Financial Analysis of ANZ and Commonwealth Bank

Financial for business-
ANZ V
COMMENWEALTH
Bank

EXECUTIVE SUMMARY
The report covers the brief description about the operations of ANZ and commonwealth
bank and trend analysis have been identify with the help of financial ratios. In respective report
sensitivity analysis is performed to determine marketable securities and systematic and
unsystematic risk are discussed for the selected banks. The report also summaries the calculation
of dividend payout ratio and valuable recommendation are given for stakeholder.

TASK 2
2.2. Calculation and analysis of selected performance ratios
It is very important to have a proper analysis of financial statements as it support in
measuring the financial performance of company. The depth analysis ANZ bank and
commonwealth bank have been discussed for the period of 2016 to 2018. in order to complete
the financial analysis of both bank valuable financial ratio are discussed in order to measure
ANZ bank and commonwealth bank position in context to profitability and liquidity.
Liquidity ratio:
These ratio are mainly calculated to determine the ability of company as they are able to
pay its short term liabilities. It is also used by stakeholder holder to determine the liquidity
position of company in specific time. In order to find the liquidity of both bank current ratio and
quick ratio are calculated:
Current ratio: Current assets/ current liabilities
Name of bank 2016 2017 2018
Commonwealth bank 0.17 0.16 0.18
Australia and New
Zealand Bank
0.29 0.27 0.33
Quick ratio: Total current assets- Inventory- prepaid expenses/Current liabilities.
It is another form of liquidity ratio as it describe about the liquidity position in more
descriptive manner as it does not includes prepaid expenses and inventory.
Name of bank 2016 2017 2018
Commonwealth bank 0.16 0.17 0.14
Australia and New
Zealand Bank
0.28 0.23 0.24
From the above, calculation it has been observed that Australian and New Zealand bank
is more able to pay it liabilities from its current assets in last three years.
Profitability ratio:
In business context, the profitability ratio helps to display the profitable position of
company of company within a specific time frame. This ratio is used by investors to extract out
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