CHANGES IN ITEMS OF CASH FLOW STATEMENTS REPORTED IN COMPREHENSIVE INCOME STATEMENT
Added on 2021-05-31
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WOOLWORTHS COMPANYCorporate AccountingFinancial Statement AnalysisName of Author
Table of ContentsINTRODUCTION......................................................................................................................1ANSWER TO QUESTION NO- (i)...........................................................................................1CHANGES IN ITEMS OF CASH FLOW STATEMENT........................................................1ANSWER TO QUESTION NO- (ii)..........................................................................................1COMPARATIVE ANALYSIS OF THREE BROAD CATEGORIES OF CASH FLOWSTATEMENT............................................................................................................................1ANSWER TO QUESTION NO- (iii)........................................................................................2ITEMS REPORTED IN COMPREHENSIVE INCOME STATEMENT.................................2ANSWER TO QUESTION NO- (iv).........................................................................................2EXPLAINATION OF ITEMS RECORDED IN OTHER COMPREHENSIVE INCOMESTATEMENT............................................................................................................................2ANSWER TO QUESTION NO- (v)..........................................................................................3WHY OTHER COMPREHENSIVE INCOME IS NOT SHOWN IN STATEMENT OFPROFIT AND LOSS?................................................................................................................3ANSWER TO QUESTION NO- (vi).........................................................................................3TAX EXPENSE IN THE LATEST FINANCIAL STATEMENTS..........................................3ANSWER TO QUESTION NO- (vii)........................................................................................3IS THE TAX EXPENSE EQUAL TO THE TAX RATE MULTIPLIED BY ACCOUNTINGINCOME?..................................................................................................................................3ANSWER TO QUESTION NO- (viii)......................................................................................3DEFERRED TAX ASSET/LIABILTY RECORDED IN BALANCE SHEET........................3ANSWER TO QUESTION NO- (ix).........................................................................................4
ANSWER TO QUESTION NO- (x)..........................................................................................4ANSWER TO QUESTION NO- (xi).........................................................................................4INTERESTING..........................................................................................................................4CONFUSING.............................................................................................................................4DIFFICULT...............................................................................................................................4
INTRODUCTIONWith increase in competition, any business concern has to improve its ownperformance over years to sustain it with the other competitive businesses. The current reportis based on an Australian company, Woolworths. It has an extensive retail chain throughoutAustralia and New Zealand. In this report, different kinds of analysis like on cash flowstatement, balance sheet items, other comprehensive incomes etc. are done and summarisedbelow. The analysis result shown below is based on the annual report of the company drawnfrom company’s website. The implications of the international financial reporting standardsare also pinpointed as and when required (Chytis, Koumanakos, and Goumas, 2015).ANSWER TO QUESTION NO- (i)CHANGES IN ITEMS OF CASH FLOW STATEMENTCash flow statement represents the cash position of the company. All the transactionsdone in cash are represented, irrespective of their year of belonging, if the payment or receiptis done in that particular financial year. It also highpoints the effect of non-cash items likedepreciation. The debt issuance is AUD 184.1 million in financial year 2017 as compared toAUD 628.5 million in financial year 2016. The overall cash used in financial activities hasincreased in financial year 2017 over 2016 mainly because of repayments of debts of AUD1406.5 million which is too high as compared to the repayment of AUD 994.1 million in2016. Another reason stands to be less debt raised in year 2017. The cash provided byoperating activities is higher in 2107 when compared to 2016; reason being less income taxpaid and lesser interest paid. The cash used in investing activities is AUD 1431.4 million in2017 as compared to AUD 1266.7 million in 2016. There are fewer proceeds from sale ofproperty in year 2017 over 2016, AUD 279.8 million and AUD 722 million respectively(Phillips, Pincus, and Rego, 2013).The dividends paid had been AUD 1184.8 million in 2016, whereas AUD 540.9million in 2017. The net decrease in cash and cash equivalents show drastic variation overthese two years. Its just AUD 38.7 million in 2017, while year 2016 shows a decrease ofAUD 384.1 million, i.e. over 10 times (Wang, Butterfield, and Campbell, 2016).
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