Financial Analysis of Suncorp Group

SUNCORP GROUP
FIN600 TX YYYY
NAME: STUDENT ID:

Student name – ID FIN600 TX YYYY
Assignment – Suncorp Group
Executive Summary
This report is prepared to provide a detailed financial analysis and estimation of
profitability, liquidity, efficiency, solvency and financial stability of Suncorp Group for the
year 2017 and 2018. The methods used for carrying out the financial analysis include
horizontal analysis and vertical analysis of the financial statements along with the ratio
analysis. Every calculation can be identified in the appendices. The results drawn from the
data after analysis show that there are some ratios which stands below the industry
averages like working capital ratio/current ratio and return on equity. The low net profit
margin of the company is also an area of concern. The report identifies a disappointing
future, if remedial actions are not taken by the management of the company. The company
is recommended to go for merger and acquisition in order to improve the net profit figure.
Apart from this, the company should also try to cut the overhead cost such as selling and
distribution expenses.
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Student name – ID FIN600 TX YYYY
Assignment – Suncorp Group
Contents
Page Number
1 Introduction 3
1.1 Background and Business
2 Company Analysis
2.1 Analysis of financial statements of the business 3-
7
Current Financial performance, economic outlook
3 Ratio Analysis
7-9
3.1 Profitability ratios 7
3.2 Efficiency ratios
7-8
3.3 Liquidity ratios 8
3.4 Gearing ratios 8-
9
4 Recommendations and overall assessment
9
5 References/Bibliography
10
Appendices – attached Excel Spreadsheet
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Student name – ID FIN600 TX YYYY
Assignment – Suncorp Group
1 Introduction
1.1 Background and Business
Suncorp Group is located in Queensland. It is established to provide financial services like
retail banking, business banking, superannuation, investment products, general insurance
and life insurance. The company provides these services in Australia and New Zealand.
Presently the group is running under the stewardship of Michael Cameron (Chief Executive
Officer) (Suncorpgroup, 2019). Personal insurance, commercial insurance, Vero New
Zealand and Suncorp bank are the main products in which Suncorp group actually deals in.
Currently, a customer base of nine million is being enjoyed by the group along with
thirteen thousand three hundred people working across Australia.
2 Company Analysis
2.1 Financial statements, Current Financial performance,
economic outlook
In order to evaluate the performance of the business while taking into consideration the
industry and economic environment, a proper financial analysis is performed. This analysis
helps the company as well as its stakeholders in understanding and taking a better
decision for achieving the individual goals and the corporate goals. These analysis are
done to make an idea about the firm’s ability to provide returns on the amount of capital
invested, estimate the total profit coming out in the form of operating activities and check
the amount of available cash to meet the short term obligations and long term obligations.
There are generally three ways for doing the financial analysis which are as follows:

Horizontal Analysis: The financial users and other interested parties of the financial
users carry out the horizontal analysis of all the financial statements, in order to do
comparative study on every item for two consecutive years.

Vertical Analysis: The relationship of every item present in the balance sheet and
income statement is established with the base amount, in order to know the areas,
where company has utilized its available resources. All these are done by doing a
vertical analysis.

Ratio Analysis: In order to evaluate the financial performance of the business, the
financial ratios are calculated. For example, “fixed asset turnover” this ratio actually
helps the users of financial statements know how well the assets are being utilized
by the company (McGowan, 2014). There are majorly three kinds of ratios which
include:
i. Profitability ratios- With the help of these ratios, the capability of the company to
earn profit is measured, which is actually the primary goal of any organisation
except those working as Non-profit organisations.
ii. Efficiency ratios- These are the ratios calculated to know the efficiency of the
company in utilizing its fixed assets and current assets.
iii. Gearing ratios- These ratios are usually calculated by the creditors in order to
check the organisation’s ability to pay back the loan amount.
iv. Liquidity ratios- These ratios are calculated to know about the company’s ability to
pay back its debt on the due date (Samonas, 2015).
Horizontal Analysis of Financial Statements of SunCorp Group
Horizontal analysis of Balance Sheet (000’ AUD)
Increase or (Decrease)
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