Portfolio Management and Investment Analysis of Woolworths and Coles Group Limited

Running head: INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
Investment Analysis and Portfolio Management
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1INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
Executive Summary:
The report conducts financial performance on Woolworths and Coles Group Limited for the
past 5-year data. The report uses financial ratios such as leverage, liquidity, profitability, cash
flow and asset utilization has been used for calculating the financial performance and
determining the trend. In addition, further analysis states that the performance of Woolworths
in more appropriate in comparison to Coles limited on asset efficiency and cash flow ratios.
However, the performance of Cole’s group is higher in Leverage ratio, liquidity ratio and
profitability ratios. Thus, the analysis states that the performance of Coles in higher in
comparison to Woolworths.

2INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
Table of Contents
Introduction:...............................................................................................................................3
Identification of the issues:........................................................................................................3
Financial analysis: (Comparative analysis of each firm’s financial performance)....................4
Leverage ratio:.......................................................................................................................4
Asset utilization:.....................................................................................................................5
Liquidity:................................................................................................................................7
Profitability:...........................................................................................................................8
Cash flow:..............................................................................................................................9
Recommendation:....................................................................................................................11
Conclusions:.............................................................................................................................12
References and Bibliography:..................................................................................................13

3INVESTMENT ANALYSIS AND PORTFOLIO MANAGEMENT
Introduction:
The assessment mainly analyse the financial performance of Woolworths and Coles
Group Limited for the past 5-year data. This information would eventually help in
determining the current capability of the organisation to achieve targeted benefits and become
the industry leader in Australia. The financial ratios such as leverage, liquidity, profitability,
cash flow and asset utilization has been used for calculating the financial performance and
determining the trend in its overall performance. In addition, appropriate discussion has been
made on the current attributes of the both the organisation and the relevant analysis that needs
to be conducted for understanding its performance.
Identification of the issues:
The main problems in hand are to detect, which organisation among Woolworths and
Coles Group has the highest performance level as per the financial ratios. In addition, the
financial ratios such as leverage, liquidity, profitability, cash flow and asset utilization is
mainly used for understanding the condition of both the companies, while detecting the best
performer. Moreover, the retail sector analysis mainly provides information regarding the
duopoly, which is present within the industry, as both Coles and Woolworths mainly account
for nearly 80% of the total retail sector of Australia.
Woolworth is considered to be one of the largest super market brands in Australia,
whose operations are spread all over the country. The company was founded during 1924,
where the management had made calculating decisions to improve their performance and
support the company growth in the Australian market. Further analysis portrays that the
operations of Woolworths focuses on groceries, while other operations are also supported by
the company, which are household products, selling magazines, DVDs, health products, pet
supplies, baby supplies, beauty products, and stationery (Woolworthsgroup.com.au, 2020).