Business & operating activities, Finances and Financial Performance of Woolsworth (DOC)
Added on 2020-03-23
12 Pages2597 Words53 Views
Master of Professional Accounting1
ContentsIntroduction......................................................................................................................................3Part A: Company- Introduction, Business & operating activities, Finances and Financial performance.....................................................................................................................................3Brief introduction to the selected company and about its competitor..........................................3Financial Structure of the company.............................................................................................4Director’s Declaration in the annual report..................................................................................5Events are the reporting date........................................................................................................6Change in Accounting Polices.....................................................................................................6Part B: Assets – PPE and Intangibles..............................................................................................7Information regarding the carrying amount of each class of Property, Plant and Equipment.....7Description of the accounting policies relating to property, plant and equipment......................8Intangible assets and their composition.......................................................................................9Accounting policies regarding the Intangible assets..................................................................11Part C: Leases and Voluntary Disclosures.....................................................................................11Values of the leased assets and liabilities..................................................................................11Voluntary disclosures.................................................................................................................12Auditing.....................................................................................................................................12References......................................................................................................................................132
IntroductionFinancial reporting is the most part in the accounting process and there are internationalaccounting standards issued to regulate the process of whole system of financial reporting.Financial reporting means the process of preparation of financial statements and notes toaccounts using the accounting issued by the respective country after giving regards to theinternational accounting standards. In this report, a company listed on the Australian stock exchange has been selected tomake analysis on various aspects. Together with this competitor analysis has also been done toperform comparisons between the selected companies in the same industry. The main companyselected from the list provided is Woolworth and its competitor is Wesfarmers. Both thesecompanies belong to the retail industry of Australia.Part A: Company- Introduction, Business & operating activities, Finances and Financial performanceBrief introduction to the selected company and about its competitorWoolworth is the multinational company that is operating is many nations. In Australia,company mainly operates in supermarket chain and it has more than 1000 stores acrossAustralia. The core business activity of Woolworth includes selling of groceries items such asvegetables, food products, all types of consumer durables and many more. Woolworth isregarded as the biggest super market chain in Australia and it was established in year 1924, inSydney. The rival company of Woolworth in Australia is Wesfarmers and it was first set up inyear 1914 as the Australia farmers’ cooperative and currently it is one of the largest growingcompanies in Australia. The company has its business in few countries like Australia, New3
Zealand, Ireland and United Kingdom (About Wesfarmers, 2017). The Wesfarmers deal insupermarkets, departmental stores, office supplies, home improvement goods and services, safetyproducts, coal production and distribution, chemicals and many others. Headquarter of theWesfarmers was located in Perth, Australia (About Woolworth, 2017). It has been reported thatabout 80 % of the retail industry was under control of Woolworth and rest is enjoyed by itscompetitor. The growing business of Wesfarmers in Australia will provide huge competition tothe Woolworth in future time period. Woolworth and Wesfarmers both operate in retail industry of Australia. Retail industry inAustralia is growing and there is huge scope for the companies to earn good return. The maincompetitors of Woolworth are Wesfarmers, Myer and David Jones. Financial Structure of the companyThere are mainly two sources of finance. They are internal source of finance and externalsource of finance. Internal source of finance means the owner’s own capital has been used tofinance the business and retained earnings are put to use in the business development. Whileexternal sources of finance includes issue of equity shares and taking loan from banks. Generallycompanies use external sources of finance to fund their business. Issue of equity shares was mostcommon source of finance for public listed companies like Woolworth and Wesfarmers. Equitycapital is also regarded as the owner’s capital as shareholder’s become the owner’s of thecompany. After analyzing the capital structure of the Woolworth Group it can be said that in year2016, 5727.6 million dollars of debt and 5347.00 million dollars of equity capital was financedthrough external sources of finance while 3124.5 million dollars is of retained earnings which isregarded as internal sources of finance (Annual Report 2016: Woolworth Group). Wesfarmershas 7410.00 million dollars of debt and 21937.00 million dollars of equity capital was financed4
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