Accounting for Business Decisions

INTRODUCTION1

DISCUSSION1

PART A1

Overview of the ANZ-Australian National Bank1

Products and Marketing1

Financial Highlights2

Overview of the NAB-National Australia Bank2

Products and Services2

Financial Highlights2

Part A2: Balance Sheets Analysis2

Total Current Assets3

Total Non-Current Assets3

Total Current Liabilities4

Total Non-Current Liabilities4

Total Stockholder's Equity4

Part A3: Income Statement Analysis5

Total (Operating) Revenues5

Total Expenses (Before Income Taxes)6

Earnings per common share6

Part A4: Cash flow Analysis7

Net Cash Inflow (Outflow) From Operating Activities8

Net Cash Inflow (Outflow) From Financing Activities8

Net cash inflow (outflow) from Investing Activities9

Net Increase (Decrease) In Cash during The Year10

Part A5: Stockholders' Equity10

PART B: CASE STUDIES12

1. Journal entries and Ledger accounts12

2. Post -adjustment trial balance18

3. Income statement and Balance Sheet19

REFERENCES21

Accounting for Business Decisions

Introduction

Companies utilize Management Accounting Techniques for better and effective decision making. Accounting Department decisions are based on three categories. These categories are people that manage business, people that have direct connection with company's financial performance and people having indirect effect. Hence, these three points highlights the importance of understanding financial statements and their use while making decisions. The task of this study is to compare two publicly held companies specifically in the same industry through which it would be easy to understand the structure of financial statements. Companies selected for this task are ANZ-Australian national bank and NAB-National Australian Bank.

Discussion

PART A

Overview of the ANZ-Australian National Bank

ANZ - Australian and New Zealand Banking Group Limited has been the third largest bank in Australia in terms of market capitalization which was established in 1835. This bank has been serving major market of Australia. Operation of Australia structures the largest part of ANZ business i.e. approximately 6 million retail and commercial customers via network of 800 branches, business centers - 115, ATMs - 2700 along with mobile banking and online application. This bank has also been operating in New Zealand and has been the largest bank and due to this, this legal entity in 2003 converted into ANZ National Bank (ANZ Banking Group Ltd, 2013).

In order to make banking easy, ANZ has announced Banking on Australia that was a five-year $1.5 billion investment program. With this program, banking would be much easier with respect of customer support, people and their community. Currently, this bank has been operating in 2 markets across the globe (ANZ Banking Group Ltd, 2013).

Products and Marketing

The main products offered by this bank are personal banking, banking for small business, corporate banking and other banking related to Corporate and Commercial Banking.

Financial Highlights

2012 was an excellent year for ANZ since they have posted strong financial results in terms of profitability as well as efficiency. ANZ has made continuous progress in 2012 with their regional strategies. Profit after tax was 6% high than last year while there was 4% increase in dividends. The success of regional strategies was due to investments in different areas such as in customer services and innovation, investment in Asia - China and investment in technologies (ANZ Banking Group Ltd, 2013).

Overview of the NAB-National Australia Bank

National Australia Bank is among four largest banks in Australia and 17th largest bank in the world in term of market ...