Analysis of Woolworth's Financial Statements: Ratio, Horizontal, and Vertical Analysis

Essay

Executive summary
The current report provides a detailed analysis of Woolworth’s financial statements by
making use of different financial accounting tools that includes ratio analysis, vertical &
horizontal analysis. This tool helps in determining and making comparative assessment of
company’s performance and position over the periods. From the study it has been reflected that it
is performing in a better and efficient manner by making best possible use of its assets, sales and
profits for meeting its liabilities and costs.

TABLE OF CONTENT
Executive summary.......................................................................................................................2
INTRODUCTION.........................................................................................................................4
Discussion and analysis.................................................................................................................4
Ratio analysis...............................................................................................................................4
Horizontal analysis......................................................................................................................7
Vertical analysis...........................................................................................................................9
CONCLUSION............................................................................................................................11
REFERENCES............................................................................................................................13

INTRODUCTION
The present report is based on Woolworth’s group, operating as the largest chain of
supermarket in Australia. It has around 996 stores within an entire Australia and it relies on
approx 115000 group members, center of distribution and the support offices for facilitating their
customers with the superior service, value, convenience and range. The company is led with an
objective of creating better experiences by their core values and an agile way of the working.
The firm creates better experiences together for making the tomorrow better. It is the second
largest organization in the Australia by the revenue after the Perth-based retail sector
conglomerate wesfarmers & 2nd largest in the New Zealand. Furthermore, the report provides an
analysis of the company’s final reports by using ratio analysis, Horizontal & vertical analysis.
Discussion and analysis
Ratio analysis
Woolworths
Ltd.
Profitability ratios
Particulars Formula 2018 2019
Gross profit 16709 17442
Net sales 56944 59984
Gross profit ratio Gross profit/Net sales*100 29% 29%
Particulars Formula 2018 2019
Net profit 1676 1559
Net sales 56944 59984
Net profit ratio Net profit/Net sales*100 3% 3%
Liquidity ratios
Particulars Formula 2018 2019
Current assets 7014 6298
Current liabilities 9029 8620
Current ratio Current assets/ Current liabilities 0.78 0.73
Particulars Formula 2018 2019
Current assets 7014 6298
Inventory 4233 4280