Professional Project on Debt Management
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Added on 2020-05-28
Professional Project on Debt Management
Added on 2020-05-28
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Running head: PROFESSIONAL PROJECTHow debt management will improve the expected profit of the Commonwealth BankName of the Student: Student ID No: Unit Name: Unit Code: Tutor’s Name: Name of the University: Assignment No: Assignment Title: Due Date: Date Submitted: Author’s Note:
1PROFESSIONAL PROJECTDeclaration I have read and understand the Rules Relating to Awards (Rule 3 Section 18 – AcademicMisconduct Including Plagiarism) as contained in the SCU Policy Library. I understand thepenalties that apply for plagiarism and agree to be bound by these rules. The work I amsubmitting electronically is entirely my own work. Signed:(Please type your name)Date:
2PROFESSIONAL PROJECTExecutive Summary The professional project that is under consideration looks to explain how debt management isassociated with the expected profit of Commonwealth Bank in relation to the other banks inAustralia. The other banks that have been chosen are Westpac and ANZ Bank respectively.The research has framed the research questions and the objectives of the paper in accordanceto which the researcher has agreed to take the research ahead. The literature review explainsthe advices provided by other researchers and websites that associate to debt management.Quantitative data has been used in order to proceed with data analysis so that the financialfigures of the paper can be assessed and thereby outcome of the paper can be achieved.
3PROFESSIONAL PROJECTTable of ContentsChapter 1: Introduction..............................................................................................................41.1 Problem Statement...........................................................................................................41.2 Research Aims and Objectives.........................................................................................51.3 Research Questions..........................................................................................................5Chapter 2: Literature Review.....................................................................................................6Chapter 3: Research Methodology.............................................................................................83.1 Data collection process....................................................................................................83.2 Data Analysis...................................................................................................................9Chapter 4: Data Analysis and Findings....................................................................................104.1 Descriptive Statistics......................................................................................................104.2 Correlation......................................................................................................................12Chapter 5: Discussion..............................................................................................................145.1 Descriptive Statistics......................................................................................................145.2 Correlation......................................................................................................................14Chapter 6: Conclusion and Recommendation..........................................................................156.1 Addressing the aims and the questions..........................................................................156.2 Limitation.......................................................................................................................156.3 Recommendation............................................................................................................15Reference List..........................................................................................................................16Appendix..................................................................................................................................20
4PROFESSIONAL PROJECTChapter 1: IntroductionIn the modern world, management of debt has been one of the key issues for theorganizations that are performing in the global economy. The debt management is helpful indetermining the level of profit for any organization. In the current aspect to time, the basis offinance is the initial step in the functioning of an organization or business. The basic and thefundamental financial source are inclusive of equity and debt financing which is even calledthe capital structure of financing (De Jonghe, & Öztekin 2015). In accordance to equityfinancing, the common fund can be increased by issuing the Initial Public Offering (IPO) tothe common people and the issuance of the ordinary shares. On the other hand, debt isexplained as the agreement among two parties where the borrower has to assure to makepayments of certain amount of interest with the treaty to make payment for the principlevalue in the coming future (De Mooij, & Keen 2016). The process of debt financing isregarded as a key aspect of the financial strategy of the organization because of the fact thatdebt are of numerous kinds that includes the issuing of the bonds, debentures, trade creditsand loans etc. On the other hand, profit is explained as the financial advantage or the rewardsthat have been achieved when the revenue value is more than the costs of the businessoperations. As the profit is associated directly with the process of decision making of anorganization and therefore has an effect on the selection of the equity or debt financing(Alshatti, 2015). 1.1 Problem Statement Different kinds of organisations has the option of selecting in between the equityfinancing and debt financing for the activities of the business which is associated directly tothe growth and profit of the organization (Allegret et al., 2016). It can be explained that debtfinancing has the benefit over the tax savings or the tax intentions over the financing relatedto equity and debt financing is not a complex process with respect to the equity financing in
5PROFESSIONAL PROJECTthe process of debt management and the lender is eligible only to undertake repayment of theprinciple of the loan that has been agreed on and additionally the rate of interest. Therefore,most of the organizations have the intention of undertaking debt financing (Alessandri, &Nelson 2015). It is due to this reason that this thesis paper has looked to discuss about themanagement of debt variables that have an impact on the anticipated profits of the firm, theprocess of research planning that are going to be utilised in order to compare and compute thevariables that can be exploited in order to assess the various kinds of ratios, leverage and theamount that can be used in order to undertake a comparison of the outcome in the presentscenario (Bennett et al., 2015). This paper has therefore looked to determine the debtmanagement process and its impact on profit of Commonwealth Bank of Australia. 1.2 Research Aims and Objectives The objectives of the paper has been constructed in order to have an idea about theprocess that would be undertaken and the factors that would be taken into consideration inorder to have an idea about the result that would be obtained in this paper. The research aimsand objectives are as follows: Determine how profitability has an impact on the operations of a bank Ascertain how debt management improves the level of profit in the bank 1.3 Research Questions The researcher looks to frame the research questions in order to create a path inaccordance to which the research paper would move ahead and thereby would be able toanswer to the issues that are pertinent to this research paper. The research questions are asfollows: Q1. How does profitability have an impact on the activities of Commonwealth Bank?
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