Analysis of Financial Performance: AMP Limited and Suncorp Group

This report presents a detailed analysis of the financial performance of two major Australian companies, AMP Limited and Suncorp Group. It begins with an overview of each company's mission, objectives, strategic priorities, and operational strategies. The core of the report involves a trend analysis of key financial metrics over several years, employing various management accounting techniques and statistical tools to evaluate their performance. It includes the use of financial ratios, graphical representations, and statistical measures like central tendency and correlation coefficients to compare and contrast the financial health of both companies. The report also incorporates time series analysis and least squares regression to forecast and interpret financial trends. The analysis provides a comprehensive understanding of each company's financial position and strategic decisions, concluding with a comparison of their overall performance and recommendations.

MANAGEMENT
ACCOUNTING AND
STATISTICS

Table of Contents
INTRODUCTION...........................................................................................................................1
PART A...........................................................................................................................................1
1.companies’ mission, objectives, strategic priorities, and operations...................................1
2. Trend Analysis of AMP Limited and Suncorp group limited............................................1
3. Analysation of financial performance of companies..........................................................9
4. Comparison of financial performance..............................................................................11
PART B .........................................................................................................................................12
1. Graphically present and discuss the variables from the financial statements of AMP Ltd and
Suncorp group Limited:........................................................................................................12
2. Measure of central tendency............................................................................................18
3 Correlation coefficients.....................................................................................................20
4. Estimate and Interpret the least square regression equation of net profits on sales.........22
5. Time series........................................................................................................................22
CONCLUSION..............................................................................................................................23
REFERENCES .............................................................................................................................24

INTRODUCTION
Management accounting is the main tool which is used by the company in order to make
their business operations in a sustainable manner (Weißenberger and Angelkort, 2011). Under
this project report, two companies have been selected from the top 10 Australian companies,
AMP Limited and Suncorp group Ltd is selected which are from Finance sector and they both
have great position in Australia. By applying various management accounting techniques,
companies are able to frame their business decisions in a most effective manner. Under this
report, various statistical tools are used for analysing their financial statements. Various graphs
are made under this so that the business performance can be analysed in an effective manner.
PART A
1.companies’ mission, objectives, strategic priorities, and operations
Amp Ltd.
Operations:
In Australia and New Zealand's this company is the specialist in the management of the wealth
of the company. From last 168 years they are dedicated to ourselves in helping our customers to
achieve their financial goals with quality product and expert advice.
The main purpose of operations of the company is the betterment of the future of the people
tomorrow by offering better solutions and financial advice to explore ,plan, track and reliase their
goals so they can make their future better.
They have:
1. Established as mutual life insurance company in 1849
2. More than 46000 Amp bank home loans,
3. more than 3500 financial advisers in Australia and New Zealand
4. more than 5400 employees
5. more than 4 million customers
Strategy:
Amp Ltd has clear strategy of long term growth by diversifying their investments into different
sectors and give more focus on the core business in which they have the strong positions in the
growing market. They are transform their Australian business to provide better help to their
customers to have better tomorrow and continuously reduces their costs to increase their
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profitability in very less margin world and expanding their operations internationally through
selected partnerships in china and japan.
They are also attracting new investments into the real assets in Australia and globally.
Mission:
Amp Ltd. Is known in the Australia and New zealand for superannuation, investments and advice
but now the mission is to grow in retail banking in Australia and New Zealand and
internationally with the help of the strong partnerships with China and Japan and the investments
made around the globe.
So the mission is to grow their business all over the world and expolore the area of their work
and providing the banking services too.
Objectives:
1. Superannuation, retirement and financial advice: The Amp Ltd is indulged in the
providing of the financial advices regarding their superannuation and retirements. It
provides a greater choices investments to their customers.
2. Banking: To provide banking services in Australia and New Zealand and providing
home loans to the customers and financial advices regarding to that.
3. Investments: It aims to provide wide base of opportunities to the investors for investing in
the real estate and the infrastructure sector (Nikolaev, 2010). Aims to grow and extend
the partnership with china and in Japan derive value from Mitsubishi trust and banking
partnerships.
4. Insurance: Stabilise earnings and release capital through reinsurance and to sustain there
business efficiencies. It also aims to promote new offers of insurance.
Suncorp Ltd.
Strategic priorities:
1. Elevate the customer: That the company is using insights to understand and meet
customers needs. They are going to focus on providing valuable customer experience
which is very grateful.
2. Create the market place: It provides a connected network of the brands, partners,
solutions and channels for the purpose of meeting the customers financial well-being
needs.
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3. Maintain momentum and grow: That they are engage in building and protecting the
reputation of excellence in financial services in Australia and New Zealand. This would
be achieved through targeted focus on revenue growth opportunities, operational
excellence etc.
4. Inspire our people: In achieving the any strategy requires a diverse and highly engaged
workforce. This would be achieved through focus on improving core work experience.
Operations:
Suncorp Group limited is providing of financial and solutions, helping customers for taking good
choices and taking the proper action to improve their financial well-being.
From since 1902, they are creating the values for the stakeholders while being responsible for the
business, today they are top 20 ASX-listed company having $97 billion in assets.
They are employing approx. 13400 people and providing services to the nine million customers
across the Australia and new Zealand.
There products and services are helping to the customers to meet their financial needs. It
provides strong portfolio of banking and wealth and insurance solutions.
Objectives:
That the suncorp group provides the services related to the banking in Australia and New
Zealand which also provides the financial advisory to the retired peoples and helps them
regarding investing in right direction which gives some return to them.
The main objective of this company is to bring together the strong portfolio of banking & wealth
and insurance solutions across all over the country.
Mission:
Suncorp group Ltd has mission that they are providing easier, enjoyable and more accessible
investment advises to their customers.
There focus is also on health well being and prevention (Larcker and Rusticus, 2010). They are
also got in partnership with Reach out to support them in their mission to help the young people
for staying happy and well through improving their mental health.
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2. Trend Analysis of AMP Limited and Suncorp group limited.
In any business it is very necessary that proper analysis shall be carried out so that all the
issues can be determined and then steps can be taken to eliminate them (Kaplan, 2011). Trend
analysis is one of such method in which the performance of past years is evaluated by using
various tools and on on basis of them predictions can be made in respect of coming period. For
this ratios are to be calculated for past few years which in given case are taken to be 10 years.
For AMP Limited
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Consolidated
Income statement
Net premium, fee
and other revenue 2869 2877 2665 2824 4219 4798 5136 5343 5539 6204
Investment gains
(losses) 8128
-
13843 8250 4840 1464 12084 14963 12244 8483 8567
Profit (loss) before
income tax from
continuing
operations 1237 -1094 1228 881 673 1384 1498 1814 1993 358
Income tax (expense)
credit -445 1668 -505 -126 3 -697 -782 -843 -280 -166
Profit from
discontinued
operations held for
sale after income tax 193 6 -44 -87 -741 -536
Non-controlling
interests 16 20 12 17
Profit after tax
attributable to
shareholders of
AMP Limited 985 580 739 775 688 704 672 884 972 -344

Consolidated
Statement of
financial position 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Cash and cash
equivalents 2141 2056 2409 3325 4652 4207 2938 3581 3955 3476
Investment assets 99150 80641 84171 85120 96972 106263 121781 126292
12807
4
12999
5
Intangibles 1005 939 946 919 4347 4175 4136 4042 3983 3199
Assets of disposal
groups 747 187 42 100
Other assets 2266 3114 2304 2241 4319 3919 4327 3840 3696 3390
Total assets 105309 86750 89830 91605
11029
0 118751 133224 134855
13970
8
14006
0
Borrowings and
subordinated debt 11653 12376 12350 11136 12359 12493 16243 16502 17452 17218
Life insurance
contract liabilities 20635 19250 18380 17762 24399 25055 24934 24403 23871 24225
Investment
contract liabilities 52357 41510 47239 48579 52940 58385 66049 66980 69848 71579
Liabilities of
disposal groups 672 74 8 69
Other liabilities 17978 11497 9227 11130 13695 15213 17790 18516 19642 19497
Total liabilities 103295 84633 87196 88607
10339
3 111220 125024 126470
13081
3
13251
9
Net assets 2014 2117 2634 2998 6897 7531 8200 8385 8895 7541
Contributed equity 3827 4481 4814 5051 9080 9339 9602 9508 9566 9619
Reserves -2446 -2598 -2563 -2565 -2534 -2156 -1973 -1888 -1866 -1972
Retained earnings 546 154 320 452 283 251 461 566 819 -185
Total equity
attributable to
1927 2037 2571 2938 6829 7434 8090 8186 8519 7462
3

shareholders of
AMP Limited
Non-controlling
interests 87 80 63 60 68 97 110 199 376 79
Total equity 2014 2117 2634 2998 6897 7531 8200 8385 8895 7541
Profitability Ratios 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Returns on Assets 0.94% 0.67% 0.82% 0.85% 0.62% 0.59% 0.50% 0.66% 0.70% -0.25%
Return on
investment 0.99% 0.72% 0.88% 0.91% 0.71% 0.66% 0.55% 0.70% 0.76% -0.26%
Return on equity 51.12% 28.47%
28.74
% 26.38%
10.07
%% 9.47% 8.31%
10.80
%
11.41
% -4.61%
Gross profit margin 16.63% 9.11%
20.00
% 19.62%
18.82
%
20.30
%
24.53
%
28.24
%
33.36
%
37.41
%
Net profit margin 34.33% 20.16%
27.73
% 27.44%
16.31
%
14.67
%
13.08
%
16.55
%
17.55
% -5.54%
1 2 3 4 5 6 7 8 9 10
0
0
0
0
0
0.01
0.01
0.01
0.01
Returns on Assets
Linear (Returns on Assets)
4

1 2 3 4 5 6 7 8 9 10
0
0
0
0
0
0.01
0.01
0.01
0.01
Return on investment
Linear (Return on investment)
5

1 2 3 4 5 6 7 8 9 10
-0.1
0
0.1
0.2
0.3
0.4
0.5
0.6
51.12%
28.47%28.74%
26.38%
9.98%9.47%8.31%
10.80%11.41%
-4.61%
Return on equity
Linear (Return on equity)
1 2 3 4 5 6 7 8 9 10
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Gross profit margin
Linear (Gross profit margin )
6

1 2 3 4 5 6 7 8 9 10
-0.1
-0.05
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
Net profit margin
Linear (Net profit margin)
For Suncorp group Limited:
particulars 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
Sales 7591 9411 10585 15682 19033 16061 16186 16370 16722 15487
Net profit 1064 561 353 966 477 614 621 905 1105 1130
operating
expenses 2025 3384 3386 2765 2654 2603 2732 2757 2427 2334
Gross profit 5566 6027 7199 12917 16379 13458 13454 13613 14295 13153
Total assets 84656 94169 97463 95339 95488 96062 95905 94429 95651 95748
Total
investments 20920 19136 20330 21091 24014 24881 26183 26915 26130 23384
Equity 12391 12366 13229 13953 14018 14127 13983 13799 13518 13570
Total liabilities 72265 81803 84234 81386 81470 81935 81922 80630 82133 82178
Profitability
Ratios 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
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