Finance For Business And Capital Structure Ratio

Running head: FINANCE FOR BUSINESS
Finance for Business
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FINANCE FOR BUSINESS1
Table of Contents
Introduction......................................................................................................................................2
Discussion and Analysis..................................................................................................................2
Woolworth Company Operations................................................................................................2
Net Working Capital....................................................................................................................3
Cost of Equity..............................................................................................................................4
Liquidity and Capital Structure Ratio..........................................................................................5
Liquidity Ratios.......................................................................................................................6
Capital Structure Ratio............................................................................................................7
Conclusion and Recommendations..................................................................................................9
References......................................................................................................................................11

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Introduction
The financial analysis has been done for the Woolworths Company whereby the business
operations and business activities that are in particular carried out by the firm has been well
discussed. Important aspects of the firm in respect to the business activities and business
operations have been well carried out by the firm for the purpose of a detailed analysis of the
Woolworths Firm. The analysis has been done for the firm by taking the financial data for the
year 2018 and 2019 whereby relevant changes in the financial position of the firm have been
well taken into consideration. Changes observed in the field of liquidity position maintained and
the working capital firm has for carrying on the business operations were some of the crucial
aspects that were analyzed. The capital structure of the firm has also been analyzed based on the
various sources of financing the firm has applied for funding the operations of the firm. The cost
of equity on the other hand, has been well calculated using the dividend growth model which
well allows us to calculate the required rate of return that is desired by the equity shareholders of
the firm for the level of risk taken. All the important aspects that have been in associated with
each of the formulas that have been well applied in determining the cost of equity, liquidity and
capital structure of the firm.
Discussion and Analysis
Woolworth Firm Operations
The Woolworth Firm is a major Australian Firm that is having an extensive retail interest
whereby the firm has its operations primarily in the Australian and New Zealand Area. The firm
is considered as second largest firm when compared in terms of revenue earned or reported by

FINANCE FOR BUSINESS3
the firm for the trend period analyzed. The Woolworths Firm stands as the largest liquor
takeaway retail companies and the largest gaming poker machine and the largest operator of
hotel chains in the Australian region. The firm is listed in the Australia Stock Exchange with its
ticker symbol as WOW and was founded and established in the year 22nd September 1924. The
key areas in which the firm operates is the Australian and New Zealand Area and the total
number of employees that are directly associated with the firm has been around 205,000. The
key divisions of the firm are primarily are as follows:
 Supermarkets (Woolworths and Countdown)
 Liquor (BWS, Dan Murphy's, Langtons, Cellarmasters)
 General Merchandise (Big W)
 Finance (Woolworths Finance and Woolworths Rewards)
 Hotels & Gambling (ALH Group)
The operations of the firm are primarily focused in the Australian and New Zealand area
whereby the firm has its majority of the operations expanded and based for carrying on their
daily business activities. The increasing revenue base for the firm has been primarily due to the
increased amount of goods and services that the firm offers.
Net Working Capital
The net working capital of the firm has been well calculated with the help of the current
asset and current liabilities that has been well reported by the firm for the stated point of time
period (Jahfer and Madurasinghe 2017). The working capital of the Woolworths Firm has been
well calculated with the help of the current assets and current liabilities that has been well
reported by the firm. The working capital that has been well reported for the firm has been
around -2,015,000,000 in the year 2018 and the same has well decreased to around -