Financial Analysis Report: Iress Limited vs. S&P/ASX 200 Index

This report presents a corporate financial analysis of Iress Limited, an Australian-based software company, in comparison to the S&P/ASX 200 index. The analysis includes an overview of both Iress Limited and the ASX200, along with the calculation of continuously compounded daily returns. The report examines key financial metrics such as mean, median, mode, standard deviation, and correlation coefficients. Statistical analyses, including covariance and regression models, are employed to assess the relationship between Iress Limited's stock performance and the ASX200. The findings indicate a positive correlation and higher returns for Iress Limited compared to the index, suggesting its independence and potential for investment. The report concludes with a discussion of the regression results and their implications for understanding the stock's behavior.

Running Head: CORPORATE FINANCIAL ANALYSIS 1
CORPORATE FINANCIAL ANALYSIS

Running Head: CORPORATE FINANCIAL ANALYSIS
Contents
Part A....................................................................................................................................................3
A.2.....................................................................................................................................................3
S&P and ASX200..............................................................................................................................3
Iress Limited......................................................................................................................................3
A.4.....................................................................................................................................................4
A.5.....................................................................................................................................................4
Part B.....................................................................................................................................................6
B.1.....................................................................................................................................................6
B.2.....................................................................................................................................................7
B.3.....................................................................................................................................................7
B.4.....................................................................................................................................................7
B.5.....................................................................................................................................................7
B.6.....................................................................................................................................................9
B.7...................................................................................................................................................10
B.8...................................................................................................................................................10
Part 3...................................................................................................................................................11
C.1...................................................................................................................................................11
C.2...................................................................................................................................................12
C.3...................................................................................................................................................12
References...........................................................................................................................................14

Running Head: CORPORATE FINANCIAL ANALYSIS
Part A
A.2
S&P and ASX200
The S&P/ASX 200 index is a market-capitalization weighted and also known as float
adjusted armlet index of the stocks listed on the Australian Stock Exchange. It is considered
as the benchmark for Australian Equity performance. The pillars of S&P ASX/200 are mainly
because of the companies listed on the Australian Stock Exchange. Started in the year 2000
with the value of 3133.3 is equivalent to the All Ordinaries. There are certain rules which are
to be followed by the companies for being listed on ASX (S&P ASX 200, 2019).
Iress Limited
Iress Limited is an Australian based software company which is involved in the overall
development of software systems and services for the management of the finances and the
wealth management. Founded in the year 1993, the company has a set up a great name in the
market and more than 9000 companies are making use of software designed by Iress Limited
and around 500000 users are operating it at the global level. The company is also listed on
Australian Stock Exchange and is a member of S&P and ASX200. In case of the number of
employees, the company has a team of 1950 in the year 2019 (Iress Limited, 2018).

Running Head: CORPORATE FINANCIAL ANALYSIS
A.4
S&P/ASX 200 Iress
Mean 6179.69 Mean 11.61
Standard Error 4.47 Standard Error 0.43
Median 6180.70 Median 11.43
Mode NA Mode NA
Standard Deviation 341.04 Standard Deviation 1.40
Sample Variance 121154.67 Sample Variance 2.05
Kurtosis -0.78 Kurtosis -0.95
Skewness 0.29 Skewness 0.14
Range 1199.60 Range 5.11
Minimum 5646.40 Minimum 9.03
Maximum 6846.00 Maximum 14.14
Sum 155158.60 Sum 290.20
Count 24.00 Count 24.00
A.5
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
0.00
1000.00
2000.00
3000.00
4000.00
5000.00
6000.00
7000.00
8000.00
Share Price
S&P/ASX 200

Running Head: CORPORATE FINANCIAL ANALYSIS
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
-0.0800
-0.0600
-0.0400
-0.0200
0.0000
0.0200
0.0400
0.0600
Average returns
S&P/ASX 200
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
0.0000
5.0000
10.0000
15.0000
Share Price
Iress Limited
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
-0.2000
-0.1500
-0.1000
-0.0500
0.0000
0.0500
0.1000
0.1500
0.2000
Average returns
Iress Limited

Running Head: CORPORATE FINANCIAL ANALYSIS
Part B
B.1
S&P 500 ASX 200
Classes Frequency Relative Frequency Cumulative Frequency Classes Frequency Relative Frequency Cumulative Frequency
-0.1694--0.1417 1 0.005 1 -0.1266--0.1066 2 0.009 2
-0.1140--0.0863 5 0.023 6 -0.1066--0.0866 1 0.005 3
-0.0863--0.0586 16 0.074 22 -0.0866--0.0666 7 0.033 10
-0.0586--0.0309 13 0.060 35 -0.0666--0.0466 14 0.065 24
-0.0309--0.0032 39 0.181 74 -0.0466--0.0266 19 0.088 43
-0.0032-0.0245 81 0.377 155 -0.0266--0.0066 29 0.135 72
0.024-0.0522 40 0.186 195 -0.0066-0.0134 46 0.214 118
0.0522-0.0799 13 0.060 208 0.0134-0.0334 53 0.247 171
0.0799-0.1076 6 0.028 214 0.0334-0.0534 34 0.158 205
0.1076-0.1353 1 0.005 215 0.0534-0.0734 10 0.047 215
Grand Total 215 1.00 Grand Total 215 1
Iress Limited
Classes Frequenc
y
Relative
Frequency
Cumulative
Frequency
-0.017499152506343-
0.032500847493657 66 0.005 0.005
0.032500847493657-
0.082500847493657 49 0.005 0.009
-0.0674991525063429--
0.0174991525063429 40 0.005 0.014
0.0825008474936571-
0.132500847493657 23 0.023 0.037
-0.117499152506343--
0.067499152506343 18 0.200 0.237
0.132500847493657-
0.182500847493657 8 0.391 0.628
-0.167499152506343--
0.117499152506343 5 0.247 0.874
0.182500847493657-
0.232500847493657 2 0.107 0.981
-0.217499152506343--
0.167499152506343 2 0.014 0.995
0.232500847493657-
0.282500847493657 1 0.005 1.000
Grand Total 214 1

Running Head: CORPORATE FINANCIAL ANALYSIS
B.2
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
-0.2000
-0.1500
-0.1000
-0.0500
0.0000
0.0500
0.1000
0.1500
0.2000
Average returns
S&P/ASX 200
Iress Limited
B.3
Mean- It is defined as the sum of all the data, divided by the particular number of sets.
Median- Median value is termed as the middle value. In case of calculation of odd number
values the location can be found out at (n+1)/2
First Quartile- the first quartile is termed as the 25% of the observations and the same can be
arrived at using the calculation of Ly = (n+1) * y / 100.
Mean 6206.34 Mean 11.61
Median 6180.70 Median 11.43
First Quartile 5976.30 First Quartile 10.58
Mode Mode
B.4
PARTICULARS Mean
Standard
deviation Mean
Standard
deviation
First Year 5999.179 205.511 10.699 0.960
Second Year 6470.009 294.011 12.765 0.955
B.5

Running Head: CORPORATE FINANCIAL ANALYSIS
S&P/ASX 200
Row Labels Count of S&P/ASX 200 Relative Frequency Cumulative Frequency
-0.0607803800250536--0.0607703800250536 1 0.043478261 0.043478261
-0.0426603800250536--0.0426503800250536 1 0.043478261 0.086956522
-0.0305903800250536--0.0305803800250536 1 0.043478261 0.130434783
-0.0279803800250536--0.0279703800250536 1 0.043478261 0.173913043
-0.0177103800250536--0.0177003800250536 1 0.043478261 0.217391304
-0.00452038002505364--0.00451038002505364 1 0.043478261 0.260869565
-0.00373038002505364--0.00372038002505364 1 0.043478261 0.304347826
-0.00367038002505363--0.00366038002505363 1 0.043478261 0.347826087
-0.00360038002505364--0.00359038002505364 1 0.043478261 0.391304348
0.00188961997494636-0.00189961997494636 1 0.043478261 0.434782609
0.00487961997494637-0.00488961997494637 1 0.043478261 0.47826087
0.00624961997494636-0.00625961997494636 1 0.043478261 0.52173913
0.0112796199749464-0.0112896199749464 1 0.043478261 0.565217391
0.0127296199749464-0.0127396199749464 1 0.043478261 0.608695652
0.0138096199749464-0.0138196199749464 1 0.043478261 0.652173913
0.0159396199749464-0.0159496199749464 1 0.043478261 0.695652174
0.0234196199749464-0.0234296199749464 1 0.043478261 0.739130435
0.0292796199749464-0.0292896199749464 1 0.043478261 0.782608696
0.0303896199749464-0.0303996199749464 1 0.043478261 0.826086957
0.0346796199749464-0.0346896199749464 1 0.043478261 0.869565217
0.0386596199749464-0.0386696199749464 1 0.043478261 0.913043478
0.0387696199749464-0.0387796199749464 1 0.043478261 0.956521739
0.0518796199749464-0.0518896199749464 1 0.043478261 1
Grand Total 23 1
Row Labels Count of Iress Limited Relative Frequency Cumulative Frequency
-0.136712298537981--0.136612298537981 1 0.043478261 0.043478261
-0.136512298537981--0.136412298537981 1 0.043478261 0.086956522
-0.107212298537981--0.107112298537981 1 0.043478261 0.130434783
-0.0736122985379812--0.0735122985379812 1 0.043478261 0.173913043
-0.0612122985379812--0.0611122985379812 1 0.043478261 0.217391304
-0.0536122985379812--0.0535122985379812 1 0.043478261 0.260869565
-0.0503122985379812--0.0502122985379812 1 0.043478261 0.304347826
-0.0399122985379812--0.0398122985379812 1 0.043478261 0.347826087
-0.0203122985379812--0.0202122985379812 1 0.043478261 0.391304348
-0.0115122985379812--0.0114122985379812 1 0.043478261 0.434782609
0.00498770146201885-0.00508770146201885 1 0.043478261 0.47826087
0.0211877014620188-0.0212877014620188 1 0.043478261 0.52173913
0.0234877014620188-0.0235877014620188 1 0.043478261 0.565217391
0.0379877014620189-0.0380877014620189 1 0.043478261 0.608695652
0.0459877014620188-0.0460877014620188 1 0.043478261 0.652173913
0.0565877014620188-0.0566877014620188 1 0.043478261 0.695652174
0.0642877014620188-0.0643877014620188 1 0.043478261 0.739130435
0.0963877014620188-0.0964877014620188 1 0.043478261 0.782608696
0.103187701462019-0.103287701462019 1 0.043478261 0.826086957
0.114787701462019-0.114887701462019 1 0.043478261 0.869565217
0.116387701462019-0.116487701462019 1 0.043478261 0.913043478
0.162587701462019-0.162687701462019 1 0.043478261 0.956521739
0.163187701462019-0.163287701462019 1 0.043478261 1
Grand Total 23 1

Running Head: CORPORATE FINANCIAL ANALYSIS
B.6
ASX 200 Iress Limited
Covariance 0.0012
Iress Limited ASX 200
Correlation coefficient 0.5126
Square root 8.713874821
The covariance of S&P/ASX200 is 0.0012 with respect to Iress limited. The coefficient of
variation is the ratio of the standard deviation to the mean of the particular data. The total risk
is higher in case of Iress Limited and this can be indicated with the help of correlation
coefficient being 0.5126 of Iress Limited with respect to ASX200.

Running Head: CORPORATE FINANCIAL ANALYSIS
B.7
The summary statistics with Kurtosis is defined below.
S&P/ASX 200 Iress
Mean 6179.69 Mean 11.61
Standard Error 4.47 Standard Error 0.43
Median 6180.70 Median 11.43
Mode NA Mode NA
Standard Deviation 341.04 Standard Deviation 1.40
Sample Variance 121154.67 Sample Variance 2.05
Kurtosis -0.78 Kurtosis -0.95
B.8
In comparison to S&P/ASX200, the returns posed by Iress Limited are higher than S&P/ASX
200 and this implies that the stock is independent in its working and is not driven by the
factors associated by S&P/ASX200. This also reveals the indirect relationship between the
average returns of stock of Iress Limited and S&P/ASX200. The returns declared by Iress
Limited are higher than S&P/ASX 200 index.
11/1/2017
1/1/2018
3/1/2018
5/1/2018
7/1/2018
9/1/2018
11/1/2018
1/1/2019
3/1/2019
5/1/2019
7/1/2019
9/1/2019
11/1/2019
-0.2000
-0.1500
-0.1000
-0.0500
0.0000
0.0500
0.1000
0.1500
0.2000
S&P/ASX 200
Iress Limited

Running Head: CORPORATE FINANCIAL ANALYSIS
Part 3
C.1
At zero level
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.087521646
R Square 0.007660038
Adjusted R Square -0.039594245
Standard Error 0.090349681
Observations 23
ANOVA
df SS MS F Significance F
Regression 1 0.001323253 0.00132325 0.162102519 0.691297262
Residual 21 0.171424362 0.00816306
Total 22 0.172747615
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 0.1% Upper 0.1%
Intercept 0.013111991 0.01896009 0.69155743 0.496790389 -0.026317674 0.052541656 0.013087944 0.013136038
X Variable 1 -0.217131978 0.539298119 -0.4026196 0.691297262 -1.338663813 0.904399857 -0.217815979 -0.216447976
At the zero level, the coefficients of the x variable tend to be 0.2164 whereas in case of the
5% level, the same is at 0.9043 with the upper limit.
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.087521646
R Square 0.007660038
Adjusted R Square -0.039594245
Standard Error 0.090349681
Observations 23
ANOVA
df SS MS F Significance F
Regression 1 0.001323253 0.00132325 0.162102519 0.691297262
Residual 21 0.171424362 0.00816306
Total 22 0.172747615
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.013111991 0.01896009 0.69155743 0.496790389 -0.026317674 0.052541656 -0.026317674 0.052541656
X Variable 1 -0.217131978 0.539298119 -0.4026196 0.691297262 -1.338663813 0.904399857 -1.338663813 0.904399857

Running Head: CORPORATE FINANCIAL ANALYSIS
C.2
SUMMARY OUTPUT
Regression Statistics
Multiple R 0.087521646
R Square 0.007660038
Adjusted R Square -0.039594245
Standard Error 0.090349681
Observations 23
ANOVA
df SS MS F Significance F
Regression 1 0.001323253 0.00132325 0.162102519 0.691297262
Residual 21 0.171424362 0.00816306
Total 22 0.172747615
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 95.0% Upper 95.0%
Intercept 0.013111991 0.01896009 0.69155743 0.496790389 -0.026317674 0.052541656 -0.026317674 0.052541656
X Variable 1 -0.217131978 0.539298119 -0.4026196 0.691297262 -1.338663813 0.904399857 -1.338663813 0.904399857
Regression level at 10% confidence level
Regression Statistics
Multiple R 0.087521646
R Square 0.007660038
Adjusted R Square -0.039594245
Standard Error 0.090349681
Observations 23
ANOVA
df SS MS F Significance F
Regression 1 0.001323253 0.00132325 0.162102519 0.691297262
Residual 21 0.171424362 0.00816306
Total 22 0.172747615
Coefficients Standard Error t Stat P-value Lower 95% Upper 95% Lower 90.0% Upper 90.0%
Intercept 0.013111991 0.01896009 0.69155743 0.496790389 -0.026317674 0.052541656 -0.019513449 0.045737431
X Variable 1 -0.217131978 0.539298119 -0.4026196 0.691297262 -1.338663813 0.904399857 -1.145125389 0.710861433
In comparison to the confidence level at 5% and 10%, there is more variation in calculation
of the second model at 10%. The p value of the model decides whether the null hypothesis
shall be accepted or rejected. Further in case of 5% and in case of 10%, the variation is in the
upper limit.
C.3
After running the simple regression with the help of the returns of the stock and S&P/ASX
200 index returns being independent variable, the confidence level is set at 5%. The net
output from regression model C for the above hypothesis testing is defined below,
ANOVA
df SS MS F
Significance
F
Regression 1 0.001323253 0.00132325 0.162102519 0.691297262
Residual 21 0.171424362 0.00816306
Total 22 0.172747615