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Accounting Concepts and Practices Assignment

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Added on  2021-05-27

Accounting Concepts and Practices Assignment

   Added on 2021-05-27

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APPLICATION OF ACCOUNTING CONCEPTS AND PRACTICES WESFARMERS1Application of Accounting Concepts and Practices to WesfarmersYour NameInstitutional Affiliation
Accounting Concepts and Practices Assignment_1
APPLICATION OF ACCOUNTING CONCEPTS AND PRACTICES WESFARMERS2Application of Accounting Concepts and Practices to Wesfarmers Wesfarmers is a retail company that operates in Australia and New Zealand. The company dealswith products such as agrochemicals,coal, fertilizers, industrial and other mining and safety products. With its headquarters in Perth- West of Australia, Wesfarmers has its origins in 1914. Wesfarmers has four retail business units namely Coles, Home Improvements, Department Stores and Office Works. This paper seeks to review the Westfarmers Annual Report to identify the financial performance of each of the retail sections and give a report of performance for the company in 2016 and 2017. Sustainability reporting for each of the retail sections for Wesfarmers is also reviewed and rated.ColesThe Coles retail section has its origin in 1914 when the first store was opened in Collingwood - Melbourne. Since its introduction, the Cole section has grown to be an iconic retailer in the Australian market. The section operates the Coles supermarkets, Liquorland, First Choice Liquor, Coles Online, Spirit Hotels, Vintage Cellars, Coles Financials Services and ColesExpress. In terms of financial performance, the Coles sections have been improving year in year out. In 2017, the retail section posted a revenue of $39,217 million. Comparing the sales revenue for 2017 to 2016, the revenue was not a big deviation from the previous years. Earnings Before interest and tax for Wesfarmers in 2017 was $1,609 million a decline of 13.5 from 2016. Narrowing down to the individual retail sections, the Food and Liquor section brought a sales growth of 2% from 2016's figure ("Annual reports", 2018). The slight increase in sales growth for the subsection is attributed to the continued investment in the quality of service and value of
Accounting Concepts and Practices Assignment_2
APPLICATION OF ACCOUNTING CONCEPTS AND PRACTICES WESFARMERS3products for the company. Huge transaction volumes were realized as a result of a basket size improvement due to continued focus on the customer offers.Coles Retail Section Milestones in 2017 Despite operating in a very competitive and slowly growing market, the Coles retail section was able to remain committed to its customer-led strategies of increasing sales. This was done through a whole year accelerated investment plan that was aimed at enhancing customers offers (Group, 2018). The proactive investment was able to bring about a lower level of products pricesa situation which was attained through a dedicated plan to absorb the inflationary costs factors associated with the production of products such as fresh products and meat. The end result for the investment plan was an increased food quality and improved customer services quality. Another great milestone for Coles retail section is the successful investment plan for new channels and plans which continued throughout the year. The Coles online trading initiative was able to register a double-digit sales growth from 2016 to 2017("Coles Supermarkets", 2018). The Coles Financial services subsection was able to grow with the General Insurance policies being able to successfully complete a 10-year credit card distribution Contract with Citi. The Flybuys was also able to register a lot of growth in the number of its active members. Through the 2017 Annual report, the Managing Director for Coles retail subsection, John Durkan reportedthat Coles eyes continuing to extend the new channels and services further by increasing the offers advanced to customers in the Financial Services, Coles online and the loyalty program (Flybuys) initiatives in 2018. Home Improvement Retail Business
Accounting Concepts and Practices Assignment_3
APPLICATION OF ACCOUNTING CONCEPTS AND PRACTICES WESFARMERS4The home Improvement retail section is a customer focused business for Wesfarmers found in Australia and New Zealand whose main strategy is underpinned on continued improvement of performance for better gains. During the year ended 30th June 2017, Home Improvements registered a lot of improvements in terms of operation and financial performance("Home Improvement", 2018). This was achieved through a number of progress made in building strong foundations for customers through transformational retail business and development of the Bunnings product brand.Financial Performance for Home Improvements Retail Business The revenue for Home Improvement retail division of Wesfarmers in 2017 increased by awhopping 17.4 % to $ 13,356 million from the previous years $8,646 million. The improvement in the divisions revenue for the year ended 2017, was highly contributed by the Bunnings product launched in the United Kingdom and Ireland in February 2016 and the growth of Bunnings brand product in New Zealand and Australia("Bunnings, Kmart and Officeworks werethe winners, while Target and Coles struggled.", 2018). The net earnings for the retail section amounted to $ 1,245 million, a 2.6% increase from the previous year’s earnings of $275 million. The operating revenue for Bunnings New Zealand and Australia also increased to $11,514 million a percentage increase of 8.9% from 2016(Group, 2018). The overall sales growth for theHome Improvements retail store also increased by 8.9% a level which was arrived at by an increase of 7.3% in store-on-store sales. Bunnings for Australia and New Zealand also registered an EBIT of $ 1,334 million which is an increase of about 10% from 2016’s EBIT of $ 133.4 Million(Group, 2018). Department Stores Retail Division
Accounting Concepts and Practices Assignment_4

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