Case:You are hired by a client to conduct an analyst service for Woolworths Group as they are thinking of buying some shares for that company and become their investors. They asked for your help to...

1 answer below »
Case:You are hired by a client to conduct an analyst service for Woolworths Group as they are thinking of buying some shares for that company and become their investors. They asked for your help to conduct an analysis of Woolworths Group’s financial statements and give them some recommendation at the end whether to invest in the business or not.Required:Refer to Woolworths Group financial statements 2018 and 2017 and make a formal report to your client and use the below questions as a guideline for you to make a recommendation.1. How much profit did they earn for the period ended 2018? Do a horizontal analysis for the profit and use 2017 as the base year! Is it better or worse than 2017? Why do you think it happened? Comment on their overall financial performance in 2018 compared to 2017! (3 Marks)2a. Calculate their Current ratio and Quick ratio for 2018 and 2017! Compare those two years and give comment whether they are better or worse in 2018! (3 Marks)2b. Explain what are the differences between current ratio and quick ratio! What can you tell about the quick ratio in Woolworths group compare to their current ratio? Do some research on the industry average and comment whether it is normal for woolworths to have those numbers for their ratios. (3 Marks)3. Have a look at the Statement of Cash Flow of Woolworths group in 2018! What does it mean by operating, investing and financing activities in the statements? Briefly comment on Woolworths group performance in those 3 activities in 2018! (3 Marks)Your report should be at the maximum of 1,000 words with reference list excluded from the word count.Your report should include: introduction, body, conclusion, recommendation and reference list (1 Mark). Correct reference list using APA style is required (1 Mark) and the report should be presented professionally (1 Mark).=
Answered Same DaySep 20, 2021

Answer To: Case:You are hired by a client to conduct an analyst service for Woolworths Group as they are...

Khushboo answered on Sep 21 2021
146 Votes
FINANCIAL ANALYSIS
FINANCIAL ANALYSIS        9
FROM:
DATE:
SUBJECT: FINANCIAL ANALYSIS
Executive Summary:
This report has been prepared to analyze the financial position of the Woolsworth Group Limited by performing the horizontal analysis of the profit and loss account. Further this report also deals with the analysis of the liquidity position of the entity by performing ratio analysis. The cash flow statement of the entity also states that the entity is performing well as the entity is having net cash inflow from all the three activities. Thus from the various analysis it is determined that the entity is financially well performing and is a stable entity and will sustain in the near future.
Table of Content:
    Sr. No.
     Particulars
    Page no.
    
    Introduction
    4
    1.
    Horizontal analysis of profit and loss account
    4-5
    2a.
    Calculation of current ratio and Quick ratio
    5-6
    2b.
    Difference between current ratio and quick ratio
    6
    3.
    Analysis of Cash Flow Statement
    6-7
    
    Conclusion/ Recommendation
    7
    
    References
    8-9
Introduction:
Woolsworths is the biggest supermarket chain of the Australia and it operates about 995 stores in Australia. The entity is connected with the farmers of the country to ensure that the best products are available to the customers. The purpose of the report is to ensure that the entity is performing well in terms of the financial performance through horizontal analysis and to analyze the liquidity position of the entity by calculating current and quick asset ratios. Further the cash flow statement of the entity is also analyzed to determine the cash movement of the entity.
1. Horizontal analysis of profit and loss account:
    Particulars
    2018 ($m)
    2017 ($m)
    Movement
    % movement
    
     
     
     
     
    Revenue from sale of goods and service
    56726
    54841
    1885
    3%
    Other operating income
    239
    193
    46
    24%
    Total operating income
    56965
    55034
    1931
    4%
    COGS
    40256
    39105
    1151
    3%
    Gross Profit
    16709
    15929
    780
    5%
    Other income
    222
    244
    -22
    -9%
    Branch expenses
    10854
    10671
    183
    2%
    Administrative expenses
    3529
    3176
    353
    11%
    Profit before interest and tax
    2548
    2326
    222
    10%
    Finance costs
    154
    194
    -40
    -21%
    Earnings before income tax
    2394
    2132
    262
    12%
    Income tax expense
    718
    651
    67
    10%
    Profit from continuing operations
    1676
    1481
    195
    13%
    Discontinued operations
     
     
     
     
    Profit from...
SOLUTION.PDF
SOLUTION.PDF

Answer To This Question Is Available To Download

Submit New Assignment

Copy and Paste Your Assignment Here
Have files?