Comparison of Financial Statements - Wesfarmers Limited and Woolworths Limited

Running head: COMPARISON OF FINANCIAL STATEMENTS
Comparison of Financial Statements
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Author’s Note

1COMPARISON OF FINANCIAL STATEMENTS
Wesfarmers Limited and Woolworths Limited are two of the major retail companies of
Australia. It needs to be mentioned that the financial statements of Wesfarmers and Woolworths
have some similarities as well as some differences. The major similarities and differences are
discussed below:
Balance Sheet
Wesfarmers

2COMPARISON OF FINANCIAL STATEMENTS
Table 1: Statement of Balance Sheet
(Source: wesfarmers.com.au, 2017)
Woolworths
Table 2: Statement of Balance Sheet
(Source: woolworthsgroup.com.au, 2017)

3COMPARISON OF FINANCIAL STATEMENTS
According to the above tables, it can be seen that both Wesfarners and Woolworths
follow a specific structure for presenting various aspects in the balance sheets; they are current
assets, non-current assets, total assets, current liabilities, non-current liabilities, total liabilities,
shareholder’s equity and total equity. Thus, it is clear that both the companies have adopted
narrative format for their balance sheets. Both the companies follow the principles and standards
of Australian Accounting Standard Board (AASB) and International Financial Reporting
Standards (IFRS). The main balance sheet equation of these two companies is:
Assets = Liabilities + Equity
However, in case of Wesfarmers, the carrying value of recognized assets and liabilities are
adjusted to record the changes while this is not done in case of Woolworths (wesfarmers.com.au,
2017).
Income Statements

4COMPARISON OF FINANCIAL STATEMENTS
Wesfarmers
Table 3: Income Statement
(Source: wesfarmers.com.au, 2017)

5COMPARISON OF FINANCIAL STATEMENTS
Woolworths
Table 4: Income Statement
(Source: woolworthsgroup.com.au, 2017)
In case of the income statements, some major differences can be seen between these two
companies. It can be seen that the income statement of Woolworths has more detailed
presentation of all the necessary facts than Wesfarmers. Woolworths has clearly shown the

6COMPARISON OF FINANCIAL STATEMENTS
arrival of gross profit in their income statements while the income statement of Wesfarners does
not have any details about gross profit (wesfarmers.com.au, 2017). Both the companies have
shown the amount of Earnings before Interest and Tax (EBIT) in their income statements. After
that, both the companies have shown the amount of profit or loss attributed to the equity
shareholders in their income statements. Some common aspects can be seen in the income
statement of both the companies; they are revenue, financial costs, tax expenses, profit, earnings
per share and others. In addition, it can be seen that both the companies have provided notes of
their income statements in their financial statements.
Cash Flows
Wesfarmers

7COMPARISON OF FINANCIAL STATEMENTS
Table 5: Statement of Cash Flows
(Source: wesfarmers.com.au, 2017)

8COMPARISON OF FINANCIAL STATEMENTS
Woolworths
Table 6: Statement of Cash Flows
(Source: woolworthsgroup.com.au, 2017)
From the above figures, it can be seen that both Wesfarmers and Woolworths use to
follow same structure for their cash flows. They are cash flow from operating activities, net cash
flows from operating activities, cash flow from investing activities, net cash used in investing
activities, cash flow from financing activities and net cash used in financing activities. Both
Wesfarmers and Woolworths have adopted same format for cash flows as AASB and IFRS

9COMPARISON OF FINANCIAL STATEMENTS
govern various activities of cash flows (woolworthsgroup.com.au, 2017). However, based on the
business activities of these two companies, the amounts of various activities vary from each
other. The above figures also show that both the companies have almost same activities in their
cash flows.
Statement of Change in Equity
Wesfarmers
Table 7: Statement of Change in Equity
(Source: wesfarmers.com.au, 2017`)

10COMPARISON OF FINANCIAL STATEMENTS
Woolworths
Table 8: Statement of Change in Equity
(Source: woolworthsgroup.com.au, 2017)
From the above figures, it can be seen that there is a major difference between the
statement of change in equity of equity of Woolworths and Wesfarmers. Wesfarmers use to

11COMPARISON OF FINANCIAL STATEMENTS
follow one statement to show change in equities while there are two statements of change in
equity for Woolworths for 2016 and 2017 (woolworthsgroup.com.au, 2017).
Thus, the above discussion shows the major similarities and differences between the
financial statements of Woolworths and Wesfarmers.

12COMPARISON OF FINANCIAL STATEMENTS
References
2017 Annual Report. (2017). Wesfarmers.com.au. Retrieved 22 November 2017, from
https://www.wesfarmers.com.au/docs/default-source/default-document-library/2017-
annual-report.pdf?sfvrsn=0
2017 Annual Report. (2017). Woolworthsgroup.com.au. Retrieved 22 November 2017, from
https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf