Analysis Of Financial Report Of MEDIBANK Private Limited

Business Operation of MEDIBANK Private Limited

Question:

The analysis of the financial report of MEDIBANK Private Limited.
 

Wolf, M. (2008). Fixing global finance. Baltimore, Md.: Johns Hopkins University Press.

To: The Board of Directors

From: MEDIBANK Private Limited

Date: 31.05.2015

Subject: The analysis of the financial report of MEDIBANK Private Limited

The MEDIBANK private limited business operation includes providing quality health care to their customers. The company focus on the large and the sustainable health care services that are required for the increment and the growth of the sustainability. It also keeps eyes on the future benefit claims which are arranged for enhancing the further cooperation. Thus it also helps in signifying the values that are requisite for the sustainability for the proper rising of the market competition (Droms and Wright, 2010). Thus it helps in signifying the overhead management and the values that are required for the proper continuation of the business operation and thus it also helps in the proper enhancement of the business operations that are carried out for the formation of the support for the organisation. Furthermore, the company’s innovative ideas help the company to make progress with implementing the process in the organisation. The stakeholders of the company include shareholders, employees, community and other members associated with the company (Holton, 2012). The subsidiaries of the company includes Integrated Care Services Pty Ltd, The Travel Doctor TMVC Pty Ltd, IQ Consultants Pty Ltd, MEDIBANK Health Solutions Telehealth Pty Ltd, Fitness2Live Pty Ltd, Fitness2Live (UK) Ltd, MEDIBANK Health Solutions New Zealand Ltd, MEDIBANK Health Singapore Pte Ltd and MEDIBANK Asia Pte Ltd. 

The financial statement of the company shows the actual value of the company as well as its actual performance.  The financial statements are prepared as per the accordance of the accounting standards and both by the subsidiary and parent company of the group.  It helps the organization to structure their activities that helps in the creation of the proper growth for the company. The subsidiary statements help in the separation of the group which helps in claiming the increment of the profit in front of the parent entity (Horngren, 2013). Therefore, in the case of the MEDIBANK Private Limited, the claims on the profit could not be made by the company that are earned by the MEDIBANK Community Fund. Thus it helps in the creation of the significant differences that helps the company in the process of the evaluation of the considered risks. Therefore the consolidated financial statements are made by the parent organisation and the subsidiary organisation helps in the creation of the legal entity.        Hence it also helps in the proper continuation of the safeguards for the appropriate prolongation of the rules and the policies in regarding the protection of information connected to the financial statements of the organisation (Kew and Watson, 2012).

The funding options are available for the organization that exists for raising the funds of the organisation and thus financing their operating as well other activities of the organization (Kieso, Weygandt and Warfield, 2010). It also helps in the increment of the shares and the debentures from the public for the case of the increment of the funds. Debenture is a fund that the company provides fixed interests to the debenture holders and thus it also helps in completion of the debenture terms and the conditions that are required for the appropriate enhancement of the organisation’s obligations and therefore, the organisation helps in the provision of the interests for the proper creation of the profits for the company and thus for the others also (Kimmel, Weygandt and Kieso, 2007). The companies are also helpful for the purpose of raising the funds that are required for the solving the company’s issues. The MEDIBANK Health Solution Pty Ltd is owned by the MEDIBANK Private Limited. The MEDIBANK Private Limited is an insurance company as well as the health company which helps in the provision of the shareholders that are helpful for the proper creation of the firm. Thus the infrastructural facilities that are created also helps in the improvement of the firms as well as the profit of the organisation. It can be achieved by the proper incurring of the losses that helps in incurring the losses that are required for the appropriate determination of the company’s funds and thus it also helps in the creation of the losses that makes the investors and the other bankers to suffer a lot (Lambert, 2011). Thus the company also provides the facilities likes as the bonuses to the debentures and the shareholders of the company for the profits as per the case. Besides these all the things, the bankers and the investors also helps the company to raise the fund of the company that helps in the carrying out the fund gaining activities by the company.

Subsidiaries of MEDIBANK Private Limited

Source: (Anon, 2016) 

The financial statement of the organization provides significant information to the shareholders and the stakeholders of the organization. The financial reporting or the reports need to be aligned with International Financial Reporting Standards, and it is also published by the International Accounting Standards (Libby, Libby and Short, 2014). This is also prepared as per the Standards of Australia Accounting. The financial information of the organization discloses the corporate governance information is to capitalize on the business presentations, returns of the shareholders are seemed to be maximized and also its worth, to sustain the success and the development of the organization. It also incorporates risk supervision, corporate governance policies and practices including the process of risk supervision. The auditing group describes the financial information or the declarations of the company and also determines the exact value of the organization through its performance in their present market field. Sustainability of the company can be evaluated and determined by the given information in this financial statement field (McCarthy et al., 2012). The annual performance with its report need to be categorized as operational, financial, regulatory risks, and it incorporates the economic sustainability risks. The solvency risk of the organization may analyze with the assists of the financial leverage ratio, debt-equity and also to calculate the current ratio from the given information in this financial statements or the financial reporting. The proper income statement represents the profit, expense, revenue, and loss of the organization. It assists in determining the long term and short term performance of the organization like MEDIBANK Private Ltd. 

The financial statement of the company shows the non controlling interests that are paid on the shares that are outstanding. Non-controlling interests are the total sum that is remunerated on due shares of the organization within the fiscal year (McMillan, 2010. The non controlling interest is represented on their balance sheet of the company Depending on the acquisition the organizations determine the non controlling interests of particular exclusive property of acquiring. The surplus of the relocated consideration includes the sums of non-controlling interests to get hold of above the shares of the fair value of the organization to acquiring their net assets that are mostly recorded as the behavior. The intercompany transactions, unrealized gains and also the balances in between the group company need to be eliminated and also in this scenario; the unrealized losses are also reduced until the transaction is correctly supplied the manipulation of the transferred property or the transferred assets. The consolidated balance sheet of the group, as well as the firm like MEDIBANK Private Ltd, represents the non controlling interests (Robinson, 2009).

The goodwill of a company is valued with the performance or enhanced operations of the company which indicates strong financial position of the organization. With the help of appropriate acquisition strategies the company would be able to achieve acquisition of the promising organization and building reputation in the market. The strong financial position of the company will lead to increase in the value, enhanced performance as well competing with other companies in the market (Rosen, 2005). The goodwill account shows in the balance sheet of the company for the year end. The acquisition strategy imposes considerable impact on the goodwill of the company. In bargaining the trader it can be either seller or buyer focus on maximum gain from the transaction. Therefore, in this case if the seller able to sell the product at the price fixed by him then it would be gain for him and is the buyer able to decrease the price of the product then it would be gain for him. The income statement shows the purchase and sale of the products and balance sheet shows the goodwill on the acquisition.  Therefore, the financial statement of the company shows the purchase and sale of the products and services (Spiceland, 2009).

Financial Statement and Its Importance

MEDIBANK private limited also trade in the foreign market and hence it leads to foreign currency transactions. The company determines and evaluated risks in the foreign currency transactions in order to develop the company in the foreign market. The contacts, instruments derivatives and products are traded by the company.   The consolidated income statement shows the exchange differences on the translation of the foreign operations (Weygandt, 2009). However, the risk rising from the financial apparatus of the group is risk of interest rate, risk of credit, price risk including liquidity risk and foreign currency risk. Different techniques and methods are used to manage such types of risks such as monitoring the exposure levels of foreign exchange risk, price risk and interest rate. The board agrees and reviews the policies to manage the risk which includes limits to trade in the derivatives, instruments derivatives and foreign currency contracts. The foreign subsidiary companies of MEDIBANK private limited are the HATCHTECH Pty Limited and MEDIBANK Community Fund (Wolf, 2008). The foreign exchange trading is also shown in the income statement of the company for the year ended. The HATCHITECH Pty limited is a biotechnology organization which is an International federation of planning of health. Apart from this, the subsidiaries of the company are MEDIBANK Health Solutions Pty Ltd and Australian Health Management Group Pty Ltd. The financial statement of the company shows the current balances of the foreign currency transactions and ordinary shares issued by the company. The foreign currency risk refers to the risks that fair worth of the financial instrument would vary because of the changes in the rates of the foreign currency (Lambert, 2011). However, the investment in infrastructure and syndicated loans are managed externally and exposures of the currency are hedged by fund manager. The international equities are managed externally and half of the exposure of the foreign currency is unhedged. The group has transactional exposure of the currency that arises from the purchases of the currencies other than functional currency. The transactions includes operational costs within other payable and trade that are minimal and the purchases of the foreign currency investment.    

Source: (Reuters, 2016)

The financial statements of MEDIBANK private limited shows that the company is growing and shows positive results. The net income of the company is appropriate and the current ratio is above one which means that the company would be able to pay its debts (Kieso, Weygandt and Warfield, 2010). The share market price is also appropriate which means that the performance of the company is increasing in the current market situation. The MEDIBANK private limited provides increment benefits to their employee and appropriate training to them. The net income of the bank in the year 2015 is AUD285 millions and in the year 2014 it was AUD130.8 million. Therefore, the financial statements show that the company is having developing showing positive results and income (Kew and Watson, 2012). There the bank is earning income and generating maximum returns for their shareholders through internal trading and foreign exchange trades. MEDIBANK private limited would secure its position in the current market environment and operating its business for the benefits of their stakeholders.  

References

Droms, W. and Wright, J. (2010). Finance and accounting for nonfinancial managers. New York: Basic Books.

Holton, R. (2012). Global finance. Abingdon, Oxon: Routledge.

Horngren, C. (2013). Financial accounting. Frenchs Forest, N.S.W.: Pearson Australia Group.

Kew, J. and Watson, A. (2012). Financial accounting. Cape Town: Oxford University Press.

Kieso, D., Weygandt, J. and Warfield, T. (2010). Intermediate accounting. Hoboken (NJ): J. Wiley.

Kimmel, P., Weygandt, J. and Kieso, D. (2007). Financial accounting. Hoboken, NJ: John Wiley.

Lambert, R. (2011). Finance & accounting. Philadelphia: Wharton Digital Press.

Libby, R., Libby, P. and Short, D. (2014). Financial accounting. Maidenhead: McGraw-Hill Education.

McCarthy, J., Shelmon, N., Mattie, J. and Gross, M. (2012). Financial and accounting guide for not-for-profit organizations. Hoboken, N.J.: Wiley.

McMillan, E. (2010). Not-for-profit accounting, tax, and reporting requirements. Hoboken, N.J.: Wiley.

Robinson, T. (2009). International financial statement analysis. Hoboken, N.J.: John Wiley & Sons.

Rosen, H. (2005). Public finance. New York: McGraw-Hill Irwin.

Spiceland, J. (2009). Intermediate accounting. Boston: McGraw-Hill/Irwin.

Weygandt, J. (2009). Hospitality financial accounting. Hoboken, N.J.: John Wiley & Sons.