Woolworths Group Financial Statement Analysis & Investor Review

This report provides a comprehensive financial analysis of Woolworths Group, an ASX-listed retail company. It begins with an overview of Woolworths, including its history, market share, and key assets. The analysis delves into the company's financial statements (income statement, balance shee...Read More

COMPANY ANALYSIS OF
WOOLWORTHS GROUP

INTRODUCTION ABOUT
WOOLWORTHS
• Woolworths Supermarkets is also known as by the other
name "Woolies"
• It was incorporated way back in early 1920's around 92
years ago.
• Its headquarter is located in Bella Vista, new South
Wales, Australia.
• Woolworth mainly deals out in an industry of retail
segment while operating through a chain of supermarket
stores.
• It is a listed ASX company with more than around
111,000 employees working for the organization.

Market share of Woolworths in
retail industry
• In terms of sales
revenue, Woolworths
carry almost half of the
Australian retail market
share.
• Coles and Woolworths
jointly control around
80% of the total
Australian retail market.

Woolworths Financial Statements
utilisation for its users
No. Financial
Statement
Utilised by Stakeholder Use of financial
statement
1. Statement of
financial position
Investors, Management,
Auditors, Employees,
Government, Public at
large
To know about the
financial position at
particular point of time
2. Statement of
profitability
Taxation authorities,
Business lenders,
Auditors, Employees
To ascertain the
profitability position of
the business group
earned by them during
a particular period
3. Statement of
Cash flow
Business manager,
Creditors and other
lenders
To know about the cash
solvency position of
business

Woolworths Key Assets
• Woolworths Key assets are its private labelled brands
through which it is operating in the retail market
segment

Influence on firm’s key asset by accounting
conventions & managerial judgements
• Woolworths heavy losses during the past financial year due to
improper management of lease accounting
• The land bill raise by the retailer affected the overall
profitability of the group.
• Property was not valued as per the accounting conventions at
the demerger with Kingfisher group
• Internet and other business rivals has taken its market place
and not capturing the dynamic external market changes by the
Woolworths group affected the management a lot

Woolworths Income statement
for last five years
WOOLWORTHS LTD (WOLWF) INCOME STATEMENT
Fiscal year ends in June. AUD in millions
except per share data. 2012-06 2013-06 2014-06 2015-06 2016-06
Revenue 55441 58674 60952 60868 58276
Cost of revenue 40792 42913 44475 44345 42677
Gross profit 14649 15762 16478 16524 15599
Total operating expenses 11348 12414 12945 13482 14271
Operating income 3301 3347 3532 3042 1328
Interest Expense 318 410 278 255 246
Other income (expense) 85 278 260 281 278
Income before income taxes 3068 3215 3515 3068 1360
Provision for income taxes 885 960 1057 930 520
Minority interest 0 5 7 -9 -1113
Other income 0 5 7 -9 -1113
Net income from continuing operations 2183 2255 2458 2137 840
Net income from discontinuing ops -366 10 -3188
Other 0 -5 -7 9 1113
Net income 1817 2259 2452 2146 -1235

Woolworths Financial Statement
for last five years
WOOLWORTHS LTD (WOLWF) BALANCE SHEET
Fiscal year ends in June. AUD
in millions except per share
data. 2012-06 2013-06 2014-06 2015-06 2016-06
Assets
Total current assets 5802 6226 7175 7661 7427
Total non-current assets 15779 16024 17030 17676 16075
Total assets 21581 22250 24205 25337 23502
Liabilities and stockholders'
equity
Total liabilities 13393 13222 13953 14503 15032
Total stockholders' equity 8188 9028 10252 10834 8471
Total liabilities and
stockholders' equity 21581 22250 24205 25337 23502

Woolworths Cash flow
Statement for last five years
WOOLWORTHS LTD (WOLWF) Statement of CASH FLOW
Fiscal year ends in June. AUD in millions
except per share data. 2012-06 2013-06 2014-06 2015-06 2016-06
Net cash provided by operating activities 2874 2720 3473 3345 2358
Net cash used for investing activities -2080 -1202 -2031 -1334 -1267
Net cash provided by (used for) financing
activities -1469 -1520 -1372 -1611 -1475
Effect of exchange rate changes 1 6 4 10 7
Net change in cash -674 4 73 411 -377
Cash at beginning of period 1520 845 849 923 1333
Cash at end of period 845 849 923 1333 956
Free cash flow 733 750 1590 1172 375
Supplemental schedule of cash flow data
Cash paid for income taxes -941 -977 -1162 -1056 -848
Cash paid for interest -396 -477 -348 -310 -289

Conclusion over Financial statements
statement of Woolworths
After the year 2015, there has been a heavy decline in
the profitability and revenue projections of the group.
The group statement of the company reported a loss of
$1.235 billion.
In the quarter 4, the sales related to food and liquor has
been slashed by 0.7 percent as in comparison to last
year data.

Ratio analysis table of
Woolworths
Liquidity/Financial Health 2012-06 2013-06 2014-06 2015-06 2016-06
Latest
Qtr
Current Ratio 0.86 0.91 0.95 0.84 0.83 0.83
Quick Ratio 0.22 0.23 0.21 0.23 0.16 0.16
Financial Leverage 2.64 2.46 2.36 2.34 2.77 2.77
Debt/Equity 0.57 0.47 0.4 0.28 0.46 0.46
 The below mentioned table showcase the financial ratios of
Woolworths group over the period of time
With the help of below table the liquidity position or
financial health of the group can be evaluated out.

Ratio analysis comparison
Woolworths and Wesfarmers

2012-06 2013-06 2014-06 2015-06 2016-06
0
0.1
0.2
0.3
0.4
0.5
0.6
Debt/Equity
Woolworths
Debt/Equity
Wesfarmers
2012-06 2013-06 2014-06 2015-06 2016-06
0
0.5
1
1.5
2
2.5
3
Financial Leverage
Woolworths
Financial Leverage
Wesfarmers
2012-06 2013-06 2014-06 2015-06 2016-06
0
0.2
0.4
0.6
0.8
1
1.2
Current Ratio
Woolworths
Current Ratio
Wesfarmers
2012-06 2013-06 2014-06 2015-06 2016-06
0
0.1
0.2
0.3
0.4
0.5
0.6
Quick Ratio Woolworths
Quick Ratio Wesfarmers

Ratio analysis comparison
Woolworths and Wesfarmers
 The profitability of both the groups lowered in the year
2016, the issue has been raised due to downfall in particular
industry and entrants of new dynamic online retailer chains.
2013-06 2014-06 2015-06 2016-06
-1500
-1000
-500
0
500
1000
1500
2000
2500
3000
Net income Woolsworths
Net income Wesfarmers

Ratio analysis table of
Woolworths
With the help of below table the Efficiency of the group in
terms of revenue can be evaluated out.
Key Ratios -> Efficiency Ratios
Efficiency 2012-06 2013-06 2014-06 2015-06 2016-06 TTM
Days Sales Outstanding 4.91 4.05 3.94 3.6 3.19 3.35
Days Inventory 33.26 33.61 36.52 39.37 40.33 42.97
Payables Period 37.63 34.42 35.85 39.91 42.12 44.88
Cash Conversion Cycle 0.54 3.24 4.6 3.05 1.4 1.45
Receivables Turnover 74.29 90.14 92.69 101.39 114.55 108.8
Inventory Turnover 10.97 10.86 10 9.27 9.05 8.49
Fixed Assets Turnover 6.09 6.23 6.47 6.19 6.36 6.04
Asset Turnover 2.6 2.68 2.62 2.46 2.39 2.27

Key assets, liabilities, equity,
income & expenses
• Key Assets- Goodwill & Inventory
• Key Liabilities - Long term debt
• Equity Class- Equity Shares
• Other income- Other income- (no
specification)
• Expenses- Minority interest

Shareholder’s equity position of
Woolworths

Solvency ratio analysis of Woolworths
Analysis on Equity position of
Woolworths
 The share price of the equity is much below 5 year
high data of the Woolworths group.
Adverse profitability and revenue positions during
the previous year placed a great impact on the prices
of equity share.
In the previous slide, the stock movement of the
group presented through line chart so the fact that
share prices displayed on the lowest side in the year
2016 as in comparison to the last 5 years data.

References
Letts, S., & Ong, T. (2016). Woolworths posts $1.2b loss; food, petrol sales slump.
Retrieved Aug 15, 2017, from http://www.abc.net.au/news/2016-08-25/woolworths-
results/7783378
Morningstar. (2017). Woolworths Ltd WOLWF. Retrieved Aug 16, 2017, from
http://financials.morningstar.com/ratios/r.html?t=WOLWF
Parker, C. (2013). FactCheck: is our grocery market one of the most concentrated in the
world? Retrieved Aug 16, 2017, from http://theconversation.com/factcheck-is-our-
grocery-market-one-of-the-most-concentrated-in-the-world-16520