Report on Techniques of Fundamental Analysis | ANZ Bank Australia

RUNNING HEAD: Investment analysis
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Project report

Investment analysis
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Executive summary:
This report has been prepared to learn the concept of fundamental analysis. In this
report, various techniques of fundamental analysis have been done to evaluate the
performance of the company as well as the industry. For this paper, banking industry of
Australia has been taken into consideration and ANZ bank Australia and Commonwealth
bank of Australia has been taken as the banking firms. Various tools of top down and bottom
up analysis has been performed over the banking industry and ANZ bank Australia and
Commonwealth bank of Australia to analyze the investment condition of the industry as well
as the firms.

Investment analysis
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Contents
Introduction.......................................................................................................................4
Company overview:..........................................................................................................4
Top down analysis............................................................................................................4
Banking industry of Australia.......................................................................................5
Future projections.........................................................................................................6
Inflation rate..................................................................................................................7
GDP..............................................................................................................................8
Fiscal policies...............................................................................................................9
Bottom up analysis...........................................................................................................9
Ratio analysis..............................................................................................................10
ANZ Bank Australia...............................................................................................10
Commonwealth bank Australia..............................................................................11
DU Pont analysis........................................................................................................12
ANZ Bank Australia...............................................................................................12
Commonwealth bank Australia..............................................................................13
Financial data analysis................................................................................................15
ANZ bank Australia................................................................................................15
Commonwealth bank Australia..............................................................................16
Summary and recommendation......................................................................................17
References.......................................................................................................................18

Investment analysis
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Introduction:
Fundamental analysis is a study to evaluate the security’s intrinsic value by
concerning various aspect of the company such as PE ratio, cash flow etc. various
economical, qualitative, financial and quantitative factors are analyzed by the company to
manage the intrinsic value of the company. The study of fundamental analysis is done over
the factors which make an impact over the stock price of the company such as entire macro
economical factors, industry conditions, micro economical factors etc. it determines the
performance and health of an underlying firm through looking over the economical indicators
and key numbers. For analyzing the fundamental analysis, various methods are available such
as top down analysis and bottom up analysis (Sarsby, et al, 2014).
For this paper, banking industry of Australia has been taken into consideration and
ANZ bank Australia and Commonwealth bank of Australia has been taken as the banking
firms. Various tools of top down and bottom up analysis has been performed over the
banking industry and ANZ bank Australia and Commonwealth bank of Australia to analyze
the investment condition of the industry as well as the firms.
Company overview:
For this paper, ANZ bank Australia and Commonwealth bank of Australia has been
taken into consideration. Both of these banks are the top banks in the Australian market and
offer various services to the clients such as commercial banks. Both of these banks have
registered into the Australian stock market to manage the stocks and trade of stocks.
Top down analysis:
Top down analysis is also a branch of fundamental analysis. In the study of Top down
analysis, fundamentals of a company is analyzed though various prospective such as industry
changes, economical condition, political changes, GDP, performance of the economy,
inflation rate, fiscal policies etc. such kind of analysis seeks out companies and industries to
represent the presented opportunities in the market and in concern of the business cycle
(yasin, 2014). It has been observed that every industry has own way to react towards the
numerous phases which are existing in the economic cycle. Top down analysis mainly shows
its concern about the macro factors of the company and the industry.