Analysis on Financial Management 2022

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Author’s Note:

FINANCIAL MANAGEMENT1
Table of Contents
Introduction......................................................................................................................................2
Discussion........................................................................................................................................2
Financial Analysis.......................................................................................................................2
Weighted Average Cost of Capital..............................................................................................4
Dividend Policies.........................................................................................................................6
Capital Structure Policies............................................................................................................7
Conclusion.......................................................................................................................................7
References........................................................................................................................................9

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Introduction
The company that has been selected for the purpose of analysis is the Woolworths
Company, which is an Australian Retail Market. The company is said to be one of the largest
company in terms of revenue and is a retail-focused conglomerate company. The financial
analysis has evaluated for the Woolworths Company for a sum of five years from the years 2014-
2018. In order to well analyze the financial performance and the financial analysis of the
company there were several of ratios computed so that on an quantitative assessment tool the
same can be well, interpreted by the investors and the analyst. The weighted average cost of
capital for the company has been well determined with the help of the cost of equity and cost of
debt associated with the company. The policies followed by the company in pursuance to the
capital structure and dividend policies followed by the company were also examined in the due
course of time period.
Discussion
Financial Analysis
The financial analysis has been well done for the Woolworths Company for a sum of five
years of time period whereby relevant changes in the financial part of the company were taken
into consideration.
Market Capitalization: The market capitalization of the Woolworths Company has consistently
fallen over the five-year time period. In order to determine the market cap for the company the
share price and the number of shares outstanding for the company has been well computed in the
time period analyzed (Woolworthsgroup.com.au 2014).

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Price to Earnings Ratio: The price to earnings ratio for the company has been around 17.92
Times in the year 2014 and the same has well increased to around 23.02 times the increase can
be well contributed to the fall in the earnings per share of the company and the fall in the share
price of the company in the five year trend period.
Return on Equity: The return generated by the company on the equity shareholders of the
company has been around 23.36% in the year 2015 and the same has conceptually decreased to
around 15.45% in the year 2018 (Woolworthsgroup.com.au 2016). The fall in the net
profitability of the company was the key reason for the fall in the ROE of the company in the
stated time period analyzed for the company.
Liquidity Aspects: The liquidity aspects of the company has been well analyzed with the help of
the current ratio for the company which was around 0.94 times in the year 2014 and the same has
consistently decreased for the company to around 0.78 times in the year 2018. The company
should be able to well maintain their liquidity aspects by maintaining an adequate amount of
current assets in contrast to the current liabilities of the company, so that the operations of the
company is not materially affected (Woolworthsgroup.com.au 2018).
Long-Term Debt to Total Assets: The long-term debt to total assets for the company has been
around 17.09% in the year 2014 and the same has consistently decreased to around 9.33% in the
year 2018. The decrease in the debt to total asset ratio for the company can be well said that the
company has significantly undertaking reforms and measures for the purpose of reducing the
debt, so that the financial risk of the company gets substantially reduced.
Total Liabilities to Shareholder’s Equity: The ratio has been around 129.98% in the year 2014
and the same has marginally decreased to around 117.14% in the year 2018. The decrease in the