Analysis of Woolworths Group Limited

INTRODUCTION
Woolworths group limited formerly known as Woolworths limited is a company based in Australia
and the principal activity of the company is engagement in retail operations. The Woolworths group
limited principal segment area include Australian Food and Petrol, Supermarkets in New Zealand,
Endeavour Drinks Group, BIGW and Hotels. The segment of Australian Food and Petrol is engaged is
mainly engaged in procuring food and petroleum products for reselling purpose for the people of
Australia. The Segment Supermarket in New Zealand is mainly engaged in procuring food and liquor
products for reselling purpose for the people of Australia. The Segment Drink is involved in procuring
liquor and to resell the same. The BIGW Segment is engaged in procuring discounted product. The
Segment hotel is engaged in providing hospitality services. (Reuters.com 2019)
Analysis
Profit and Loss Items
The total revenue of Woolworths group limited is increased from AUD 5,50,34,000 to 5,69,65,000,
increament by AUD 19,31,000 and a percentage change of 3.51%. The revenue of the company has
been increased due to growth in all segment division. The percentage increase in few segments of
Woolworths by 9.9 percent to $1.4 billion and also an 11.1 percent increase in an Australian food
earnings to $901 million which offset the loss of BIGW.
There is also increase in income tax expenses for the financial year 2018 by 10.29% with a figure of
AUD 67,000. The increase in income tax expenses is due to the increase in operating income of the
company and earning before interest and tax.
Balance sheet Items
The Cash and cash equivalents of the company for the financial year 2018 has been increased by 40
percent over the year by AUD 3,64,000 which indicates that the company has liquid cash in hand to
meet the uncertain financial obligations. But according to the analysis of the ratio the company
liquidity ratio and current ratio is not sound enough as it stands at 0.78 and 0.32 in the financial year
2018 which is not good enough to meet the obligation but the profitability of the company is sound
enough in comparison to previous year 2017,as the gross profit of the entity is increased by 5.0%
and this is a very strong parameter for the company.
There is also a decrease in other current assets and other current liability of the company by 31%
and 30 % respectively. The company also has generated a short-term debt of AUD 5,00,000 with
comparison to previous year as nil.
The Woolworths has a strong parameter in the following ratios like return on equity as the
shareholders are benefitted due to good return on equity to the shareholders of the company, gross
profit of the company stands at 29% which is also a strong parameter and Cash Return on Owners
equity as computed for the financial year 2018 stands at 29%.