Financial Analysis Report Management

Financial Analysis

FINANCIAL ANALYSIS 1
Contents
Introduction......................................................................................................................................2
Overview of the company................................................................................................................2
Financial Analysis...........................................................................................................................3
Ratio Analysis..............................................................................................................................3
Vertical Analysis..........................................................................................................................9
Horizontal Analysis....................................................................................................................12
Recommendations..........................................................................................................................14
Conclusion.....................................................................................................................................15
References......................................................................................................................................16

FINANCIAL ANALYSIS 2
Introduction
Financial analysis is the procedure of evaluating, summarizing and measuring the
financial position of the organization. It is required for the company to examine the financial
situation to operate the business successful. There are several tools that an organization uses to
evaluate the financial performance such as Horizontal Analysis, Vertical Analysis, Ratio
Analysis and the other tools. These tools or methods summarize the financial situation of the
organization as it can adopt the strategies to attain success (Robinson, 2020). In this report, the
main discussion is based on topic of “financial analysis”. Woolworths has been taken into
consideration to evaluate its financial performance. In this paper, two years of annual report of
the company has been examined such as 2018 and 2019 in order to study its current financial
status.
Overview of the company
Woolworths is an Australian company that operates the business in consumer goods
industry. It is a supermarket chain that offers the wide range of services such as household
goods, beauty products, pet food and the others. It was established in the year 1924. It is one of
the Australian leading companies that operate the business with the high brand value and in
terms of high revenue. Wesfarmers is the top competitor of the company as it is also offers the
supermarket services. (Woolworths Group, 2018).
Wesfarmers Limited is an Australian Conglomerate which headquarters is in Western Australia,
Perth. It operates the business in New Zealand and Australia. It offers the services such as
chemicals, fertilizers, coal mining, industrial and safety product.

FINANCIAL ANALYSIS 3
Financial Analysis
Ratio Analysis
Ratio's
Wesfar
mers
Wesfar
mers
Woolwo
rths
Woolwo
rths
AUD in Million 2018 2019 2018 2019
Profitability Ratio
(Net) Profit margin
(a/b) Net Profit 1197 5510 1724 2693
Net Sales 66594 27818 56726 59984
2% 20% 3% 4%
Gross Profit Margin Gross Profit
20876.0
0
10578.0
0
16470.0
0 17442
Net Sales
66594.0
0
27818.0
0
56726.0
0
59984.0
0
31% 38% 29% 29%
Return on Assets Net income 1197 5510 1724 2693
Total assets 36933 18333 23558 23491
3% 30% 7% 11%