Financial Statement Analysis for Origin Energy and Woodside Petroleum

This report deals with the analysis and evaluation of financial performance of two leading corporations from top 100 ASX listed companies. The names of the companies are: Origin Energy Power Limited and Woodside Petroleum Limited. For the purpose of gauging their financial performance by way of comparative analysis, the selection of companies has been made from a particular industry i.e. energy industry.

Running Head: Financial Statement Analysis
Corporate Accounting

Financial Statement Analysis 2
Executive Summary:
This report deals with the analysis and evaluation of financial performance of two leading
corporations from top 100 ASX listed companies. The names of the companies are: Origin
Energy Power Limited and Woodside Petroleum Limited. For the purpose of gauging their
financial performance by way of comparative analysis, the selection of companies has been
made from a particular industry i.e. energy industry. In order to evaluate the performances of
the both the entities in financial terms, the use of annual report for the latest three financial
years i.e. 2017, 2016 and 2015 have been made. All the financial statements of both the
companies such as income statement, balance sheet and cash flow statement have been
carefully examined and it has been found that Woodside is performing better than Origin
Energy.

Financial Statement Analysis 3

Financial Statement Analysis 4

Financial Statement Analysis 5
Table of Contents
Executive Summary:.............................................................................................................................2
Introduction:..........................................................................................................................................6
Owner’s Equity......................................................................................................................................6
Cash-Flows Statement.........................................................................................................................10
Other comprehensive income..............................................................................................................21
Corporate tax rates...............................................................................................................................22
Conclusion:..........................................................................................................................................26

Financial Statement Analysis 6
Introduction:
The present report is prepared in the light of financial analysis of Origin Energy Power
Limited and Woodside Petroleum Limited. The said corporations fall under the category of
top 100 ASX Listed companies and belong to the energy industry of Australia. Origin Energy
is an energy retailer of Australia and is based in Sydney. It is engaged in the business of
exploration, generation, buying and selling of energy. It has been in existence since 1990.
Origin Energy supplies energy and gas products such as solar systems, batteries, LPG
packages for domestic as well as commercial units (Bloomberg, 2018).
Woodside Petroleum is also engaged in the business of exploration, evaluation, development
of hydrocarbons. The company got incorporated in 1954 with its head office at Perth,
Australia. Woodside produces and supplies oil and gas products across the country. The main
products of the company are Liquefied Petroleum Gases, Natural gas pipelines, LPG gases
and crude oil. Along with these products, the company is also engaged in the business of
provision of processing of LNG, ship chartering and various other types of services. The
operations of the company are undertaken in various countries like Oceania, Asia, Canada
and Africa (Bloomberg, 2018)
Owner’s Equity
Part a
Origin Energy
2017 2016 2015
Share Capital
$
7,150.00
$
7,150.00
$
4,599.00

Financial Statement Analysis 7
Reserves
$
439.00
$
857.00
$
576.00
Retained earnings
$
3,807.00
$
6,032.00
$
7,548.00
Parent Company Interest
$
11,396.00
$
14,039.00
$
12,723.00
Non-controlling interests –
Contact Energy
$
-
$
-
$
1,244.00
Non-controlling interests –
others
$
22.00
$
21.00
$
192.00
Total Equity
$
11,418.00
$
14,060.00
$
14,159.00
Share capital is the important component of firm’s equity. It reflects the quantum of funds
generated by the company through the issues of shares. The company had issued new shares
in 2016 and due to this its share capital account has been increased in 2016 as compared to
2015.
Reserves are the part of profit that is set aside for the specific purpose. These reserves are
utilised during the course of business for the purposes for which they are created. However, a
company also have a general reserve which could be prepared for the general purposes of the
business. In case of Origin Industry, the company has created foreign currency translation
reserve, hedging reserve, available for sale reserve and the share based payment reserve. The
foreign currency translation reserve has been created to account for any gains and losses on
the hedging transactions which have not yet settled. Available for sale reserves are created to
account for the changes in the fair valuation of investments. Foreign currency translation

Financial Statement Analysis 8
reserves are created to record the differences that arise on account of translation of foreign
operation transactions.
There has been loss on foreign currency translation in respect of foreign operations in 2017
due to which the cost reserves have declined. Also there was a loss on the hedging
transactions also and even the value of assets that were available for sale was reduced. All
these transactions and events have contributed to decline in the value reserves in 2017.
Retained earnings are the amounts of profits earned out of business operations and are kept
back in the business only for the use in the forthcoming years for the payment of dividend or
for the further business operations.
Due to the loss in the normal business operations in 2017, the balance of retained earning has
reduced significantly over the last 3 years (Origin Energy, 2017).
Parent company interest reflects the portion of company’s equity that is held by the holding
(parent) company. Parent company is the company which holds more than 50% or maximum
of the shares of the company.
Non-controlling interests are hold by the shareholders who belong to minority segment. They
hold less than 50% of the total shares of the company.
Woodside Petroleum 2017 2016 2015
Issued and fully paid shares
$
6,919.00
$
6,919.00
$
6,547.00
Shares reserved for employee
share plans
-$
35.00
-$
30.00
-$
27.00
Other reserves
$
997.00
$
979.00
$
963.00

Financial Statement Analysis 9
Retained earnings
$
7,169.00
$
6,971.00
$
6,743.00
Parent Company Interest
$
15,050.00
$
14,839.00
$
14,226.00
Non-controlling interest
$
830.00
$
823.00
$
799.00
Total Equity
$
15,880.00
$
15,662.00
$
15,025.00
In 2016, Woodside Petroleum had issued new shares and this has resulted in the increase in
the amount of share capital held by the business.
The share reserved for employee share plans is shown negative because some of the plans
have already been exercised by the company while some of those plans have been lapsed.
The reason of increase in the retained earning account is due to the increase in the
profitability position of the business.
Part b
Debt equity position: Comparative Analysis
Comparative
Analysis Origin Energy
Proportio
n Woodside Petroleum
Proporti
on
Equity
$
11,418.00 45%
$
15,880.00 63%
Debt
$
13,781.00 55%
$
9,521.00 37%

Financial Statement Analysis 10
Capital
Structure
$
25,199.00 100.00%
$
25,401.00 100.00%
The debt and equity component of the financial statements cumulatively forms a capital
structure of the firm. Debt portion reflects the amount of finance that is generated from the
external sources such as loans and borrowing, issue of bonds and debentures. On the other
side, equity portion reflects the amount of funds raised through the internal sources of finance
such as retained earnings, issue of shares etc. Higher the weightage of debt in the capital
structure of a firm, higher are the chances of insolvency. Ideally, a firm can have a debt to
equity ratio of 2:1 (Tracy, 2012).
In the present case of Origin Energy, the debt proportion of debt is higher than that of equity
and hence the financial leverage of the company is higher than Woodside petroleum whose
debt proportion is lower than its equity proportion. The risk of insolvency is higher on Origin
Limited because it is relying more on debt financing for its funding requirements
(Papadopoulos, P. 2011).
The capital structure of Woodside Petroleum is better than that of Origin Energy.
Cash-Flows Statement
Origin Energy
2017 2016 2015
Cash flows from operating
activities
Receipts from customers
$
15,263.00
$
14,040.00
$
15,532.00

Financial Statement Analysis 11
Payments to suppliers
-$
14,027.00
-$
12,688.00
-$
13,590.00
Income taxes paid
$
53.00
$
52.00
-$
109.00
Net operating cash inflows
$
1,289.00
$
1,404.00
$
1,833.00
Cash flows from investing
activities
Acquisition of property, plant and
equipment
-$
354.00
-$
460.00
-$
564.00
Purchases of exploration and
development assets
-$
65.00
-$
112.00
-$
920.00
Purchases of other assets
-$
82.00
-$
119.00
-$
250.00
Acquisition of businesses, net of cash
acquired
Investment in equity accounted
investees
-$
389.00
-$
10.00
Payment received on settling pre-
existing arrangements
Investment in joint ventures
-$
34.00
Loans to equity accounted investees
-$
1,544.00
-$
2,330.00
Repayment of loans to equity

Financial Statement Analysis 12
account investees
Net proceeds from sale of non-
current assets
$
19.00
Interest received from equity
accounted investees
$
218.00
$
338.00
$
165.00
Investment in equity accounted
investees
-$
127.00
Interest received from others
$
1.00
$
1.00
sale of investment in Contact Energy
$
1,599.00
sale of non-current assets
$
887.00
$
118.00
Net investing cash outflows
$
89.00
-$
189.00
-$
3,914.00
Cash flows from financing
activities
Proceeds from borrowings
$
4,017.00
$
9,102.00
$
16,021.00
Repayments of borrowings
-$
4,973.00
-$
11,792.00
-$
12,756.00
Proceeds from share rights issue
$
2,496.00
Interest paid
-$
540.00
-$
611.00
-$
547.00

Financial Statement Analysis 13
Dividends to non-controlling interest
-$
2.00
-$
8.00
-$
248.00
Loan from equity accounted
investees
$
127.00
Dividends paid by parent company
-$
410.00
-$
474.00
Net financing cash outflows
-$
1,371.00
-$
1,223.00
$
1,996.00
Net (decrease) in cash and cash
equivalents
$
7.00
-$
8.00
-$
85.00
Opening Cash and cash equivalents
$
146.00
$
155.00
$
228.00
Impact of exchange rate changes on
cash
-$
2.00
-$
1.00
$
12.00
Closing Cash and cash equivalents
$
151.00
$
146.00
$
155.00
There are various transactions where inflow and outflow of cash takes place. But, generally,
the cash flows are bifurcated in three categories: operating activities, investing activities and
financing activities. Operating activities are those activities which are undertaken as a part of
normal business operations of the business. Investing activities are those activities which
involve application of money in the long term sources for the purpose of making investments.
The sales of such investments and interest earned on such investments are also categorised as
investing activities. Financing activities are those activities which are undertaken to generate

Financial Statement Analysis 14
large sums of funds for the business. It also involves repayment of such funds and also the
dividend paid and received on the shares.
In case of Origin Limited, there has been decrease in the cash inflow from operating activities
over the last three years. Mainly three activities have been undertaken in the last 3 years as a
part of operating the business. These activities are: cash collections made from the customers
(inflow of cash) and the payment made to suppliers and government by way of taxes (outflow
of cash).
As a part of investing activities, the company has purchased various long term assets for its
business in the last 3 years. Also, it has made various investments such as equity investees,
joint venture (outflow of cash). The interest income received on these investments was the
inflow for the company. Further Origin Energy had disposed of various assets of the business
and this has resulted in cash inflow for the company. In 2017, the company has earned cash
inflows.
The financing activities of Origin Energy have resulted in net cash inflow of $ 16021 by way
of loans from bank and financial institutions. Along with that inflow of cash has been resulted
from the issue of right shares. The payment of dividend, interest and loan repayment has
resulted in the cash out flow of the business.
The cash and cash equivalent are those items which are held by the company in the form of
cash or any other assets which can easily be converted into cash.
Woodside Petroleum:
WOODSIDE PETROLEUM
$
2,017.00
$
2,016.00
$
2,015.00

Financial Statement Analysis 15
Cash flows from operating activities
Profit after tax for the year
$
1,120.00
$
973.00
$
113.00
Non-cash items
Depreciation and amortisation
$
1,204.00
$
1,346.00
$
1,539.00
Impairment of oil and gas properties
$
1,083.00
Gain on disposal of oil and gas
properties
-$
23.00
-$
3.00
$
2.00
Loss on disposal of investment
$
14.00
Change in fair value of derivative
financial instruments
-$
1.00
$
5.00
$
1.00
Net finance costs
$
84.00
$
48.00
$
85.00
Tax expense
$
446.00
$
367.00
$
243.00
Exploration and evaluation written of
$
58.00
$
54.00
$
131.00
Other
$
28.00
$
45.00
-$
28.00

Financial Statement Analysis 16
Changes in assets and liabilities
Decrease in trade and other receivables
$
7.00
$
21.00
-$
28.00
(Increase)/decrease in inventories
-$
25.00
$
45.00
$
67.00
(Decrease)/increase in provisions
-$
75.00
$
16.00
$
79.00
Increase in other assets and liabilities
-$
4.00
-$
7.00
-$
30.00
Increase/(decrease) in trade and other
payables
$
37.00
-$
81.00
$
55.00
Cash generated from operations
$
2,879.00
$
2,809.00
$
3,323.00
Purchases of shares and payments
relating to employee share plans
-$
47.00
-$
54.00
-$
45.00
Interest received
$
10.00
$
8.00
$
5.00
Dividends received
$
6.00
$
7.00
$
8.00
Borrowing costs relating to operating
activities
-$
21.00
-$
119.00
Income tax paid
-$
411.00
-$
172.00
-$
768.00
PRRT received/paid
$
6.00
$
14.00
-$
10.00

Financial Statement Analysis 17
Payments for restoration
-$
22.00
-$
25.00
-$
16.00
Payments for carbon tax
-$
2.00
Net cash from operating activities
$
2,400.00
$
2,587.00
$
2,376.00
Cash flows used in investing activities
Payments for capital and exploration
expenditure
-$
1,390.00
-$
1,608.00
-$
1,819.00
Borrowing costs relating to investing
activities
-$
178.00
-$
153.00
Payments for disposal of oil and gas
properties
-$
14.00
Payments for acquisition of joint
arrangements net of cash acquired
-$
698.00
-$
3,637.00
Net cash used in investing activities
-$
1,568.00
-$
2,473.00
-$
5,456.00
Cash flows (used in)/from financing
activities
Proceeds from borrowings
$
2,220.00
$
2,673.00
$
1,834.00
Repayments of borrowings
-$
2,133.00
-$
2,128.00

Financial Statement Analysis 18
Borrowing costs relating to financing
activities
-$
15.00
-$
18.00
Contributions to non-controlling
interests
-$
51.00
-$
193.00
-$
162.00
Proceeds from underwriters of Dividend
Reinvestment Plan (DRP)
$
277.00
Dividends paid (net of DRP)
-$
274.00
Dividends paid outside of DRP
-$
826.00
-$
286.00
Dividend Paid
-$
1,730.00
Net cash (used in)/from financing
activities
-$
805.00
$
51.00
-$
58.00
Net (decrease) in cash and cash
equivalents
$
27.00
$
165.00
-$
3,138.00
Opening Cash and cash equivalents
$
285.00
$
122.00
$
3,268.00
Impact of exchange rate changes on cash
$
6.00
-$
2.00
-$
8.00
Closing Cash and cash equivalents
$
318.00
$
285.00
$
122.00
The cash flow statement of Woodside premium is prepared using the indirect approach where
non-cash and non-operating items are adjusted back to the net profit earned during the given

Financial Statement Analysis 19
year. Depreciation is a non-cash item because it does not involve any flow of cash in and out
of the business and hence it is added back to the net profit while preparing cash flow
statement. Similarly, the impairment is also a non-cash item and is determined for the
difference in the recoverable value and carrying value of the asset. Since impairment involves
no cash movement and is already debited to the profit and loss account it is added back to the
profit to determine actual cash flows. Further, the increase in current liabilities and decrease
in current assets results in cash flows and hence it is added to the net profit to reach at the
operating profits. Further, decrease in current liabilities and increase in current assets results
in cash outflow and hence it is deducted from the cash flow statement of Woodside
Petroleum. Payment of any type of tax is the operating activity only which results in cash
outflow. Further, while determining the net profits, the dividend income is also reduced as it
is not the part of operating activities. The investing activities of Woodside Petroleum include
interest expense payment and payment for the disposal of oil and gas properties, payments
made to acquire the joint arrangements. All these activities include cash payments but in any
of the three years no investing activity was undertaken which could have resulted in cash
inflow for the business. Financing activities related to Woodside fuel covered dividend
payment, repayment of borrowings as the cash outflow transactions. But collection of cash
from underwriters and proceed from loans are the cash inflows for the business of the
company.
Part 2
Comparative analysis for all the 3 years:
2017 2016 2015

Financial Statement Analysis 20
ORIGIN
ENERGY
Net operating
cash inflows $ 1,289.00
$
1,404.00
$
1,833.00
ORIGIN
ENERGY
Net investing
cash outflows $ 89.00
-$
189.00
-$
3,914.00
ORIGIN
ENERGY
Net financing
cash outflows -$ 1,371.00
-$
1,223.00
$
1,996.00
2017 2016 2015
WOODSIDE
PETROLEUM
Net operating
cash inflows $ 2,400.00
$
2,587.00
$
2,376.00
WOODSIDE
PETROLEUM
Net investing
cash outflows -$ 1,568.00
-$
2,473.00
-$
5,456.00
WOODSIDE
PETROLEUM
Net financing
cash outflows -$ 805.00
$
51.00
-$
58.00
Origin Energy
 In terms of basic business operations, Origin performed best in 2015 and least in
2017.
 In terms of investment decisions, Origin performed best in 2017 and worst in 2015.
 In terms of financial decisions Origin performed best in 2015 but worst in 2016.
Woodside Petroleum:
In terms of basic operations, the performance of Woodside was best in 2016 as it generated
highest cash inflows in 2016.

Financial Statement Analysis 21
In the areas of investments, the company has performed worst in 2015 as high volume cash
has flew out of the business in this year.
In the areas of financial decisions, 2016 was the best year as company could generate few
cash inflows after recovering the cash outflows of the business that took place in that year.
Comparative analysis of Origin Energy and Woodside Petroleum
2017 2016 2015
ORIGIN
ENERGY
Net operating
cash inflows $ 1,289.00 $ 1,404.00 $ 1,833.00
WOODSIDE
PETROLEUM
Net operating
cash inflows $ 2,400.00 $ 2,587.00 $ 2,376.00
ORIGIN
ENERGY
Net investing
cash outflows $ 89.00 -$ 189.00 -$ 3,914.00
WOODSIDE
PETROLEUM
Net investing
cash outflows -$ 1,568.00 -$ 2,473.00 -$ 5,456.00
ORIGIN
ENERGY
Net financing
cash outflows -$ 1,371.00 -$ 1,223.00 $ 1,996.00
WOODSIDE
PETROLEUM
Net financing
cash outflows -$ 805.00 $ 51.00
-$
58.00
From the angle of operating performance Woodside petroleum is performing better than
Origin Energy because it was able to generate more cash inflows from the operating activities
of the business in all the three financial years.

Financial Statement Analysis 22
From the perspective of investing activities, Origin Energy is performing better than
Woodside Petroleum in all the three financial years because in 2017. Origin has managed its
investments decisions in such a way that it has resulted in the net cash inflow whereas,
Woodside petroleum failed to cover its cash outflows from the cash inflows. Moreover, the
quantum of cash outflow in 2015 and 2016 is more in case of Woodside Petroleum as
compared to Origin Industry.
From the financial perspective, again Woodside petroleum is performing better than the
Origin industry as it has taken sound financial decisions in the areas of raising and repaying
the borrowed funds. The net cash outflows in case of Woodside premium are lesser than that
of Origin Industry in 2017. But in 2015, Origin energy had performed better than Woodside
(Origin Industry, 2015).
Other comprehensive income
Part vi
Origin Energy
Items not to be reclassified to profit or loss
Actuarial gain/(loss) on defined benefit plans
$
1.00
Items to be reclassified
Foreign currency translation differences
-$
200.00
Valuation gain/loss
-$
41.00

Financial Statement Analysis 23
Fair value changes of net investment hedges
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges reclassified to profit or
loss
-$
202.00
Tax on items to be reclassified to profit or loss
Total value of Items to be recycled to profit or loss in further
periods
-$
443.00
Total Comprehensive Income
-$
442.00
Woodside Petroleum
Items not to be recycled to profit or loss
Actuarial gain/(loss) on defined benefit plans
$
4.00
Tax on items not to be reclassified to profit or loss
Total value of Items not to be recycled to profit or loss in further
periods
Items to be reclassified
Foreign currency translation differences
Valuation gain/loss
Fair value changes of net investment hedges
Effective portion of changes in fair value of cash flow hedges
Net change in fair value of cash flow hedges reclassified to profit or
loss
-$
2.00
Tax on items to be reclassified to profit or loss $

Financial Statement Analysis 24
8.00
Total value of Items to be recycled to profit or loss in further
periods
$
6.00
Total Comprehensive Income
$
10.00
Part vii
The above items have not been reported in income statements of both the companies because
these earnings or losses are not on account of normal business activities. Rather, such profits
and losses are taken place due to the non-business activities. These incomes and expenses
have not yet realised in the business. Hence, they are excluded from the income statement
and are shown below the income statement. Both GAAP (generally accepted accounting
principles) and taxation rules do not allow the inclusion of these incomes and expenses in the
income statement.
Part viii
Comparative analysis
Items not to be reclassified to profit or
loss Origin Energy
Woodside
Petroleum
Actuarial gain/(loss) on defined benefit
plans
$
1.00
$
4.00
Items to be reclassified
Foreign currency translation differences
-$
200.00

Financial Statement Analysis 25
Valuation gain/loss
-$
41.00
Fair value changes of net investment hedges
Effective portion of changes in fair value of
cash flow hedges
Net change in fair value of cash flow
hedges reclassified to profit or loss
-$
202.00
-$
2.00
Tax on items to be reclassified to profit or
loss
$
8.00
Total value of Items to be recycled to
profit or loss in further periods
-$
443.00
$
6.00
Total comprehensive income/loss
-$
442.00
$
10.00
If these items were included in the income statement, the profits attributable to shareholders
would not be affected as they gains or losses are not yet realised and neither does they are
generated from the core business activities.
Part ix
Yes, managers must give due consideration to the other comprehensive income while
evaluating the performance of the company as it gives holistic view of company’s operations
as well as other activities which form integral component of its overall economics. It can help
the managers to determine more accurate fair value of the investments held by it. Also, it
provides insights about the foreign transactions.

Financial Statement Analysis 26
Corporate tax rates
Part x
Origin Energy Woodside Petroleum
Tax Expense/Benefit $ 26.00 -$ 569.00
Part xi
Origin Energy Woodside Petroleum
Tax Expense/Benefit $ 26.00 -$ 569.00
Profit before tax -$ 2076.00 $ 1,566.00
Effective Tax Rate -1.25% 36.33%
Woodside Petroleum has a higher tax rate.
Part xii
Deferred tax assets are created to adjust the temporary difference between the tax on the book
profits and tax on the returned income (Guenther & Sansing, 2000). When excessive taxes
had paid in the last periods taking into account the tax profits, then the differential amount
must be treated as DTA. However, when low taxes are paid taking into account the taxation
provisions, then the differential amount must be treated as deferred tax liability (Laux, 2013).
Origin industry:

Financial Statement Analysis 27
In case of Origin Energy, the DTA is created because of tax paid under Petroleum Resource
Rent Tax rules as it is taken into account while preparations of financial statements as per
AASB 112. The rate of tax is measured on the basis of provisions of income tax. As the
forecast in the respect of this tax indicates no requirement of utilisation of PPRT and hence
no DTA has been created in this respect and also DTL in respect of investment in Australia
Pacific is not created as the company is unable to control the timing of reversal of any
temporary difference in this respect. For other temporary differences in respect of assets and
liabilities such as financial instruments, accrued expenses, employees benefits, Petroleum
Resource Rent Tax, Acquired environmental scheme certificate purchase obligations, DTAs
and DTLs are created.
Woodside petroleum:
In the annual report of Woodside Petroleum, both deferred tax assets and deferred tax
liabilities have been shown separately in 2017. DTAs and DTLs are not offset in the
situations where there are no legal enforceable rights available for such offsetting and when
the both corresponds to different taxation rules provided by different authorities. A DTA has
been recorded in respect of foreign taxes losses for US $ 403 million in 2017 in case of
Woodside Petroleum. The balance of DTA in 2016 was $ 407 million which corresponds to
the unused foreign tax losses. Since DTAs and DTLs are not created on the same taxation
grounds, they are not offset in the financial statements. Rather both the items are shown
separately (Woodside, 2017).
xiii
There is a decrease in the balance of deferred tax asset in 2017 as compared to 2016 in case
of Origin Energy.

Financial Statement Analysis 28
Origin Energy
$
2,017.00
$
2,016.00 Decrease
DTA
$
32.00
$
92.00
-$
60.00
There is an increase in the deferred tax assets and deferred tax liabilities of Woodside
petroleum from 2016 to 2017.
Woodside
Petroleum
$
2,017.00
$
2,016.00 Increase
DTA
$
1,125.00
$
965.00
$
160.00
DTL
$
1,798.00
$
1,578.00
$
220.00
Woodside
Petroleum
$
2,017.00
$
2,016.00 Increase
DTA
$
1,125.00
$
965.00
$
160.00
DTL
$
1,798.00
$
1,578.00
$
220.00
Part xiv
Cash Tax Calculation Origin Energy
Woodside
Petroleum

Financial Statement Analysis 29
Book Tax
$
26.00 $ 446.00
Less: Increase in DTA $ 160.00
Add: Increase in DTL/ Decrease in
DTA
$
57.00 $ 220.00
Current income taxes
$
83.00 $ 506.00
Add: Tax Shield on Finance Cost
$
98.70 $ 25.20
Unlevered Cash Taxes
$
181.70 $ 531.20
Part xv
Cash Tax Rate Calculation Origin Energy Woodside Petroleum
Unlevered Cash Taxes
$
181.70 $ 531.20
EBITA -$ 2,075.00 $ 1,650.00
Cash Tax Rate -8.76% 32%
Part xvi
The determination of cash tax amount and book tax amount involves two different concepts.
Cash tax is calculated as per all the taxation provisions applicable to the entity whereas book
tax is calculated as per the book profits of the company. Book profits are determined as per

Financial Statement Analysis 30
the GAAP rules and taxable income is calculated as per the income tax rules (Guenther &
Sansing, 2000).
Conclusion:
From the above analysis, it can be said that Woodside Petroleum is performing better than
Origin Energy from various aspects such as: profitability, solvency and cash management
efficiency since the last three financial years and hence it has better future prospects as
compared to Origin Energy.

Financial Statement Analysis 31
References:
Origin Energy. 2015. Annual Report: 2015. Available at:
http://www.annualreports.com/HostedData/AnnualReportArchive/O/ASX_ORG_2015.pdf
Accessed on: 30.09.2018
Origin Energy. 2017. Annual Report: 2017. Available at:
https://www.originenergy.com.au/content/dam/origin/about/investors-media/annual
%20review%202017/AnnualReport_FY2017.pdf Accessed on: 30.09.2018
Whitehaven Coal. 2017. Annual Report: 2017. Available at:
http://www.whitehavencoal.com.au/wp-content/uploads/2017/09/WVN_223766_Annual-
Report-2017_FA4-web.pdf Accessed on: 30.09.2018
Woodside Petroleum. 2015. Annual Report: 2015. Available at:
http://www.woodside.com.au/Investors-Media/announcements/Documents/
17.02.2016%202015%20Annual%20Report.PDF Accessed on: 30.09.2018.
Bloomberg, 2018. Company Overview of Woodside Petroleum Ltd. Available at:
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=873963
Accessed on: 30.09.2018
Bloomberg, 2018. Company Overview of Origin Energy. Available at:
https://www.bloomberg.com/research/stocks/private/snapshot.asp?privcapId=6439876
Accessed on: 30.09.2018
Tracy, A. 2012. Ratio Analysis Fundamentals: How 17 Financial Ratios Can Allow You to
Analyse Any Business on the Planet. RatioAnalysis.net.

Financial Statement Analysis 32
Papadopoulos, P. 2011. Investment Report - Fundamental Analysis/ Ratio Analysis. GRIN
Verlag.
Guenther, D.A. and Sansing, R.C., 2000. Valuation of the firm in the presence of temporary
book-tax differences: The role of deferred tax assets and liabilities. The Accounting
Review, 75(1), pp.1-12.
Laux, R.C., 2013. The association between deferred tax assets and liabilities and future tax
payments. The Accounting Review, 88(4), pp.1357-1383.