Queensland Bank and Bendigo Adelaide Bank
Queensland Bank and Bendigo Adelaide Bank
Assessment of Red Flags
The financial data for the banks consists of common ratios which measure performance. The Return on equity = Net income / shareholder's equity. This ratio measures the company’s profitability, and it may be compared it with the ROE of other companies. The PBIT represents the organization’s earnings and expenses before taxes. The Current ratio = Current asset / Current liability, which measures the company’s ability to pay its bills. Creditors often use this formula to decide if clients are financially strong enough to borrow. A high ratio is desirable for lenders but it also suggests the bank is not putting all of its assets to work. The Quick Ratio measures liquidity, or how quickly the bank can liquidate its assets to cash, and how much. Queensland Bank showed no red flags of impending financial difficulties. The financial ratios were stable and consistent. The profit before tax fluctuated a bit, but not much in 2010 and came back in 2011. Bendigo Bank showed higher profitability or performance than Queensland, although Bendigo had more fluctuation. Bendigo Adelaide Bank showed no red flags, also pretty stable. The bank’s PBITs look great. Bendigo’s ROA of BAB increased in 2011 from 17% in 2009. Queensland dropped in 2011 from 49%, 2010.
Qualitative and nonfinancial information
Qualitative and non-financial information play a very important role in supporting the companies’ reports in the financial statements. The additional insight makes the annual report more acceptable to investors. The information in the Qualitative and nonfinancial information section adds depth. It also reflects whether or not the executives know their business and understand its operations and performance data. This section can address many things such as the sales pipeline, its products, its markets, potential threats, and opportunities. It should reflect the company’s business strategy and mission.
Assessment of Red Flags
The financial data for the banks consists of common ratios which measure performance. The Return on equity = Net income / shareholder's equity. This ratio measures the company’s profitability, and it may be compared it with the ROE of other companies. The PBIT represents the organization’s earnings and expenses before taxes. The Current ratio = Current asset / Current liability, which measures the company’s ability to pay its bills. Creditors often use this formula to decide if clients are financially strong enough to borrow. A high ratio is desirable for lenders but it also suggests the bank is not putting all of its assets to work. The Quick Ratio measures liquidity, or how quickly the bank can liquidate its assets to cash, and how much. Queensland Bank showed no red flags of impending financial difficulties. The financial ratios were stable and consistent. The profit before tax fluctuated a bit, but not much in 2010 and came back in 2011. Bendigo Bank showed higher profitability or performance than Queensland, although Bendigo had more fluctuation. Bendigo Adelaide Bank showed no red flags, also pretty stable. The bank’s PBITs look great. Bendigo’s ROA of BAB increased in 2011 from 17% in 2009. Queensland dropped in 2011 from 49%, 2010.
Qualitative and nonfinancial information
Qualitative and non-financial information play a very important role in supporting the companies’ reports in the financial statements. The additional insight makes the annual report more acceptable to investors. The information in the Qualitative and nonfinancial information section adds depth. It also reflects whether or not the executives know their business and understand its operations and performance data. This section can address many things such as the sales pipeline, its products, its markets, potential threats, and opportunities. It should reflect the company’s business strategy and mission.