Analysis of Wesfarmers Limited's 2017 Cash Flow, Comprehensive Income Statement and Corporate Income Tax

ASSESSSMENT TASK
The Public limited Company that is selected and listed on the Australian Securities Exchange
(ASX) is Wesfarmers Limited. We are conducting the analysis of 2017. In the year 1914 this
Company was founded as a co-operative to provide merchandise and services to Western
Australian farmers. In the year 1984 the Company was listed in the Australian Securities
Exchange and grew into a major retail conglomerate. Wesfarmers Limited is one of the
largest Australian Company who overtakes Woolworths and BHP Billiton. Wesfarmers
Limited is having more than 220,000 numbers of employees and about 515,000 stakeholders.
Wesfarmers Limited works globally and domestically through Wesfarmer’s Chairman,
Finance Director, Managing Director and others in the Wesfarmers leadership team.
Wesfarmer Limited main aim is to provide a satisfactory return to its shareholders. The Core
values of Wesfarmers are Accountability, Openness, Integrity and Boldness. Wesfarmers
engages itself with Shareholders throughout the year at Annual General Meeting. Wesfarmers
Limited works in the sustainability performance of the Company and also holds an annual
sustainability investor roadshow. The Company has also reported Whistle Blower process to
the Audit and Risk Committee. Wesfarmers principles is to eliminate gender balance and
focus on Women’s empowerment. This Company workforce is made up of 46 percent men
and 54 percent Women. Women hold 56 percent of award or enterprise and 47 percent of
salaried roles.
CASH FLOW STATEMENT
(i) Cash flow statement is a flow of cash flows in a financial statement which shows the
changes in cash and cash equivalents. There are three types of activities in a cash flow
statement that is Operating activities, Investing activities and Financing activities. It is
prepared to see the liquidity position in the company. Cash flow statement is prepared by the
company because statement is prepared under the accrual basis of accounting and the
expenses accordingly might not have been reported correctly. Cash flow statement is very
important for the company because it gives a clear picture about the growing status of the
company. If cash flow is positive it means the company is running smoothly. Operating

activities in a cash flow statement refers to the net cash inflow and outflow. This activity is
related to the company’s main buying and selling inflow and outflow. Investing activities in a
cash flow statement refers to the changes in company’s cash position which results in the
profit or losses from investing in financial market. Financing activities in a cash flow
statement refers to the inflow and outflow of cash from issuance of new stock, repurchase of
any existing stock and any dividend payment (Hoy 2017).
By analysing the data of 2017 of wesfarmers, it has seen that there is a change in operating
activities by $m 861 from last year. It is also noticed that the change in net capital
expenditure has incurred by making payment of property, Plant & expenditure and
intangibles assets
(ii) The comparative analysis of the three broad category of cash flows of wesfarmers is
discussed herein. There has been a significant increase in the revenue of $m 2885 from last
year (2016) while it was $m 67684 in 2015. There is a huge change in impairment and
writedown of assets of $m 2123 from last year. There has been a decrease in trade payable of
$m 94 and trade receivables of $m 70 as compared to last year (2016). The taxes paid in the
current year is around $m 951 as compared to payment in 2016 which is $m 1009 and in
2015 it was paid around $m 1102. In the year 2017 the dividend was paid around $1998m as
compared to the last year (2016) which is around $m 2270 and in 2015 it was $m 2597. There
is no huge subsidiary acquisition payment is see from last year. The net proceeds has
increased from the sale of subsidiaries of $m 946 (WesFarmers 2017) The revenue has
increased from last two years which results in the overall growth of the company. The tax
payment of the current year is around $m 951 as compared to the payment in last two years.
There was a capital return payment in the year 2015 which is not been paid in the year 2016
and in 2017. The overall gist of the company’s cash flow statement is that Company has
increased cash in hand and cash at bank and on deposit by around $m 402 as compared to
last year (WestFarmers 2016)
OTHER COMPREHENSIVE INCOME STATEMENT
(iii) Comprehensive Income Statement means the statement of all the net incomes and
expenses and other items which is recognised during a specific period and that must bypass
the income statement which have not been realised. Comprehensive Income statement
includes items like foreign currency translation gains or losses, revenue, finance cost, tax
expenses, unrealised holding gain or loss from available for sale of securities, discontinued

operations, profit share and profit loss. It also includes realised gains or losses transferred to
non – financial assets, share of associates and joint venture profits. A statement of
comprehensive income is different from a typical income statement because it includes profit
or losses in detail and may omit changes in net assets due to change of ownership, transfer of
equity holdings and other factors. Comprehensive Income statement is very important in
every business because it shows a fair amount of latitude on the timing, annual charges,
impact of quarterly and other expenses. Unrealised gains or losses on pension and retirement
benefit plan are also included in preparing Comprehensive Income Statement.
(iv) The Items of the comprehensive income statement includes many items which arises due
to the operations conducted by the company. A standard Comprehensive Income statement is
generally attached to the bottom of the income statement and it includes a separate heading
for the same. Whenever Comprehensive income statement is made by the company, a
detailed comprehensive income statement in the financial statement to give external users
detail about how the comprehensive income statement is made. The net income to the
comprehensive income statement is adjusted and transferred down to the balance sheet for
computing the total comprehensive income for that period. The losses or gains due to the non
– financial assets should have an huge impact and does not show any affects in the business
activities. The measurement loss on the defined benefit plan has been taken into account. By
making comprehensive income statement, we not only adjust the assets of the company
which is available for sale of securities but also adjusts the net assets of the company and
stock holders equity.
(v) The items of the comprehensive income statement includes the extra – ordinary items
which is accepted both by the Generally Accepted Accounting principles including
International Financial reporting standards which have been let off from the net income on
the revenue statement. The items of incomes and expenses which is included in the
comprehensive income statement is actually used to change the interest in an owner’s interest
in a business and bypass the income statement which have not been realised. Extra – ordinary
items are included in the comprehensive income statement and this statement does not
prepared by smaller companies. Comprehensive income statement is most important for
valuing larger corporations. In comprehensive income statement, it measures the sum total of
all financial and operating activities which results in changes in an owner’s interest in a
business. It is calculated by reconciling the book value per share to capture the effects of
dilution and options.