Financial Analysis of Medibank Private Limited.

Running head: BUSINESS FINANCE
Business Finance
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Name of the University:
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1MEDIBANK PRIVATE LIMITED
Executive Summary
The aim of the assignment is to conduct a financial analysis on the Medibank Private Limited
and the relevant financial performance of the company. The background of the company was
studied and the relevant research, which included the historical background of the company, was
evaluated. The financial analysis of the company was conducted with the help of the ratio
analysis and the relevant analysis was evaluated. The expected return on the stock was calculated
using the Capital Asset Pricing Model and the relevant analysis for the company was conducted
with the help of the same. The capital structure of the company was analyzed and the relevant
analysis for the company was conducted for the company for the trend period of 2016-18.

2MEDIBANK PRIVATE LIMITED
Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................4
Financial Ratio.............................................................................................................................4
Liquidity Ratio.........................................................................................................................4
Profitability Ratio....................................................................................................................6
Market Value Ratio..................................................................................................................8
Comparison of Share Price Movements......................................................................................9
Cost of Equity............................................................................................................................11
Capital Structure........................................................................................................................12
Conclusion.....................................................................................................................................14
Recommendations..........................................................................................................................14
Reference.......................................................................................................................................16

3MEDIBANK PRIVATE LIMITED
Introduction
The Medibank Private Limited is a national private health insurance company located in
the Australia. Medibank is the second largest company in the insurance sector after Bupa
Insurance Company having a market share of around 29.1%. The company is listed on the
Australia Stock Exchange with the ticker symbol MPL. The Medibank Company started as a
private limited company in the year 1975 with the aim of providing health services in the
Australia (Cucchiella, D’Adamo and Gastaldi 2015). The company provides the insurance
services in the various filed including health, travel, pet insurance, life insurance and various
other products and services. The company has a wide range of diversified portfolio including
various products and services, which makes the revenue baser of the company diversified (Vogel
2014). The company has a subsidiary company operating in the health services as Australian
Health Management. The company is having a good base of employees with an all-2700
employee in the organization. The financial statement of the company was analyzed and the
relevant financial performance of the company was analyzed using the ratio analysis for
evaluating the financial performance of the company from the year 2016-2018 (Al Nimer,
Warrad and Al Omari 2015). The liquidity position of the company and the profitability position
in the company plays an important role and the same has been evaluated using the financial year
report of the company. The market value ratio of the company was evaluated for assessing the
pricing and the valuation of the company in terms of Price to Earnings Ratio and the earning per
share of the company. The expected return for a company is evaluated with the help of the
Capital Asset pricing model and the same was evaluated for the company by incorporating the
Return generated from the market and the risk free rate in the Australian economy. The relevant
beta of the Medibank Private Ltd in order to find out the expected return of the stock.