Detailed Analysis of the Financial Performance of Wesfarmers

Running head: FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
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FINANCIAL ACCOUNTING1
Executive Summary
The assignment deals with detailed evaluation, analysis and interpretation of the financial
performance of the chosen company which is Wesfarmers. The evaluation is based on the
information’s which are generally obtained from the annual report of last 4 years which are
2015, 2016, 2017 and 2018 of Wesfarmers. It is significant for the upper level managers or
the board of directors of the firm to evaluate and analyze the criticality of the financial
statement of the company with the help of graph and charts. Each and every department
within an organization critically analyses the glitches or the loopholes in the system and tries
to make a report of that in order t rectify it accordingly. In case of taking the major financial
decision of the company it is needed to understand the current financial status of the firm and
then take decisions based on the conducted evaluation.

FINANCIAL ACCOUNTING2
Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................2
Financial Ratios......................................................................................................................2
Financial Statement Analysis.................................................................................................7
Forecast and Risk Evaluation.................................................................................................9
Conclusion..................................................................................................................................9
References................................................................................................................................10

FINANCIAL ACCOUNTING3
Financial Performance and Health
Organizational Context
Established in 1914 in Western Australia as a farmers’ cooperative, Wesfarmers is
one of the largest listed Australian companies today. It is involved in various businesses like
merchandise, retail, fertilizers and outdoor living. The main objective of the organisation is to
provide satisfactory returns to all of its shareholders while also conducting its business with
integrity and honesty. As a company looking to keep its reputation intact in the market,
Wesfarmers looks to maintain its target in aspects like safety, diversity, human rights and its
contribution to the community. Hence any decisions taken by the organisation do not violate
the principles and beliefs of the organization. The company is divided into various
subsidiaries like Coles, Bunnings and Kmart which operate in different parts of Australia and
operate in sectors different from each other (Wesfarmers.com.au, 2019).
Recent Financial Performance
2018 2017 2016
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70000
Income position
Sales
EBIT
Net profit after tax
The computation of the financial ratios of the firm from the given information’s of the
company is necessary in order to understand the financial performance of the company in