Analysis of Financial Performance and Sustainability Initiatives of Wesfarmers' Retail Businesses

Running head: ACCOUNTING CONCEPTS AND PRACTICE 1
BUACC 5930: Accounting Concepts and Practices
Student’s Name
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ACCOUNTING CONCEPTS AND PRACTICES 2
Question 1
Wesfarmers is divided into various segments. For this question, the retail and
departmental stores segments would be analyzed. In the retail segment, the companies of
Wesfarmers are Coles, home improvement, and Officeworks. In the departmental stores, on the
other hand, the corporations present include Kmart and Target (Wagner, Block, Miller, Schwens
& Xi, 2015). First, Coles is a supermarket, a liquor retailer, a hotel portfolio, a fuel retailer, a
financial services agent and a property business operator. Second, home improvement offers
building material, garden improvement, home improvement products and improvements of
project builders. Third, Officeworks retails office products and solutions for home and SMEs.
Fourth, Kmart sells apparel and general merchandise as well as automotive services
(Wesfarmers, 2017d). Lastly, Target sells general merchandise, apparel, and homewares. Below
is a table showing the revenue of the businesses for the financial year ended 2017.
Revenue (2017) Revenue (2016)
Coles $ 39,217.00 $39,242
Home improvement $ 13,586.00 $11,571
Departmental stores $ 8,528.00 $8,646
Officeworks $ 1,964.00 $1,851

ACCOUNTING CONCEPTS AND PRACTICES 3
Revenue (2017)
Coles Home improvement
Departmental stores Officeworks
Revenue (2016)
Coles Home improvement
Departmental stores Officeworks
Based on the analysis above, Coles earned a higher revenue in 2017 when compared to
the other businesses which show that it was performing better than the rest. The one with the
least revenue was Officeworks which shows that it was performing poorly when compared to the
rest. A comparison between the financial performance of the four divisions from 2016 to 2017
shows that Coles and the Departmental stores performed poorer in 2017 while the Home
Improvement division and Officeworks division performed poorer in 2016 (Wesfarmers, 2017c).

ACCOUNTING CONCEPTS AND PRACTICES 4
Based on the analysis of the gross margin of the four companies for 2017, Home Improvement
has a higher gross margin of 9.16% when compared to the other segments. Ultimately, Coles
seems to have the least gross margin of 4.10% while in the real sense it had a higher revenue.
Based on the profitability analysis of the four divisions for 2016, their gross margins were
4.74%, 10.49%, 7.24% and 3.18% for Coles, the Home Improvement division, Officeworks and
the Departmental stores' segment respectively (Subramanyam & Wild, 2009). According to this
financial period, the Home Improvement business had a higher gross margin while Coles had the
least.
Profitability (2017) Coles Home
improvement
Officework
s
Departmental
stores
Gross margin
Revenue $
39,217.00
$
13,586.00
$ 1,964.00 $
8,528.00
Gross profit $
1,609.00
$
1,245.00
$ 144.00 $
543.00
Gross margin 4.10% 9.16% 7.33% 6.37%
Profitability (2016) Coles Home
improvement
Officework
s
Departmental
stores
Gross margin
Revenue $
39,242.00
$
11,571.00
$ 1,851.00 $
8,646.00