Analysis of Cash Flow, Other Comprehensive Income Statement and Income Tax Accounting of Woolworth Group

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Corporate Accounting

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Contents
Introduction......................................................................................................................................3
Part 1: Understanding the cash flow statement of Woolworth Group.............................................3
Part 2: Understanding the other comprehensive income statement of the Woolworth Group........6
Part 3: Understanding the accounting of income tax in the annual report of Woolworth Group....7
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
The present report is undertaken in order to analyze the financial statements of a public
listed company listed on the Australian Securities Exchange (ASX). The financial statements
evaluation is carried out to gain an insight into the present and potential future growth prospects
of a company. The major financial statements developed by a company to provide disclosure of
its financial position are cash flow statement, balance sheet, profit and loss statement and
statement of equity. In this context, the report is developed to present an evaluation of the cash
flow statement and income statement of the selected company. The cash flow statement analysis
has specifically emphasized on providing an in-depth understanding of each item reported in the
statement and depicting a comparative analysis of the three major categories of cash flows. The
income statement evaluation is undertaken for depicting the major items reported in the
statement and explaining the reason of the financial items that are not reported in the income
statement. In addition to this, the report also evaluates the accounting for corporate income tax in
the financial statement of the selected company. In this context, the report has carried out an
analysis of the tax expenses, deferred tax assets or liabilities, income tax payable reported in the
financial statement. The public listed company selected for the analysis purpose is Woolworths
Ltd, a leading retail company in Australia. Woolworths is known to be a major supermarket
company that has occupied a prominent position in the retail sector of the country owing to its
unique portfolio of products and services. The company specializes mainly in providing
groceries, magazines health and beauty products, household products, baby supplies and
stationery items.
Part 1: Understanding the cash flow statement of Woolworth Group
1.1: Items listed in the cash flow statement and understanding of each item
Cash Flow (Financial Items listed for year 2016 and 2017)
Woolworth Group
Amount in $ million
Particulars 2017 2016 Change
Amount in %

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Cash flows items from the operating
activity
Cash collected from the customers
$
65,498.90
$
65,329.80
$
169.10 0.26%
Payments made to suppliers and
employees in cash
$
(61,474.80)
$
(61,834.50)
$
359.70 0.58%
Cash used for payment of interest
charge
$
(234.00)
$
(289.30)
$
55.30 19.12%
Income tax paid in cash to tax
authorities
$
(668.10)
$
(848.50)
$
180.40 21.26%
Cash flows items from the investing
activity
Cash used to purchase property, plant
and equipment (It excludes any
payments for property development)
$
(1,633.60)
$
(1,465.00)
$
(168.60) -11.51%
Cash used to purchase property, plant
and equipment -Property Development
$
(253.20)
$
(473.30)
$
220.10 46.50%
Cash received from the sale of property,
plant and equipment
$
279.80
$
722.00
$
(442.20) -61.25%
Cash collected from the sale of
subsidiaries and other investments
$
200.70
$
15.00
$
185.70 1238.00%
Cash flows items from the financing
activity
Cash Collected through issue of
common shares
$
55.50
$
-
$
55.50
Cash gain through issue of equity shares
in subsidiaries
$
-
$
120.00
$
(120.00)
Cash received through increase in
borrowings
$
184.10
$
628.50
$
(444.40) -70.71%