Financial Analysis of Wesfarmers

Wesfarmers
Financial analysis

Table of Contents
Introduction...........................................................................................................................................2
Answer to the given question no-1........................................................................................................2
Several activities of Wesfarmers.......................................................................................................2
Answer to the given question no-2........................................................................................................3
Equity shareholders...........................................................................................................................3
Answer to the given question no-3 and 4..............................................................................................3
Share price.........................................................................................................................................3
Answer to the given question no-5........................................................................................................4
Debt composition..............................................................................................................................4
Answer to the given question no--6......................................................................................................5
Fixed capital.......................................................................................................................................5
Answer to the given question no--7......................................................................................................5
Answer to the given question no—9.....................................................................................................7
Dividend distribution of Wesfarmers.................................................................................................7
Retained earning...............................................................................................................................8
Equity capital.....................................................................................................................................8
Conclusion.............................................................................................................................................9

Introduction
This report reveals the qualitative analysis of the financial performance of the
Wesfarmers and how well it has been managing its financial capital in market. Nonetheless,
Wesfarmers is having good amount of profitability which has strengthen its business and
helps it to increase its overall share capital in market. This report, reflects the key
understanding on the capital value, share price valuation and changes in the profitability of
the company in market. However, company has kept low financial leverage which has
increased its overall business costing in long run. This report has shown the activities of the
Wesfarmers and its efficiency to deploy its funds in the business process. There are several
parts in which the company’s business growth, share price movement and financial leverage
have been assessed.

Answer to the given question no-1
Several activities of Wesfarmers
Wesfarmers deals in various kinds of activities. It covers diverse kind of business
operations such as outdoor living, home improvement, office supplies, apparel, general
merchandise, as well as industrial division in the energy, chemicals, industrial products,
fertilisers, and safety products. It also indulges in activities of supplies maintenance,
packaging, repair, operating, and safety products. Besides this, it also has the subsidiary that
specialises in ammonium nitrate, ammonia, sodium cyanide, word plastic products and
polyvinyl chloride resin. It also seeks the activities of main program related to schooling.
The main objective of this program is to promote the significant role of the entire
school community. In addition to this, it also has diverse business operation that covers the
departmental stores, supermarkets, home improvement, coal production, office supplies,
fertilisers and energy, chemicals (Fang, Kosev, & Wakeling, 2015). Wesfarmers also has the
shareholder base of around 5, 00,000. For shareholders, the main objective of the Wesfarmers
is to provide the satisfactory return to their shareholders. The other activities of Wesfarmers
include head office, treasury, as well as the central support function. In the private equity
investment, it has 50% interest in the “Gresham Private Equity.” (Fang, Kosev, & Wakeling,
2015).
Answer to the given question no-2
Equity shareholders
From the given financial statements of Wesfarmers (2018), it is seen that the
organisation`s equity composition consists of issued capital, reserved shares, retain earnings,
and reserves. Sum of total equity is $22754 million in 2018 (Wesfarmers, 2017). Whereas, it
was just $23941 million in 2017 (Wesfarmers, 2017). In the total of equity in 2018, issued
capital of $22277 million in 2018, which was less in $ 22268 in 2017. Reserved shares has