Financial Analysis of Kiwi Bank: Ratio Analysis and Project Evaluation

This report provides a financial analysis of the Kiwi Bank through ratio analysis and project evaluation. It includes profitability, liquidity, efficiency, leverage, and growth ratios. The report also provides recommendations for potential investors. Kiwi Bank is a subsidiary of New Zealand Post Limited and provides personal banking, business banking, and other wealth maximization services. The report analyzes the financial performance of the bank for the years 2016 and 2017. The report concludes that the profitability position of the Kiwi Bank was not satisfactory in 2017 as compared to 2016. The report recommends potential investors to invest in the company after considering the financial ratios. The report also evaluates different projects of the company through NPV, IRR, and WACC.

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Diploma in Business
BUS 202Finance
Assessment2
Name:
ID:
Email:
Teacher:

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Executive summary
The present report is undertaken to provide a financial analysis of the Kiwi Bank. In this
context, the report has carried out the financial ratio analysis of the bank for examining its
business performance. The results obtained from the ratio analysis will help in providing
recommendation to the potential investors for investing in the company. The recommendations
obtained from the ratio analysis will help in improving the financial performance of the
company. In addition to this, the NPV, IRR and WACC of different projects are calculated to
provide the best possible option for the company for investing purpose. The use of different
capital budgeting techniques in the report will provide the company in selecting a best possible
option for the investment purpose.

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Contents
Executive summary.....................................................................................................................................2
Introduction.................................................................................................................................................4
Financial Ratios...........................................................................................................................................4
Ratio Analysis.............................................................................................................................................6
Profitability Analysis...............................................................................................................................6
Liquidity Analysis...................................................................................................................................8
Efficiency Analysis.................................................................................................................................9
Leverage Analysis.................................................................................................................................10
Growth Analysis....................................................................................................................................11
Recommendation to Potential Investors.................................................................................................11
Project Evaluation.....................................................................................................................................12
Weight-age Average Cost of Capital for various given projects................................................................17
Conclusion.................................................................................................................................................18
References.................................................................................................................................................19
Appendix...................................................................................................................................................20

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Introduction
Kiwi Bank is the subsidiary company which is wholly owned by the state owned
enterprise New Zealand Post Limited. Kiwi Bank provides some of its major services through
Postshops (Post Offices) and from the bank branches situated in many parts of the country. The
Kiwi Bank is majorly owned by the New Zealand Government and the chairperson in the board
of directors is the former New Zealand Prime Minister Jim Bolger from 2001-2010. Currently
the chairperson of the board of director is Susan Macken. The core business activities of the
Kiwi Bank are personal banking, Kiwi Saver, business banking and other wealth maximization
services. The personal banking services of the Kiwi Bank includes home loan, debit card
services, credit card services, saving accounts, everyday accounts, investment services, other
loans and various insurance services (Services, 2017). The business banking services provided
by the Kiwi Bank includes lending services, cheque accounts, investment, payment services,
merchant banking, cards services and other important services. International services includes
money transfers both online and manual system, foreign exchange currency services and other
services involving the international transactions. Kiwi Bank was established in year 2002 and the
mission of the bank is to win the hearts of Kiwis by providing better service, better products,
lower fees and better interest rates (About Us, 2017).
Financial Ratios
Profitability Ratios

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Ratio Formula 2017 2016 Change in Percentage
Gross Profit 368 373
Net Sales 831 898
Answer 0.44 0.42 6.61%
Net profit 53 124
Net Sales 831 898
Answer 0.06 0.14 -53.81%
Net profit 53 124
Total Assets 20616 19357
Answer 0.00 0.01 -59.87%
Net profit 53 124
Equity 1380 1129
Answer 0.04 0.11 -65.03%
Profitability Ratio
Gross Profit Margin
Net Profit Margin
Return on Assets
Return on Equity
Liquidity Ratios
Ratio Formula 2017 2016 Change in Percentage
Current Assets 20061 18477
Current Liabilities 16054 14921
Answer 1.25 1.24 0.91%
Cash + Marketable
Securities + Accounts
Receivable
772 833
Current Liabilities 16054 14921
Answer 0.05 0.06 -13.86%
Cash Equivalents +
Marketable Securities 464 509
Current Liabilities 16054 14921
Answer 0.03 0.03 -15.27%
Current Assets 20061 18477
Current Liabilities 16054 14921
Answer 4007.00 3556.00 12.68%
Liquidity Ratios
Cash Ratio
Working Capital
Current Ratio
Acid Test
Efficiency Ratios

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Ratio Formula 2017 2016 Change in Percentage
et Sales 831 898
Accouts Receivables 308 324
Answer 2.70 2.77 -2.65%
Cost of Goods Sold 463 525
Average Inventory 0 0
Answer #DIV/0! #DIV/0! #DIV/0!
Purchases 463 525
Accounts Payable 71 139
Answer 6.52 3.78 72.65%
Net Sales 831 898
Average Total Assets 20616 19357
Answer 0.04 0.05 -13.11%
Efficiency Ratios
Accounts Receivable Turnover
Inventory Turnover
Payables Turnover
Total Asset Turnover
Leverage Ratio
Ratio Formula 2017 2016 Change in Percentage
Total Liabilities 19236 18228
Total Assets 20616 19357
Answer 0.93 0.94 -0.91%
Total Equity 1380 1129
Total Assets 20616 19357
Answer 0.07 0.06 14.77%
Total Debt 19236 18228
Total Equity 1380 1129
Answer 13.94 16.15 -13.66%
Equity
Debt to Equity
Leverage Ratio
Total Debts

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Growth Ratio
Ratio Formula 2017 2016 Change in Percentage
Net Income - Prefered
Dividends 53 124
Common Shares 737 400
Answer 0.07 0.31 -76.80%
Market Price Per
Share 0 0
EPS 0.07 0.31
Answer 0.00 0.00 #DIV/0!
Growth Ratio
EPS
PE Ratio
Ratio Analysis
The financial statements are most part for analyzing the financial performance of the
company and to make the necessary decisions. There are many use of the analysis of the
financial performance as it helps in taking the business decisions and also help investors to make
the proper decisions regarding the investment in the particular company. In the competitive
environment, it is essential for the business managers to have proper overview of the internal and
external factors that impact the financial performance of the company. There are various
methods available to make evaluation of the financial performance of the company. Common
size statement analysis and ratio analysis are some of the most used methods to review the
financial performance of the company (Bull, 2007). Ratio analysis is most widely financial tools
to get the idea on how the company is performing during the year and it allows comparing the
past performance. It can be said that ratio analysis is mathematical tool that helps in interpreting
the financial position and to make a reliable comment on the financial health of the company.
This method not only helps the business managers to frame the strategies for the future budgets
and other financial requirements but also allows investors to have proper overview of the
financial health of the company during the year as well as in past years. It helps investors to take
the investment decisions so that they can get the best returns on their investment. The major
categories of ratios that are widely used in calculations are given below:
 Profitability ratios
 Liquidity ratios
 Efficiency ratios

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 Leverage ratios
 Valuation and Growth ratios
In this report the financial performance of the Kiwi Bank has been evaluated using the
ratio analysis technique. In order to calculate the ratios of Kiwi Bank for year 2017 and 2016, the
annual reports has been extracted from the company website and ratios are being calculated in
above section of the report and its detailed analysis has been presented below.
Profitability Analysis
Profitability analysis aims to measure the profit earning capacity of the company. This
ratio analysis tells whether company is making profit or not. This analysis provides information
regarding the efficiency of the company on how company uses its resources in best way to earn
the good returns. Some of the major profitability ratios are gross profit margin, net profit margin,
return on assets and return on equity (Cooper, 2012).
2017 2016
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
0.5
Profitablity Ratio
 Gross profit margin: Gross profit means revenue left after deduction of all expenses
related of cost of goods sold. Gross profit ratio is calculated by dividing the gross profit
by net revenue. This ratio is expressed in terms of percentage. It is expected by the
companies that gross profit ratio must be in between 30% to 50 % in order to cover all the
operating expenses of the company. Kiwi Bank has the gross profit ratio of 42 % in year
2016 and it got increased to 44% in year 2017 that indicates that company has earned
better returns in both the years and there is increasing trend in this ratio.

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 Net profit ratio: Net profit refers to the amount of income left after charging all the
operating expenses, manufacturing expenses, tax expenses and any other expenses related
to business for the year. This profit is meant to be distributed to the shareholders or to be
kept for reserves purposes. This ratio is very important for the investor’s point of view.
The net profit ratio is calculated by dividing net profit by the net revenue. In year 2016
the net profit of the Kiwi Bank is 14 % but it got reduced to 6 % in year 2017 that shows
there was much decrease in this ratio in the current year. There was decreasing trend in
the net profit ratio for years 2016 and 2017.
 Return on Assets: Assets represents various resources either tangible or intangible that
are used by the management to earn the revenue. It is highly expected by the management
of the company to earn the best returns from their investment in the assets of the
company. So this ratio helps the managers as well as investors to have looked at the
percentage of returns earned on the assets employed during the year. It is calculate as net
profit divided by the total assets of the company. Kiwi Bank has earned the return on
equity of 1%in year 2016 and it got further reduced in year 2017 that shows that company
is not able to utilize the available assets properly. There has been declining trend in this
ratio for years 2016 and 2017.
 Return on equity: Equity as the name suggest means part of the capital which has been
financed through issues of common shares or owner’s capital. Other components of the
equity are reserves, controlled interest in wholly owned subsidiary companies etc. Return
on equity means percentage of net profit that has been earned on the equity part of the
capital. Every investor wants to have better return on their investment so this ratio is very
vital for investor’s point of view. Return on equity for year 2016 was 11 % and it got
reduced to 4% in year 2017. So it can be said that profitability position of the Kiwi Bank
was not satisfactory in year 2017 as compared to year 2016. There was overall decline in
profitability ratios in year 2017 when compared to year 2016 (Drake and Fabozzi, 2012).
Liquidity Analysis
Liquidity analysis means evaluating the short term financing portion of the company to
pay the current liabilities of the company. Liquidity means short term assets of the company that
can be converted into cash and cash equivalents in very short period of time generally one year.
Some of the important liquidity ratios are Current Ratio, quick ratio and cash ratio. Managers of

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the company are very interested in these ratios as they guide them how much working capital
company keeps to pay the liabilities.
2017 2016
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.25 1.24
0.05 0.060.03 0.03
Liquidity Ratio
 Current Ratio: Current Ratio measures the company ability to pay the short term
liabilities of the company. It is calculated using the formula current assets divided by the
current liabilities. Current assets refer to those assets that can be converted into cash and
cash equivalents in one year time period. These assets can be easily located in the balance
sheet under assets section. On the current liabilities refers to liabilities that are required to
be paid by the company during the year. The current ratio of the company was 1.24 times
in year 2016 and it was almost same in year 2017 i.e. 1.25 times. Looking the current
ratio of Kiwi Bank in both the years it can be said that company poses enough current
assets to pay the current liabilities but company has failed to cross the ideal benchmark if
2:1 in case of current ratio (Fridson and Alvarez, 2011).
 Quick Ratio: Quick Ratio is similar to current ratio but there is very small difference
between these two. Quick ratio does not take into consideration the inventory and prepaid
expenses while calculating the quick assets. Quick ratio of the company is 0.06 times in
year 2016 and it got reduced to 0.05 times in year 2017. So it can be said that company
does not have proper quick assets t pay the liabilities at regular interval. There is
declining trend in the quick ratio of the company.

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 Cash Ratio: Cash ratio means availability of cash with the company in form of securities,
cash in hand and cash in bank to utilize them for paying the current liabilities as and
when it takes place. Cash ratio of the Kiwi Bank was 0.03 times in both the years that
clearly indicate that financial health of the company was very weak as there was no
sufficient availability of fund to pay the short term liabilities.
 Working Capital Ratio: It is the difference of current assets less current liabilities. In case
of Kiwi Bank the working capital ratio was positive 3556 million dollar in year 2016 and
it got increased to 4007 million dollars in year 2017. So it there is increasing trend in the
working capital ratio.
Efficiency Analysis
Efficiency analysis aim to examine the company efficiency on various activities
performed in the organization. There are multiple activities performed in the organizations such
as accounts receivable, accounts payable, inventory management etc. In this section, there will
be evaluation of the various activities using the ratios.
2017 2016
0
1
2
3
4
5
6
7
2.7 2.77
0 0
6.52
3.78
0.04 0.05
Efficiency Ratios
 Account receivable turnover ratio: This ratio find out number of times accounts
receivables are collected during the year. The purpose of this ratio is to calculate is to
determine the efficiency of the company to collect the accounts receivables. It is
calculated as credit sales divided by account receivable. The accounts receivable turnover
ratio was 2.77 times in year 2016 and it got reduced to 2.70 times in year 2017. So it can
be said that efficiency of the company on collecting the accounts receivable was
decreased in year 2017 as compared to year 2016 (Koller, 2015).

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 Inventory Turnover Ratio: This ratio determines the number of times inventory been used
to earn the income. The inventory turnover ratio must be good in order to earn good
revenue over the year.
 Account Payable Turnover Ratio: Likely the account receivable turnover ratio, this ratio
will calculate number of times the account payable is paid as to credit purchase. It is
calculated as account payable divided by the average payable. Account payable was 3.78
times in year 2016 and it got increased to 6.52 times in year 2017 that shows Kiwi Bank
has paid more frequently in year 2017 as compared to year 2016.
 Asset Turnover Ratio: Asset turnover ratio defines as amount made in form of revenue
using the assets of the company. The asset turnover ratio was 0.05 times in year 2016 and
it got reduced to 0.04 times in year 2017. So it can be said that efficiency of the Kiwi
Bank in making the revenue using the assets git reduced in year 2017 as compare to year
2016.
Leverage Analysis
Leverage is defined as capital fund that comprises of fixed payment at regular interval. In
leverage analysis there is calculation of various ratios that helps to determine the capital structure
of the company and also helps in knowing level of debt fund company keeps to fund assets of the
company.
207 2016
0
2
4
6
8
10
12
14
16
18
0.93 0.94000000000000
10.07 0.06
13.94
16.15
Leverage Ratio

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 Total Debt ratio: This ratio tells level of debt against the total assets of the company. It is
calculated as total debt divided by the total assets. The ratio was 0.94 in year 2016 that
indicates that 94 % assets was financed through use of debt capital and in year the total
debt ratio was 0.93 that shows there was no change in ratio. There is no rend in this ratio
and it can be said that Kiwi Bank is highly leveraged company as maximum part of the
assets was financed through debt capital (Macintosh, 2013).
 Equity Ratio: Likely the debt ratio, this ratio tells level of total assets financed through
equity capital. This ratio is calculated as equity capital divided by the total assets. Equity
capital refers to the owner’s capital as it financed through issue of shares and it is also
known as unleveraged capital. Equity ratio was 0.06 in year 2016 and 0.07 in 2017 that
indicates that only 6 % capital was financed through equity capital.
 Debt to equity ratio: This ratio tells times the debt capital is used to fund the assets as
compare to equity capital. Ideally there must be more equity capital and debt capital
should not more than 50 % of equity capital in order to have balanced capital structure.
Debt equity ratio was 16.15 times in year 2016 and it got reduced to 13.94 times in year
2017. It shows that more than 90 % capital was financed through the debt capital which is
not the ideal capital structure for such companies.
Growth Analysis
2016 2015
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.07
0.3100000000000
01
0 0
Growth Ratio
The growth ratio provides n analysis of the market performance of a company through
assessing its growth pattern.

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 The EPS (Earnings per share) indicates the profitability of a company through assessing
the earnings realized to each outstanding share of stock. As depicted in the above
analysis, the EPS of the company has reflected a negative trend from the year 2016 to
2017 and thus reflecting its negative market growth (Mikołajek Gocejna, 2014).
 On the other hand, the P/E ratio provides an analysis of the current share price of a
company in comparison to the per share earnings realized. The company is having a price
to earnings ratio of zero in both the years indicating that it is having very poor market
performance.
Recommendation to Potential Investors
It is recommended on the basis of overall ratio analysis that the company is not having a
good financial position as can be interpreted from the findings of its different financial ratios
such as profitability, solvency and liquidity. The potential investors are not recommended to
invest in the bank as its financial performance is not stable. The banking sector is highly
unpredictable and therefore the bank having weak financial performance is not a good option for
the potential investors.

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Project Evaluation
Plan A - Captain Cook
Plan B - Marine
Sailing
Purchase amount
75,
000 Purchase amount
60,
000
Life 9 year Life 9
Maintenance cost Y1-
Y4
2
,500
per year for first 4
year
Maintenance cost Y1-
Y6
2
,000
3
,000 last 5 year
Increasing cost
maintenance 500
Maintenance cost Y9
20,
000 Maintenance cost Y5
22,
000
Salvage value
15,
000 Salvage value
11,
000
Marketing study
300,
000
Revenue estimated
27,
000 per year
Current net income
8
,000
Disposal of current boat
5
,000
Book value of current
boat
9
,600
Rate of return 10%
Current tax 30%
Depreciation Calculation
a)

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Initial Investment- Salvage Value
Useful Life
75,000- 15,000
9
60,000
9
Depreciation Expense of Captain Cook = 6666.66
b)
Depreciation Calculation
Initial Investment- Salvage Value
Useful Life
60,000- 11,000
9
49,000
9
Depreciation Expense of Marine Sailing = 5444.44

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Plan A Cpatain cook Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
P&L Statement
Revenue 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000
Depreciation expenses (6,666) (6,666) (6,666) (6,666) (6,666) (6,666) (6,666) (6,666) (6,666)
Maintenance and Rebuilding cost (2,500) (2,500) (2,500) (2,500) (3,000) (3,000) (3,000) (3,000) (20,000)
Opportunity cost (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000)
Loss on sales current boat (4,600)
Profit before tax (4,600) 9,834 9,834 9,834 9,834 9,334 9,334 9,334 9,334 (7,666)
Taxable 0 (2,950) (2,950) (2,950) (2,950) (2,800) (2,800) (2,800) (2,800) 0
Profit after tax (4,600) 6,884 6,884 6,884 6,884 6,534 6,534 6,534 6,534 (7,666)
Cash flow statement
Initial Investment (75,000)
Revenue 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000
Maintenance and Rebuilding cost (2,500) (2,500) (2,500) (2,500) (3,000) (3,000) (3,000) (3,000) (20,000)
Opportunity cost (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000)
Tax expenses 0 (2,950) (2,950) (2,950) (2,950) (2,800) (2,800) (2,800) (2,800) 0
Salvage value 15000
Sales current boat 5,000
Net cash flow (70,000) 13,550 13,550 13,550 13,550 13,200 13,200 13,200 13,200 14,000
NPV 7,468
IRR 12.63%

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Part b Marine Sailing Year 0 Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9
P&L Statement
Revenue 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000
Depreciation expenses (5,444) (5,444) (5,444) (5,444) (5,444) (5,444) (5,444) (5,444) (5,444)
Maintenance and Rebuilding cost (2,000) (2,500) (3,000) (3,500) (22,000) (4,000) (4,000) (4,000) (4,000)
Opportunity cost (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000)
Loss on sales current boat (4,600)
Profit before tax (4,600) 11,556 11,056 10,556 10,056 (8,444) 9,556 9,556 9,556 9,556
Taxable 0 (3,467) (3,317) (3,167) (3,017) 0 (2,867) (2,867) (2,867) (2,867)
Profit after tax (4,600) 8,089 7,739 7,389 7,039 (8,444) 6,689 6,689 6,689 6,689
Cash flow statement
Initial Investment (60,000)
Revenue 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000 27,000
Maintenance and Rebuilding cost (2,000) (2,500) (3,000) (3,500) (22,000) (4,000) (4,000) (4,000) (4,000)
Opportunity cost (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000) (8,000)
Tax expenses 0 (3,467) (3,317) (3,167) (3,017) 0 (2,867) (2,867) (2,867) -2867
Salvage value 11000
Sales current boat 5,000
Net cash flow (55,000) 13,533 13,183 12,833 12,483 (3,000) 12,133 12,133 12,133 23,133
NPV 13,049
IRR 15.59%
The NPV (Net Present Value) is regarded as the difference between the cash inflows and
the outflows and can be stated as the most effective technique for examining the profitability of a
project. The positive value of the NPV indicates that the earnings realised greater than the project
cost. The positive value indicates that the project will be a profitable and negative NPV is
indicative of the net loss realised from a project. Thus, the project manager should consider only
those projects that have positive NPV values for ensuring the project is profitable. The future
value of the cash flows is measured through the use of the concept of time value of money in the
NPV technique. The NPV value provides an analysis of the value of $1 in present to that in the
future. On the other hand, IRR (Internal Rate of Return) is a method used in capital budgeting for
analysing the profitability of a given project. The analysis of the profitability of a project helps in
supporting the investment decisions for the project manager whether to invest in a respective

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project or not. The IRR is regarded as the particular discount rate at which the NPV of all the
cash flows realised from a project becomes zero. The project is accepted if the IRR obtained is
greater than the given rate of return (Mumba, 2013).
On the basis of NPV and IRR calculated of the both the projects, it can be stated that both
the projects are profitable as they have positive values of NPV and IRR. However, the project B
can be regarded as much profitable as its NPV and IRR values are much higher as compared to
the project A. The IRR of project B is much higher than that of project A depicting that the
project B is expected to provide a strong growth in the future period of time. Also, the project A
NPV value is much less as compared to project B that further supports undertaking the
investment in the project B. The NPV value is regarded as better technique of analysing the
profitability of a project in comparison to IRR as it reflects the addition in shareholder’s wealth
that cannot be predicted from the IRR method. As the value of NPV is much higher of project B,
it should be accepted in comparison to project A for investment purpose.

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Weight-age Average Cost of Capital for various given projects
WACC for each project
Cost Weight After tax cost Cost Cost of capital
Project A 400,000$ Debt 0.5 8.00% 4.00%
Preferred shares 0.1 10.00% 1.00%
Ordinary shares 0.4 15.00% 6.00%
IRR 12.0% Total WACC 11.00% 44,000$
1.00%
Cost Weight After tax cost Cost Cost of capital
Project B 850,000$ Debt 0.5 7.80% 3.90%
Preferred shares 0.1 10.50% 1.05%
Ordinary shares 0.4 16.00% 6.40%
IRR 13.5% Total WACC 11.35% 96,475$
2.15%
Cost Weight After tax cost Cost Cost of capital
Project C 600,000$ Debt 0.5 8.00% 4.00%
Preferred shares 0.1 10.00% 1.00%
Ordinary shares 0.4 15.00% 6.00%
IRR 11.0% Total WACC 11.00% 66,000$
0.00%
Cost Weight After tax cost Cost Cost of capital
Project D 1,050,000$ Debt 0.5 7.50% 3.75%
Preferred shares 0.1 11.00% 1.10%
Ordinary shares 0.4 16.50% 6.60%
IRR 15.0% Total WACC 11.45% 120,225$
3.55%
Weighted average cost of capital helps to calculate the firm’s overall cost of capital for
the various funds used as the source of input of capital that is divided proportionately. The
various sources of capital are common stock, preferred stock, bonds and long term bonds. All
these sources of capital are divided proportionately using the weight of each capital. The increase
in WACC reflects increase in overall cost of capital which can be affected due to many reasons.
WACC depends on various factors such as after tax cost of capital of various sources of funds,
proportion of weights of each capital, and tax rate applies on the firm. On evaluating the above
projects in details it can be said that all four projects are categorized on the basis of amount
invested in each project. So it can be said that cost of capital will completely depends upon the
amount invested in the project not any factor as other factors will remain constant in every
option. Based on the above calculation it can be said that all the projects are acceptable as all the
projects have positive IRR and are greater than WACC. It indicates that there is positive amount
of return if any project is undertaken. The highest return (IRR) has been received in Project D

21
and difference between IRR and WACC is also highest for this project. So it is recommended to
accept the project D in order to earn best returns (Koller, 2015).

22
Conclusion
Thus, it can be inferred from the overall financial analysis held in the report that Kiwi
bank need to improvise on its financial performance. The company is not performing well as
interpreted from the results of its ratio analysis. The potential investors should carry out a detail
financial analysis of the company before taking potential investment decision. The company
operates in highly unpredictable banking sector and therefore it is highly important for the
investors to analyze its financial performance for securing their investment. Also, the report has
provided an understanding of the usefulness of different capital budgeting techniques such as
NPV, IRR and WACC in selecting a feasible project option.

23
References
About Us. 2017. Kiwi Bank. Retreived online 30 November, 2017, from
https://workforus.kiwibank.co.nz/about-us/home
Bull, R. 2007. Financial Ratios: How to use financial ratios to maximize value and success for
your businesses. Elsevier.
Cooper, K. et al. 2012. Public Sector Accounting and Accountability in Australia. UNSW Press.
Drake, P. P. and Fabozzi, F. J. 2012. Analysis of Financial Statements. John Wiley & Sons.
Fridson, M. S. and Alvarez, F. 2011. Financial Statement Analysis: A Practitioner's Guide. John
Wiley & Sons.
Koller, T. et al. 2015. Valuation: Measuring and Managing the Value of Companies. John Wiley
& Sons.
Macintosh, N. 2013. Accounting, Accountants and Accountability. Routledge.
Mikołajek-Gocejna, M. 2014. Investor Expectations in Value Based Management: Translated by
Klementyna Dec and Weronika Mincer. Springer.
Mumba, C. 2013. Understanding Accounting and Finance: Theory and Practice. USA: Trafford
Publishing.
Services. 2017. Kiwi Bank. Retreived online 30 November, 2017, from
https://www.kiwibank.co.nz/personal-banking/

24
Appendix
- Financial statements/reports ( Profit and Loss Statements, and Balance Sheet) are
used for calculation