Deferred Tax and Cash Flow Statement Analysis of Woolworth Company

WOOLWORTH COMPANY
Corporate Accounting
Deferred tax and Cash Flow statement
Analysis
Name of the Author

Table of Contents
INTRODUCTION.....................................................................................................................................2
REQUIREMENT (i)...................................................................................................................................2
CASH FLOW STATEMENT – ANALYSING THE INFORMATION.............................................................2
REQUIREMENT (ii)..................................................................................................................................2
OPERATING, INVESTING AND FINANCING ACTIVITIES: A COMPARATIVE ANALYSIS..........................2
REQUIREMENT (iii).................................................................................................................................2
REPORTING OF ITEMS IN OTHER COMPREHENSIVE INCOME STATEMENT........................................2
REQUIREMENT (IV)................................................................................................................................6
OTHER COMPREHENSIVE INCOME STATEMENT: A PORTRAYAL........................................................6
REQUIREMENT (v)..................................................................................................................................6
SEPARATION OF THE ITEMS OF OTHER COMPREHENSIVE INCOME STATEMENT FROM THE PROFIT
AND LOSS SATTEMENT......................................................................................................................6
REQUIREMENT (VI)................................................................................................................................6
WOOLWORTHS’ CURRENT TAX EXPENSE...........................................................................................6
REQUIREMENT (vii)................................................................................................................................6
REASON OF A DIFFERENT TAX EXPENSE THAN THE ONE CALCULATED USING THE APPLICABLE TAX
RATE OF 30 % OVER COMPANY’S ACCOUNTING INCOME.................................................................7
REQUIREMENT (viii)...............................................................................................................................7
DEFFERED TAX ASSETS/LIABILITIES....................................................................................................7
REQUIREMENT (ix).................................................................................................................................7
REASON OF DIFFERENCE IN INCOME TAX PAYABLE AND CURRENT INCOME TAX EXPENSE..............7
REQUIREMENT (x)..................................................................................................................................7
REASON OF DIFFERENCE IN CURRENT INCOME TAX EXPENSE AND THE INCOME TAX PAID AS
REPORTED IN THE STATEMENTS........................................................................................................7
REQUIREMENT (xi).................................................................................................................................7
Conclusion.............................................................................................................................................7
References.............................................................................................................................................9

INTRODUCTION
The reports help the users to accumulate the data and formulate inferences based on
data analysis. Different kinds of examinations are made and thereupon the user gets an idea
of how to proceed. The annual reports of the company for financial year 2017, 2016 and 2015
have been fetched from company’s website and the same are used as a base for the following
report.
REQUIREMENT (i)
CASH FLOW STATEMENT – ANALYSING THE INFORMATION
The cash flow statement of Woolworths for the financial years 2017, 2016 and 2015 have
been analysed and the information contained in the same is studied. As known, the cash flow
statement presents the transactions which involve inflow and outflow of a company’s cash
balance. This statement pays no regard to the accrual of the transaction; all that’s important is
involvement of cash (Kubick, et al. 2016).
From the study of this statement, it’s observed that the company has taken a wonderful step
of repayment of its outside liabilities (debts) and even have resorted on taking less debt from
outside. Moreover, the company has reduced its cash payment of dividend in financial year
2017 to AUD 540.9 million as compared to AUD 1184.8 million in financial year 2016 and
AUD 1538.6 million in years 2015. The cash and cash equivalents at the beginning as well as
end have shown the same trend in all three financial years. In financial year 2017 and 2015,
the concern has reported proceeds from issue of equity shares which brought a rise in the
balance of cash and cash equivalents at the ending period. Over the three financial years the
income tax expense has also reduced (Bradley, Dauchy, and Hasegawa, 2018).

REQUIREMENT (ii)
OPERATING, INVESTING AND FINANCING ACTIVITIES: A COMPARATIVE
ANALYSIS
The operating activities consist of the cash transactions that arise from the day to day
operations of the concern. Investing activities include the transactions arising on account of
the investments made by the concern, sale of investments, purchase of plants etc. and other
related activities. And the financial activities comprise of the transactions with which the
company backs up its fund requirements and related expenses.
The following table provides an insight about the same:
AUD IN MILLION 2016-17 2015-16 2014-15
Net cash provided by operating activities 3122 2375.5 3345.1
Net cash used in investing activities 1431.4 1266.7 1333.9
Net cash used in financing activities 1729.3 1474.9 1610.8
The operating activities, investing activities and financing activities, all have shown an
inclination in respective directions (used or provided) in financial year 2017 over financial
year 2016.This clearly indicates the different amounts of cash used and provided by each of
the activities with changing years. The details could further be fetched from the cash flow
statement which indicates deep variations in the individual transactions as well (Brest,
Gilson, and Wolfson, 2018).
REQUIREMENT (iii)
REPORTING OF ITEMS IN OTHER COMPREHENSIVE INCOME STATEMENT
While following the international requirements a concern which prepares a statement of other
comprehensive income depicts following information (Edwards, 2017).
AUD in million 2016-2017 2015-16 2014-15