Analysis of Financial Results of Different Divisions of Wesfarmers Limited

Running head: ACCOUNTING: CONCEPTS AND PRINCIPLES
Accounting: Concepts and Principles
University Name
Student Name
Authors’ Note

2
ACCOUNTING: CONCEPTS AND PRINCIPLES
Answer to Question 1:
Analysis of financial results of each of the retail businesses
The financial outcomes of different divisions of retail business of the firm Wesfarmers
Limited are hereby presented below:
Comparison of revenue of different divisions
The revenue acquired from the Coles division is $39217 million in 2017, while the same was
registered to be $39242 million in the financial year 2016. Thus, revenue is said to have
decreased insignificantly by 0.063% during the year 2017. Revenue earned from Home
Improvement is documented to be $13506 million in the year 2017 while the same was
recorded to be $11571 million in 2016. Thus, it can be hereby mentioned that the revenue in
this division of the company declined sharply by around 16.722% in the financial year 2017.
However, the revenue earned from the business division “Department Stores” is recorded to
be $8528 million in the financial year 2017 while the same was observed to be $8646 million
in the financial year 2016, reflecting 1.36% decrease in revenue generation. Again, the
revenue generated from the division of “Office Works” is observed to be $1964 million in the
financial year 2017, while the same is registered to be $1861 million in the year 2016,
replicating 4.56% enhancement as compared to the figure of the previous period.
Furthermore, it can be hereby mentioned that revenue generated from divisions of
“Industrials” can be regarded to be $ 5161 million in the financial year 2017 and $ 4672
million in the financial year 2016. The revenue generated from this segment has increased
significantly by around 10.46% in the current year. As regards revenue, it can be hereby
mentioned that the division “Home Improvement” of the firm Wesfarmers Limited has the
highest amount revenue registered during the financial year 2017 (Edmonds et al., 2016).

3
ACCOUNTING: CONCEPTS AND PRINCIPLES
Comparison of earnings before interest and tax of different divisions
The earnings before interest and tax (EBIT) is registered to be $1609 million in the financial
year 2017 in the segment Coles while the same was recorded to be $1860 million in the
financial year 2016. In essence, revenue is said to have decreased by approximately 13.49%
in the segment of Coles of the firm Wesfarmers, replicating unfavourable financial feature of
the company in this section (Warren & Jones, 2018). Again, the EBIT in the division of
“Home Improvement” is said to be recorded to be $1245 million in the financial year 2017,
while the same was recorded to be $ 1214 million in the financial year 2016, reflecting 2.55%
enhancement in this specific division. Report on divisional performance of the firm shows
that EBIT for “Department Stores” is registered to be $543 million in financial year 2017 in
comparison to the figure $275 million registered during the period 2016, representing 97.5%
augmentation in this regard. Announcement on divisional performance of “Office works”
presents the fact that EBIT is registered to be $144 million in the financial year 2017 in
comparison to the figure of $134 million registered in the year ago period. This represents
7.46% increase in this segment reflecting favourable financial performance of the firm in this
specific division. Again, a sharp increase in EBIT can be observed in the segment of
“Industrials”. Essentially, the EBIT was registered to be $915 million in the year 2017, whilst
the same was recorded to be $47 million in the year 2016. This represents an extensive
improvement in earnings figure of the firm, replicating favourable financial condition in this
specific segment of the corporation Wesfarmers Limited. As regards EBIT, Coles is said to
have the highest EBIT among all the other divisions (Bhopal, 2016).