Corporate Finance Australia Analysis 2022

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Author’s Note:

CORPORATE FINANCE1
Table of Contents
Part A...............................................................................................................................................2
Overview..........................................................................................................................................2
Evaluation of Company Objectives.................................................................................................2
Wealth Maximization..................................................................................................................2
Profit Maximisation.....................................................................................................................3
Environmental Issues...................................................................................................................4
Ethical Suppliers..........................................................................................................................5
Employees....................................................................................................................................6
Gender Equality...........................................................................................................................6
Social Responsibility...................................................................................................................7
Key Objectives of Company........................................................................................................8
Profit vs. Wealth Maximization.......................................................................................................8
Part B...............................................................................................................................................9
References......................................................................................................................................11

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Part A
Overview
The companies that were selected for the purpose of financial analysis is the National
Australia Bank and BHP Ltd for the period 2018. The analysis will be done based on the
objectives followed by the company in the view of profit as well as wealth maximisation
approach. While Wealth maximisation is a long-term approach and profit maximisation approach
may be considered as short-term goal for the company it is equally important to balance both for
a sustainable growth in the company. The analysis of the company objectives in terms of
environmental issues addressed, supplier’s policy followed, employee policy, gender diversity
and social responsibility policy followed by company was taken into account (Ioannou &
Serafeim, 2017). The National Bank of Australia is one of the fourth largest bank that is
operating in the banking and financial services industry in Australia. BHP Ltd is the trading
entity of BHP Group Ltd operating as an Anglo-Australian Multinational mining, metal and
petroleum company that is headquartered in Melbourne Australia.
Evaluation of Company Objectives
Wealth Maximization
Wealth maximisation can be well inferred as a modern approach of profit maximisation
wherein the aim of the company is to maximize the value of the equity shareholders thereby
considering the increase in the net worth position and the overall value of the company. A rise in

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the share price of the company from the investment done would be helping the equity
shareholder’s in maximizing the overall net worth (Cho et al., 2015).
National Australia Bank: The reported value for equity by the company in the year 2018 was
around $52,701mn and for the year 2017 the same was around $51,306 million representing an
increase of about 2.72% for the company (Annual Report, 2018).
BHP Ltd: The equity value for the BHP Ltd was around $55,592 million in the year 2018
which was slightly lower than the last year equity value standing at $57,258 representing an
decrease of -2.91%. The equity value or the net worth position of the company has declined
primarily due to the decline in the reserves and retained earnings of the company for the period
2018.
Profit Maximisation
Profit maximisation plays an important perspective when considered from the view point
of company’s operation. Analysis of the profitability for the company can be well assessed with
the help of the reported net income of the company for the period 2018 and 2017.
National Australia Bank: The reported profitability for the company for the period 2018 was
around $5,557 and for the period 2017 it was around $5,288 representing an all-around increase
of about 5.09% for the company in the trend period analysed (Annual Report, 2018). The
increase in the consistent profit can be well referred to the increase in the interest income and the
increased business activity that is undertaken by the company for the trend period analysed.
Profitability of the company can be well viewed with the help of increasing profitability of the
company that is in the form of higher interest income and increasing customer base for the
company that has ultimately lead the company report a higher profitability. On the other hand, it