Financial and Economic Interpretation and Communication

Running Head: FINANCIAL AND ECONOMIC INTERPRETATION AND
COMMUNICATION
Executive Summary
Westpac that is also known as Westpac Banking Corporation is the Australian Bank
as well as the provider of the financial services that is headquartered in Sydney and listed on
the indices of ASX. It is the first bank of Australia that have various ranges of the financial
packages for supporting the business, personal or the corporate needs. Hence, this report will
include the discussion as well as providing investor report on the changes of the financial
information as well as non-financial information for Westpac Banking Corporation.
Moreover, the situations prevailing in the organization will be analyzed and based on that
overall picture will be reviewed and then presented to the stakeholders that is regarding the
analysis of market. Hence, analyzing the financial as well as non-financial information are
important and useful for taking key decisions by the investors for the investment purposes.
Analysis
Operating Profit Margin 2018 2017
Operating Profit 11,731.00$ 11,515.00$
Revenue 8,099.00$ 7,997.00$
Formula 1.45 1.44
Assets Turnover 2018 2017
Revenue 8,099.00$ 7,997.00$
Total Assets 879,592.00$ 851,875.00$
Formula 1% 1%
Current Ratio 2018 2017
Current Assets 32,221.00$ 25,525.00$
Current Liabilities 18,137.00$ 21,907.00$
Formula 1.78 1.17
Debt Equity Ratio 2018 2017
Long Term Debt 796,882.00$ 768,626.00$
Shareholders' Funds 64,521.00$ 61,288.00$
Formula 12.35 12.54
Dividend Yield Ratio 2018 2017
Dividend Paid 5,769.00$ 4,839.00$
Market Price of Share 29.69$ 34.48$
Formula 194.31$ 140.34$
Financial Leverage Ratio
Market Value Ratio
Profitability Ratio
Efficiency Ratio
Liquidity Ratio
Figure 1: Ratio Analysis
Interpretation
Financial Results
Financial results of the Westpac are shown by its profitability, efficiency, liquidity,
financial leverage as well as market value ratio. The operating profit margin of the
organization shows that the organization has low profitability in terms of its operating profit
over revenue that was 1.44 and 1.45 for the year 2017 and 2018. It indicates that the company
is making profit but not that much that leads to the high financial risk and not able to control
the expenses for earning the profit (Westpac.com.au. 2019).Moreover, the assets turnover
shows that the turnover from the assets is same over both the years that is 1%,which means
that the assets of the company is not able to generate enough turnover to the company.
Further, the liquidity ratio of the company was 1.17 and 1.78 of the year 2017 and 2018 that
means that there was 0.61 increases in the liquidity position of the company, which indicates
that the company is capable for paying its short-term liabilities by its short-term assets
(Omaret al. 2014). The financial leverage ratio of Westpac was 12.54 and 12.35 for the year
2017 and 2018 that means that the company is dependent on high level of debt out of the