corporate Finance Assignment 2022

Running head: CORPORATE FINANCE
Corporate Finance
Name of the Student:
Name of the University:
Author’s Note:

CORPORATE FINANCE1
Table of Contents
Part A...............................................................................................................................................2
Overview..........................................................................................................................................2
Analysis of Company Objectives....................................................................................................2
Wealth Maximisation...................................................................................................................2
Profit Maximisation.....................................................................................................................3
Ethical Suppliers..........................................................................................................................4
Employees....................................................................................................................................5
Gender Equality...........................................................................................................................6
Social Responsibility...................................................................................................................6
Profit vs. Wealth Maximisation.......................................................................................................7
Part B...............................................................................................................................................7
References......................................................................................................................................10

CORPORATE FINANCE2
Part A
Overview
The companies that are selected for the purpose of financial analysis is the Woolworths
and BHP Ltd Company whereby the operations of the company is into different industries.
Woolworths Supermarket is an Australian Supermarket Grocery Store that is owned and
managed by the Woolworths Group. The BHP Billiton Company on the other hand, operates as
an Multinational Mining, Metals and Petroleum Company that is headquartered in Melbourne,
Australia. The above companies taken into consideration is listed in the Australian Stock
Exchange whereby each company analysed is one of the biggest market share holders in their
respective industry. It is well important to note that with the wide scale of business operations
and activities there are several polices in terms of profit maximisation, wealth maximisation,
environmental issues, suppliers policy, employee relationship, gender equality and social
responsibilities policy that needs to be analysed. The policies mentioned would be able to better
explain and understand us regarding the various courses and set of actions that are taken by the
company in the trend period taken into consideration.
Analysis of Company Objectives
Wealth Maximisation
Wealth Maximisation is the concept of increasing the value of business so that the value
of the shares held by the shareholders of the company ultimately increases in the trend period
analysed for the company.

CORPORATE FINANCE3
Woolworths: The wealth creation by the Woolworths Company can be well inferred to the
increase in the equity value of the company $955 million and the same can be well inferred with
the increase in the retained earnings of the company that was a result of increased profitability of
the company for the year 2018 representing an increase of 10.03% (Annual Report, 2019).
BHP Ltd: The equity balance of the company on the other hand, saw a decline where by the
equity value of the company has declined by about $1,666 million representing a decrease by
2.91%. The decrease or fall in the value of equity could be well contributed to the fall in reserves
and retained earnings of the company (Annual Report, 2019).
Change in Total Equity Value
Particular
s
201
8
201
7
Change
(%)
Woolworth
s
104
81
952
6 10.03%
BHP Ltd
555
92
572
58 -2.91%
Profit Maximisation
In terms of profit maximisation the resultant increase in the profitability of the company
from one year to another in the trend period analysed could be well judged with the increase in
the reported net profitability of the company.
BHP Ltd: The reported profit by the Woolworths Company for the year 2018 was around
$7,744 that was considerably much higher than the last year profitability of $6,694 representing
an increase of 12.68% for the company. The massive increase of revenue in the financial year
was the key reason for increased profitability of the company for the period 2018 (BHP
Sustainability Report, 2019).