaterecommendations regarding the viability of making an investment in the stocks. Acomprehensive evaluation of the financial performance will be performed which alsoaccompany the shareholding structures and people that are involved in the corporategovernance of the National Australian Bank. Fundamental ratios will be calculated to for the past two years and movement alongthe graphs relating to the all ordinary index will be carried out to understanding the nature ofmovement in shares. The report would also look into the macroeconomic factors that createsan influence on the share prices of National Australian Bank. To further understand thecapital structure of the company the CAPM model will be employed to derive the weightedaverage cost of capital that would be used as the base in choosing the rationale involved inmaking investment. The debt ratio and the dividend policy structure will be studied and aletter of recommendations would be accompanying relevant information for making aninvestment in National Australian Bank shares. Description of Company: National Australian Bank is regarded one four largest institutions in Australia basedon the market capitalisation, customers base and earnings. National Australian Bank wasplaced as 21st largest bank in world based on the measured market capitalisation (Nab.com.au2018). National Australian Bank is ranked 41st based on the total asset measured during theyear 2014. As of November 2017 National Australian Bank operates around 1590 branchesand services with approximately 4,412 ATM throughout Australia, New Zealand and Asian
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