Essays on Financial Analysis of Woolworth Limited Case Study

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The paper 'Financial Analysis of Woolworth Limited " is a perfect example of a finance and accounting case study. Woolworth Limited is in retailing line of business. (Annual report, 2010, pg 2) The company is registered as Woolworth Limited, Principal registered office in Australia, 1 Woolworths Way, Bella Vista, New South Wales, 2153 (annual report, 2010, pg 155).   Highlights of Annual Report Various important points are highlighted in the annual report. The reason for highlighting the information is that the users of the financial statement can base their decision after looking at the financial information.

Analyzing the statement will help the investor to identify the growth pattern, the risk involved, the policies and disclosure principle being adopted by the company. This will thus act as a guide for investors, government, suppliers, customers, employees and society thereby helping every one associated with the company. The annual report covers from 1st July 2008 to 30 June 2009 completing an accounting year. (Annual report, 2010, pg 34) The highlights for Woolworths Limited are that the net sales have grown by 7.5% to reach $49.6 billion.

The growth in the EPS is by 11.7%, net profit has grown by the tune of 12.8%, the dividend paid per share has grown by 13% and all this are after normalizing hotel and property profits. (Annual report, 2010, pg 3) Auditors and purpose of auditing The reports of Woolworths have been audited by Deloitte Touche Tohmatsu and it helps the users to gauge the validity of the financial statement. (Annual report, 2010, pg 55) Since the auditor gives a declaration that the information is true and the auditor will be held liable for any misgivings ensure that the financial information is correct.

This thus will help the investor to believe that information provided is correct. Non-financial Information The non-financial information present in the statement is The consumer electronics has shown excellent result as they have repositioned their strategy to create new brands and store formats. (annual report, 2010, pg 20) “ The hotels business despite the slowdown in growth has shown better performance as the company focussed to reduce cost thereby enabling them to fight adverse conditions” (annual report, 2010, pg 22) Financial Information The financial information available for Different Financial Statement Prepared Woolworths Limited had prepared various financial statements and the purpose they serve for the company are as follows Income Statement: This helps to “ find the profits attributed by the company due to the normal operation of the business” .

(annual report, 2010, pg 66) Balance Sheet: It shows “ balances of assets and liabilities and helps in the future to generate revenue” (annual report, 2010, pg 66) Cash Flow Statement: It shows “ the cash flow due to investment, operation and financing activity and gives a more detailed explanation of the manner in which the company employed its resources” (annual report, 2010, pg 67) Statement of changes in equity: It reflects the “ changes in owner’ s capital i. e.

share capital due to the issue of a share, change in minority interest and other factors which affects the owners’ capital” . (annual report, 2010, pg 68) Remuneration report: It shows the “ compensation paid to the managers, employees, chairman and the manner in which it is accounted for” (annual report, 2010, pg 44)

References

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