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RUNNING HEAD: FINANCEFinancial analysis
Finance1ContentsIntroduction...........................................................................................................................................2Description of Woolworths Group Limited...........................................................................................2Ownership-governance structure...........................................................................................................3Key Fundamental Ratios.......................................................................................................................3Short-term solvency ratios.................................................................................................................3Long term solvency ratio...................................................................................................................5Asset utilization ratios.......................................................................................................................6Profitability ratios..............................................................................................................................8Market value ratios............................................................................................................................9Share price analysis.............................................................................................................................10Announcements...................................................................................................................................12Analysis of stock.................................................................................................................................13Estimation of weighted average cost of capital....................................................................................14Analysis of Debt ratio..........................................................................................................................14Dividend policy...................................................................................................................................15Recommendations...............................................................................................................................16Conclusion...........................................................................................................................................16References...........................................................................................................................................17
Finance2IntroductionFinancial performance analysis is very important for the company as well as for the investor.It helps the potential investors in taking important decisions regarding their investment in aparticular company. The analysis include overall evaluation and measurement of company’sfinancial position. It includes all the financial and non-financial aspects that reflects the trueperformance of an organization.This report contains an overall financial analysis of an Australian company named asWoolworths Group Limited. It contains a brief introduction about the company and itssubstantial shareholders. Later the fundamental ratios are also calculated along with themeasurement of company’s stock performance against ordinaries indices. The report alsofocuses on the WACC of the firm and its debt ratio analysis. In addition to this, the dividendpolicy followed by Woolworth is also discussed later in this report. The last part focuses onthe recommendation and the conclusion which includes findings of the report.Description of Woolworths Group LimitedThe company is a major retailer operating in Australia. The company majorly operatesthrough Australia and New Zealand. After Wesfarmers, it is the second largest retailer interms of revenue and also known as the largest takeaway liquor retailer in Australia.Approximately 205,000 employees are working in Woolworths and the company serves over29 million customers across the world. The mission of company is to deliver best and qualityproducts to its customers along with the easy and amazing convenience facility. The mainaim and focus of Woolworths is to be ranked first across all its brands by the customers.Being an Australian company, itis publicly listed on theASX and has ticker symbolWOW.AX.
Finance3Ownership-governance structureMain substantial shareholdersThe company has no substantial shareholders which holds more than 5% and 20% share inthe business.Firm GovernanceThe Chairman: Gordon CairnsMembers of Board: Jillian Broadbent, Holly Kramer, Siobhan McKenna, ScottPerkins, Kathee Tesija and Michael Ullmer.The CEO: Brad Banducci (Woolworths Group. 2018).None of the firm governance member is involved in the list of substantial shareholders of thecompany.Key Fundamental RatiosThese ratios are calculated to measure the financial performance of the company. Theyprovides a snapshot of the company financial situation internally and externally. A-CapResource Limited’s performance is measure by the fundamental ratios which are as follows:Short-term solvency ratiosThese ratios are basically the liquidity ratios which attempts to measure Company’s ability tomeet its short term obligations. In other words, they seek to determine the ability of the firmto avoid financial distress in short term period (Bragg, 2012).1.Current ratio: It is a liquidity ratio which tends to determine the capability of acompany to pay its current liabilities with the use of its current assets. The ideal ratiois 2:1.
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