Wesfarmers Limited Financial Analysis

This assignment requires a detailed financial analysis of Wesfarmers Limited. Students must examine key financial indicators such as profitability (Return on Equity), liquidity, and solvency to assess the company's financial health. The analysis should include a discussion of Wesfarmers' performance trends, identifying strengths and weaknesses. Finally, students are tasked with providing an investment recommendation to Vikram based on their findings.

Running head: MASTERS IN PROFESSIONAL ACCOUNTING
Masters in Professional Accounting
Name of the Student:
Name of the University:
Course Code:

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Answer to Question 1
Cell Name
Here, in the above diagram it is showing that total net profit is equal to operating profit
minus taxes paid by the organization.
Net profit = Operating profit – Taxes paid
In the above screenshot, it is shown that Cell D34 is renamed as Net profit.

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Here also Cell D9 is denoted as Gross margin which is equal to net sales – cost of goods
sold.
Gross Margin = Net sales- Cost of goods sold

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Answer to Question 2
Negative Value
In the above screenshot, it is showing that figures in red color with brackets are denoted as
negative figures. Here in the operating profit figures are in -$1,509 in brackets showing negative
operating profit or operating loss for the organization.

MASTERS IN PROFESSIONAL ACCOUNTING
Answer to Question 3
In the spreadsheet, there are two parts – one is the data area and another is report. The
formulae used for the calculation are given in the report section. List of data in an excel sheet is
stored successively in the information region though in the estimation done by a person of the
gathered information after execution of different formulae that additionally incorporates IF
capacities is done is report territory. Thus, just by changing the information, comparative factors
are figured utilizing the report territory in an exceed expectations sheet.
It can be taken as an example, in which the region where the information in regards to
costs and deals are recorded with its esteems is called as information territory. In actuality, for
the computation of net salary by and individual in view of the given information, expansion of
one section ought to be finished with the usage of the recipe to register the net wage easily. This
can be effortlessly perceived by the underneath given print screens.

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Step 1
Step 2

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Answer to Question 4
IF Function

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As indicated by the previously mentioned YouTube video in regards to IF work is
demonstrating the genuine capacity and utility of that system. According to the video, the IF
work is demonstrating a particular situation made in the information table regarding whether it is
valid or it is false. This specific site interface is legitimately clarifying the whole capacity with
the assistance of cursor.
Answer to question 5
Periodic systems
Periodic inventory system is one of the stock frameworks that update stock toward the
finish of every timeframe. This stock framework helps in monitoring stock on occasional
essential (Drury, 2013). No exertion is really required for keeping refreshed information records
of either stock or cost of merchandise sold. This stock framework records the diary sections
toward the finish of bookkeeping period.
Example

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Answer to Question 6
Part A:

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Part B:
Normal View

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Formula View

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Part C:
Normal View

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Formula View

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Changes in six data in 10 Column Sheet
Normal View

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Formula View

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Part D:
To,
Report to Senior Manager,
The normal oversights that happen amid the execution of a corporate spreadsheet
contains-production sensible errors, disregarding the "inherent" capacities, neglecting to
duplicate every one of the cells for calculation, by isolating the formulae and information
passage cells especially to dodge the disarray of any sort. Moreover, to spare the exceed
expectations spreadsheet is must on the grounds that without sparing it the calculations will be
futile. To stay away from perplexity of any sort one must open another tab to make any
examinations. Also, cancellation of range names ought to be done and to dodge any wrong count
one should cross check and twofold check the estimations.
To accomplish the coveted flawlessness the association can likewise employ a specialist
person who will cross check and twofold check the exceed expectations sheet estimations.
Different blunders that are discovered regularly when one uses corporate spreadsheet involves
cell referencing, contraption of calculation, meaningfulness, hardcoded numbers, extended
suspicions and concealed sheets or segments. Furthermore, some real mistakes that are likewise
observed to happen habitually are, prerequisite to check the equation, locking of cells with the
formulae, style, careful remarkingand instinctive marking of the diagrams and names
legitimately.
Regards

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Answer to Question 7
Normal View
Inventory Ledger (Average Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $57 $3,420
03-Oct 10.00 $65 $650 60 $57 $3,420
10 $65 $650
70 $58 $4,070
12-Oct 30 $70 $2,100 70 $58 $4,070
30 $70 $2,100
100 $62 $6,170
18-Oct 70 $72 $5,040 100 $62 $6,170
70 $72 $5,040
170 $66 $11,210
31-Oct 55 $66 $3,627 115 $66 $7,583
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $57 $3,420
03-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $57 $3,135 5 $57 $285
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $3,135 115 $8,075

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Inventory Ledger (LIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $57 $3,420
03-Oct 10 $65 $650 60 $57 $3,420
10 $65 $650
12-Oct 30 $70 $2,100 60 $57 $3,420
10 $65 $650
30 $70 $2,100
18-Oct 70 $72 $5,040 60 $57 $3,420
10 $65 $650
30 $70 $2,100
70 $72 $5,040
31-Oct 55 $72 $3,960 60 $57 $3,420
10 $65 $650
30 $70 $2,100
15 $72 $1,080
31-Oct 55 $3,960 115 $7,250
Calculation workings:
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $3,627 $3,135 $3,960
GROSS PROFIT $21,373 $21,865 $21,040
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Beginning Inventory $3,420 $3,420 $3,420
Net Purchases $7,790 $7,790 $7,790
Cost of Goods Available $11,210 $11,210 $11,210
Ending Inventory $7,583 $8,075 $7,250

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Cost of Goods Sold $3,627 $3,135 $3,960
Formula View

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Revised Data Calculation
Normal View
Inventory Ledger (Average Method)
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $110 $6,600
03-Oct 10.00 $100 $1,000 60 $110 $6,600
10 $68 $680
70 $104 $7,280
12-Oct 30 $85 $2,550 70 $104 $7,280
30 $85 $2,550
100 $98 $9,830
18-Oct 70 $80 $5,600 100 $98 $9,830
70 $80 $5,600
170 $91 $15,430
31-Oct 55 $91 $4,992 115 $91 $10,438
Inventory Ledger (FIFO Method):
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $110 $6,050 5 $110 $550
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $6,050 115 $9,700

MASTERS IN PROFESSIONAL ACCOUNTING
Inventory Ledger (LIFO Method)
Purchase Cost of Goods Sold Balance Inventory
Date Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount Unit
Cost per
Unit
Total
Amount
01-Oct 60 $110 $6,600
03-Oct 10 $100 $1,000 60 $110 $6,600
10 $100 $1,000
12-Oct 30 $85 $2,550 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
18-Oct 70 $80 $5,600 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
70 $80 $5,600
31-Oct 55 $80 $4,400 60 $110 $6,600
10 $100 $1,000
30 $85 $2,550
15 $80 $1,200
31-Oct 55 $4,400 115 $11,350
Calculation workings:
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Sales Revenue $25,000 $25,000 $25,000
Less: Cost of Goods Sold $4,992 $6,050 $4,400
GROSS PROFIT $20,008 $18,950 $20,600
Calculation of Gross Profit
Particulars Average Cost FIFO LIFO
Beginning Inventory $6,600 $6,600 $6,600
Net Purchases $9,150 $9,150 $9,150
Cost of Goods Available $15,750 $15,750 $15,750
Ending Inventory $10,438 $9,700 $11,350
Cost of Goods Sold $5,312 $6,050 $4,400

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MASTERS IN PROFESSIONAL ACCOUNTING
Formula View

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Answer to Question No. 8
Normal View
Bank Reconciliation Statement
As on 30th April
Dated Particulars Amount
30/4 Bank Balance as per Pass Book $19,670
Add:
Deposit in Transit $1,543
EFT Insurance Payment $300
Book Error Cheque 1419 $340
NSF Cheque from Customer $1,700
Bank Service Charge $40 $3,923
$23,593
Less:
Outstanding Cheques 2462
EFT Rent Receipt 600
Note Receivable $1,500
$4,562
30/04 Cash Account Balance as of 30th April $19,031
Formula View
Date Particulars Amount
30/4 Bank Balance as per Pass Book 19670
Add:
Deposit in Transit 1543
EFT Insurance Payment 300
Book Error Cheque 1419 340
NSF Cheque from Customer 1700
Bank Service Charge 40 =SUM(D8:D12)
=E6+E12
Less:
Outstanding Cheques =1532+700+230
EFT Rent Receipt 600
Note Receivable 1500
=SUM(D15:D18)
30/04 =IF(E20>0,"Cash Account Balance as of 30th April","Bank Overdraft Balance as of 30th April") =E13-E18
Bank Reconcilaition Statement
As on 30th April

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Changes in data (Revised calculation)
Normal View
Formula View

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Answer to Question 9
Journal Entries Accounts Receivable Entries
Particulars Dr. Cr.
Party A/c $ 1,500.00
Sales A/c $ 1,500.00
Bank A/c $ 10,000.00
Creditor’s A/c $ 10,000.00
Bad debt A/c $ 2,300.00
Debtor’s A/c $ 2,300.00
Allowance for doubtful A/c $ 3,400.00
accounts receivable A/c $ 3,400.00
Bank A/c $ 9,000.00
Creditor’s A/c $ 9,000.00

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Answer to Question 10
Estimation of Bad debts
1. Direct write-off method
In the Books of…
Journal Entries
Dated Particulars Dr. Cr.
Amount Amount
05-10-2017 Bad Debts Expenses A/c. $16,000
Accounts Receivable A/c. $16,000
30/6/2017 Profit & Loss A/c. $16,000
Bad Debts Expenses A/c. $16,000
07-05-2017 Cash A/c. $16,000
Bad Debt Recoveree A/c. $16,000
2. Allowance method
In the Books of…
Journal Entries
Dr. Cr.
Date Particulars Amount Amount
10/5/2017 Bad Debts Expenses A/c. $16,000
Provision for Doubtful Debts A/c. $16,000
10/5/2017 Provision for Doubtful Debts A/c. $16,000
Accounts Receivable A/c. $16,000
30/6/2017 Profit & Loss A/c. $16,000
Bad Debts Expenses A/c. $16,000

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5/7/2017 Accounts Receivable A/c. $16,000
Provision for Doubtful Debts A/c. $16,000
5/7/2017 Cash A/c. $16,000
Accounts Receivable A/c. $16,000
.

MASTERS IN PROFESSIONAL ACCOUNTING
Question 11
Evaluation of firm’s financial position
Before investing the financial resources into any organization, the speculators need to
assemble appropriate data about the monetary position of the organization. There is diverse
money related explanation that is novel to each other, for example, Income Statement, Balance
Sheet and Cash stream articulation (Drury, 2013). Here, salary explanation clarifies about costs
and pay that are brought about by organizations. Accounting report indicates money related
position of an organization. Income proclamation clarifies money inflows and outpourings of a
specific business undertaking.

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Answer to Question 12
Dishonour of a Notes Receivable
Particulars Amount (Dr.) Amount (Cr.)
Party A/c $ 5,000.00
Sales A/c $ 5,000.00
Notes Receivable A/c $ 7,800.00
Accounts receivable A/c $ 7,800.00
Receivable A/c $ 9,000.00
Bank A/c $ 9,000.00
Bank A/c $ 12,000.00
Receivable A/c $ 12,000.00

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Answer to Question 13
Company Wesfarmers Limited
In this specific case, appropriate clarification is given about the Australian retail
organization named as Wesfarmers Limited. This organization is recorded in Australian Stock
Exchange and works in expanded zones, for example, retail, enterprises and wellbeing, office
enhancements, vitality and chemicals.
Data is assembled from the yearly report of Wesfarmers Limited as it demonstrates
benefit inferable from the parent part. The organization utilizes remote money that sums $15
million and demonstrate income from support save. Along these lines, it is comprehended that
the organization is bringing about misfortune adding up to $78 million (Wesfarmers.com.au,
2017).
If there should be an occurrence of profit, the organization paid around $2600 million of
profit for the money related year 2016 (Wesfarmers.com.au, 2017).
Return on Equity
Net Income $407
Shareholder’s Equity $22949
Return on Equity 0.018
From the yearly report of Wesfarmers Limited, it is comprehended that the organization
is winning just $0.018 on the value that is not in the least useful for long run
(Wesfarmers.com.au, 2017).

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Wesfarmers Limited has profit per share at 36.2% through utilization of weighted normal
numbers for the conventional offer (Wesfarmers.com.au, 2017).
If there should arise an occurrence of hazard and alleviation administration, the
organization will never unveil that their budgetary explanation contains material misquoted
figures. The organization had not yet offered obligation to any person to get ready money related
explanation that incorporates with AASB applied structure.
If there should arise an occurrence of Corporate Governance, the organization really
aggregates with the suggestions in agreement to third version of ASX Corporate Governance.

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Working capital ratio
Net profit after tax

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After considering the above analysis it can be suggested to Vikram to invest $50,000 of
his money in Wesfarmers Limited as the organizationis in stable position and in addition net
benefit expanded over recent years. It is noticed that Wesfarmers Limited can create benefits in
the following monetary year.

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Reference
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Drury, C. M. (2013). Management and cost accounting. Springer.
Hall, J. A. (2012). Accounting information systems. Cengage Learning.
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control purposes in management accounting system. Mediterranean journal of social
sciences, 5(24), 79.
Nobles, T. L., Mattison, B. L., & Matsumura, E. M. (2013). Horngren's Financial & Managerial
Accounting: Pearson New International Edition. Pearson Higher Ed.
Odar, M., Kavčič, S., & Jerman, M. (2015). The role of a management accounting system in the
decision-making process: evidence from a post-transition economy. Engineering
Economics, 26(1), 84-92.
Porter, G. A., & Norton, C. L. (2012). Financial accounting: the impact on decision makers.
Cengage Learning.
Reimers, J. L. (2013). Financial Accounting: Pearson New International Edition: A Business
Process Approach. Pearson Higher Ed
Wesfarmers.com.au. (2017). Home. Wesfarmers.com.au. Retrieved 17 September 2017, from
http://wesfarmers.com.au