One of the major multinational banks in the world is Commonwealth Bank Limited with a net income of $26,000,000,000,000 as on 2017 with more than 51,000 employees across more than 11 countries. It was founded in 1911. Matt Comyn is its CEO and Catherine Livinngstone is its Chairman. It’s headquarters is in Darling Harbour, Sydney, Australia.
In Brisbane, there is a public listed bank called the Bank of Queensland. With a new profit of 352,000,000 as of 2017, Queensland has a spread network of more than 252 branches. It was founded in 1863. Jon Sutton is it’s CEO. It has employee base of 1,903 as of 2014. It’s headquarters is in BOQ village, 100 Skyring Terrace, Newstead, Queensland, Australia. It has 252 branches.
Each of the bank’s financial statement and debt and equity components shall be discussed in this assignment with the goal to properly examine the reports. Each of the organization’s cash flow statement shall be put through comparison and will be examined along with the comprehensive statements. Finally, both the organization’s amount and the rate will be looking into, in terms of its corporate income tax and the same will be compared.
Equity, which has been contributed – For buying share the amount of money paid by the shareholders. $310,000,000 has lowered in amount, which may be the outcome of brought back of shares (Hasan, Hossain & Habib, 2015).
Reserve Cash – It is the amount of money kept aside for later use. It is not used in the current activities of the business. For future projects, the sum is utilized. Due to reallocation, there is a possible decline of $22,900,000. With more cash reserves the organization has more places to utilize those cash resources.
Earnings which are retained – After all the due expenses are made at the conclusion of the financial year the sum of money which is holding back or retained is Retained Earning. There has been growth in this by $21,900,000 and the reason for this is due to the profit made by the organization. When earnings are retained, they are useful for future direct operational activities of the business (Haque & Aulia, 2018).
Bank of Queensland
Equity, which has been contributed – Growth in the amount by $304,000,000 because of the issue of fresh shares. With more contributed equity the organization can venture into more business activities (Fleurbaey et al., 2014).
Reserve Cash - There is a reduction of $57,000,000 in the yearly report at the conclusion of the financial year because of the funds, which have been reallocated. With more cash reserves the organization has more places to utilize those cash resources.
Losses that are accumulated – Losses that amounted to $270,000,000 have been reported because of unanticipated situations. These accumulated losses must be minimized to benefit the organization in the long run.
The interest which is not controlled – Growth of $1112,000,000 has been stated by the report because shares were being sold in the market by the people who had control of the decision making process.
List every item from the financial statement of your selected organization in the cash flow statement and explain your understanding of every item. Examine every change in every item; from the cash flow statement for your organization from the previous years justify the reasons for the alteration.
The core three items of both the chosen companies of their cash flow statement are as follows: Net cash from the operations activities, which the business engages in. Net cash generated financing activities, which engrosses the organization in performing financing tasks. Finally, Net cash from investing activates, where the enterprise invests in appropriate avenues (Dumont & Schmit 2014).
Activities of operation – Cost of the all the operations are incorporated in this. A growth of $226,000,000 is shown in the report and $54,800,000 of inflow of cash in the Common wealth and bank of Queensland in that order. The reason for this might be the inward flow of cash into the organization. With more inflow of cash the organization has more resources to spend elsewhere (Zaman et al., 2017).
Activities of investing - A growth of $1349,000,000 is shown in the report and a reduction of $13,900,000 in the activates of investing of the Commonwealth and Bank of Queensland in that order. When engaged in more investing activates the organization increases its prospect of investing in more investment sources (Mulford & Nicholson, 2014).
Arya, A., & Nagar, N. (2016). Stewardship Value of Income Statement Classifications: An Empirical Examination. Journal of Accounting, Auditing & Finance, 0148558X18793067.
Badenhorst, W. M., & Ferreira, P. H. (2016). The Financial Crisis and the Value‐relevance of Recognised Deferred Tax Assets. Australian Accounting Review, 26(3), 291-300.
Dumont, G., & Schmit, M. (2014). Tier-1 MFIs' Financial Performance: Cash-Flow Statement Analysis Version 2.0 (No. 13/054). CEB Working Paper.
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