Woolworths Group Financial Analysis
Added on 2020-03-07
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Company Analysis – Woolworths Group
About Woolworths GroupWoolworths Supermarkets is a company which is based out in Australia and deals in groceryretail chains and other conglomerates utilities. It was founded way back in early 1920's. Itscurrent headquarters is in Bella Vista, Australia. Along with its competitor Coles WoolworthsSupermarkets old around 80% of retail Supermarket industry of Australia. It is located in morethan around 961 locations in the geographical regions of Australia and New Zealand. There aremore than around 111000 employees working for Woolworths group. Woolworths has it's retailoutlet Store in almost every state of Australia. Apart from its food retail chains company hasdiversified its business operations in the segment of petroleum, hotels and tourism and spellingof liquor. Decision making through financial statementsMaintaining the record of financial position or fund statement is highly relevant for any businessorganization. People or groups associated with business get the complete knowledge about thecompanies current performance while evaluating these financial statements. Maintaining thefinancial records is also a legal requirement for any business enterprise. Additionally, luckymanagers of the company can also work out the differences between the actual performance ofthe company and what is desired for meeting their desired goals and objectives. For this varianceis this statement is prepared by the business group and financial manager. Stakeholders of thebusiness are mainly segregated into two segments. These are internal stakeholders and externalstakeholders. Internal stakeholders include business managers, workers, and employees of thecompany, board of director etc. They are interested to evaluate the profitability and current cashpositions of the company in order to ensure the smooth working of the group. They are alsoworried about their future while being associated with the company. With the help of financialstatements and other reports, they can figure out their possibility for the future period. On theother hand, external stakeholders include business investors, shareholders, lenders, creditors etc.They are interested to know about the financial statement, profitability statement and cash flowpositions of the company. The required information in order to access the knowledge about thecompany before investing in the particular portfolio.
Accounting policies followed by Woolworths group The policies and standard followed by the group are in similarity with the Australian accountingstandards and policies framed up by ASX. There is not much change and deviation in regards togeneral laws and regulations. The profitability of the company is affected by it poor marketingstrategies of the managers and bad investment decisions.Financial Crisis with Woolsworths groupDuring the financial year, 2016 company suffered the heavy loss of around $ 1.235 billion whichis almost 157.5 percent lower as in comparison to the previous year data. The company hassacked the jobs of around 800 employees working at different positions during the previous yearas a part of its cost cutting. Major employees were removed from the support departments that issupply chain department and support department office[ CITATION Ste16 \l 9225 ]. The companyis also looking forward to closing its loss making units and stores.Image 1 – Woolworths group Net profit after tax Source - [ CITATION Ste16 \l 9225 ]From the bar charts it has been witnessed that the leading supermarket chain in Australia if suffering from the crisis. The marketing strategy of the company has resulted out in failure it resulted in out as a trigger of change towards negative direction which might affect the fortune ofthe company. The last year financial figures were not satisfactory and another disappointment has been added to the company's portfolio when the quarter 1 figures were not up to the mark. The company has to revive its losing market and brand reputation as soon as possible yes it will
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