Accounting Practices and Case Studies
Added on 2020-03-28
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COMPARISON OF ACCOUNTING AND FINANCIALSTATEMENT OF DIFFERENT COMPANIES1
Table of ContentsIntroduction......................................................................................................................................3Overviews of Considered Companies.............................................................................................3Metcash........................................................................................................................................3Wesfarmers..................................................................................................................................4Woolworths..................................................................................................................................4Concept and Importance of Accruals and Deferrals in Accounting................................................4Accruals.......................................................................................................................................5Deferrals.......................................................................................................................................5Description of Annual Financial Report of Metcash.......................................................................5Description of Annual Financial Report of Wesfarmers.................................................................7Description of Annual Financial Report of Woolworths...............................................................10Review of Present Conditions of Companies................................................................................13Conclusion.....................................................................................................................................13References......................................................................................................................................152
IntroductionIn the current business world, accounting is considered as one of the most significant operationsthat are involved in the overall progress of any particular company. Hence, it becomes veryimportant for the designated department and authorities of any organization to be very extremelycareful and precise while doing the calculations related to accounting so that the associatedprofit, losses, accruals, deferrals and certain other financial details. The major function of anyaccounting department of any company is to keep a record of the business transactions that havebeen done in any specific way from the company’s side. In the following study, threeorganizations have been considered for the study of financial accounting services and theirfinancial performances have been analyzed deeply in terms of many financial aspects and details.Overviews of Considered CompaniesIn order to complete the following study related to financial accounting, the companies havebeen chosen from online as well as shopping retail business sectors. These companies havesuccessfully established their roots in the Australian Market of online groceries shopping alongwith other popularly used food and beverages. The involvement of these companies in Accrualsand Deferrals has been very active and the business carried out by them has been considered bymany investors and stakeholders for their attractive policies related to accounting. Following arethe details related to the three companies along with work structure.MetcashThe Metcash was founded in May, 1927 in Australia by its founder Joe David at the Surry Hillsof New South Wales. The company started its operations by opening a small Food Store andgradually increased to become a Retail Giant in the retailing as well as wholesale market ofAustralia. This company deals with liquor distribution, supply of fast food like groceries and alsosells hardware. The C-Distribution is mainly included in the operations that involve CampbellsWholesale. This company is about selling of groceries along with Independent Brands in theLiquor Marketers of Australian Continent. The operations of all the subsidies are controlled bythe Company CEO Julie Hutton. The revenue generated by Metcash by the end of Business yearof 2016 was AUD 13.5 billion (Metcash, 2017).3
WesfarmersEstablished in 1941, the Wesfarmers is currently located around many parts of Australia and isheadquartered at Western Australia’s Perth. The Wesfarmers Incorporation has been alwayscounted among the leading business organizations in the Australian continent as it operates inmany sectors of business. This includes Supermarkets, Retail Liquor, Auto Services, GroceryStores and several other business domains. The organization is presently headed by MichaelChaney who is the current chairperson of the company along with Richard Goyder who is theChief Executive Officer of the Firm. The Wesfarmers group earns revenue of about AU$ 67billion every year with over 20,000 workers and management staff working for the company.The company also provides its services in foreign countries like United Kingdom, New Zealand,Bangladesh and Ireland (Wesfarmers.com.au, 2017).WoolworthsThe Woolworths Incorporations is another Australian Retail giant that in involved in supply,processing and distribution of packaged as well as fresh food in the Food markets of Australia.This organization was established in December 1924 and presently operates in many foodmarkets at different locations of Australia apart from operating some wholesale distributionchains. The director of Woolworths is Mr. Brad Banducci and has more than 100,000 employeesthat work with the firm. In the year 2016, the overall turnover of Woolworths was AUD 72billion that was earned from its operations in Australia as well as those located at UnitedKingdom, Africa and New Zealand. The firm has earned a profit of AUD 3.5 billion in the year2016 (Woolworths.com.au, 2017).Concept and Importance of Accruals and Deferrals in AccountingWhenever a company intends to initiate a business, it is not possible for the owners all the timeto take the initiative completely in its own capability. Hence, it becomes quite essential that thecompany owners take some amount of debts and loans from those companies that are alreadywell established so that they can carry out the operations in a better manner (Byzalov and Basu,2016, p.860). In the similar manner, the companies that are performing well and are wellestablished must contribute some efforts and help towards taking the startup forward to that thenew companies can get a strong hold in the market. This is usually done through lending some4
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