Analysis of the Wesfarmers

Running head: WESFARMERS ANALYSIS 0
Analysis of the Wesfarmers

WESFARMERS ANALYSIS 1
Table of Contents
Part I......................................................................................................................................................2
Answer 1...............................................................................................................................................2
Answer 2...............................................................................................................................................2
Answer 3...............................................................................................................................................2
Answer 4...............................................................................................................................................2
Answer 5...............................................................................................................................................3
Part II.....................................................................................................................................................4
Efficiency ratios.................................................................................................................................4
Profitability Position..........................................................................................................................4
Debt Position.....................................................................................................................................5
References.............................................................................................................................................6

WESFARMERS ANALYSIS 2
Part I
Answer 1
The principle activities of the Wesfarmers company are dealing in the chemicals, fertilisers,
coal mining, industry and safety of the products (Campbell, 2017).
Answer 2
The company is following the revenue recognition policy of recording the revenue at fair
value. The revenue is recognised if it meets the different criteria’s as listed
The sale value of the goods, the amount of interest, dividends and the revenue from operating
lease rental revenue are the core items that will affect the (Wesfarmers, 2018).
The policy is denoted on page number 56 of the annual report (Wesfarmers, 2018).
Answer 3
The valuation of the property plant and equipment is calculated at the cost of the asset and the
value of the impairment and depreciation will be deducted from the cost of the plant, property
and the equipment. Also the items of the plant property and equipment are depreciated on
straight-line method over their useful life of assets. Also expenditure on the mining such as
interest is amortised. The same is presented on the page number 58 of the annual report of the
Wesfarmers (Tepalagul and Lin, 2015)
Answer 4
The Ernst and young is the auditing firm which is responsible for the audit of the financial
statements of Wesfarmers Limited.
The core purpose of the audit is the display the true and the fair value of the company and
also provides the independent opinion on the same. Independence is the key component that
describes the ability of the auditor to perform in a better manner. The auditor must declare
their auditor independence as it is mandatory for the company to have its financial statement
audited by the auditors. The auditor’s opinion shall be independent so that it not influenced
by any relationship. There are certain doubts which are raised regarding the independence of