Critical Analysis of Woolworths Accounting and Financial Performance

Running Head: ACCOUNTING THEORY 0
Accounting Theory

Running Head: ACCOUNTING THEORY
Table of Contents
Introduction................................................................................................................................2
Outline of the company..............................................................................................................2
Critical Analysis of the Company..............................................................................................2
Analysis of Woolworths with Coles..........................................................................................4
Financial analysis.......................................................................................................................5
Recommendation and Conclusion..............................................................................................7
References..................................................................................................................................8

Running Head: ACCOUNTING THEORY
Introduction
The conceptual framework is an analytical tool with wide range of variations and contexts. It
can be applied in different categories. This helps to manage and organise the ideas throughout
the time the business is going to run. The accounting and conceptual framework of the
organisation helps to report the business and the transactions in the business. The
Woolworths have maintained a confident position and reduced the debt in the business. It
can be analysed form the report that the company is having an improvement in the market
share and the market price. Apart from this the company is also improving the profitability of
the business and therefore the shareholders and the investors shall invest in the market and
the jump in the performance will assist the shareholders to create a better value of the
investment (Ehiedu, 2014). Therefore it can be observed from the annual report that the
company is in compliance with the regulations and framework of the AASB.
Outline of the company
Woolworths Supermarket which is commonly known as Woolies is an Australian based
market, owned by the Woolworths Limited. The company was founded in the year 1924. The
company specialises mostly in the sales of the vegetables, fruit meat, and packaged foods.
Apart from this they are also engaged in the business of selling magazines, health and the
beauty products as well as the household products (Nimtrakoon, 2015). The current revenue
of the company is $42.132 billion and the company is operating with the 111000 number of
employees. The Woolworths is spread across the 995 locations. The company’s headquarters
are situated in the Bella Vista, New South Wales and Australia (Wesfarmers, 2018).

Running Head: ACCOUNTING THEORY
Critical Analysis of the Company
As per the analysis of the annual report of the financial year 2017, the company, according to
the independent auditor’s report presented to the members of the Woolworths Limited.
According to the critical analysis of the audit report the, company is in accordance with the
Corporations Act 2001, including a true and fair value of the Group’s financial position and
the financial performance as presented is truly in alignment with the AASB framework. Also
it can be observed from the annual report that the company is complying with the Australian
Accounting Standards. According to the AASB, there were certain areas which are identified
and communicated to the government. On the part of the AASB workshop, the main motive
of the regulatory body is to depict the issues relating to the profit and they are referred to
IASB for the purpose of the consideration and interpretation of the drafts (Flannery, 2016).
In addition to this, the company also have a compilation with the Australian Accounting
Standard AASB134 interim financial reporting and the corporation’s regulation 2001. After
evaluating the performance of the company over the period of five years, Woolworths
maintained a recovering position. The recognition of the revenue is as per the AASB 15 and
the new standards that been effective from the 1st January 2017 are recognition of the
deferred Tax Assets, under AASB 112, Sale or Contribution of Assets between an Investor
and its Associate or Joint Venture, AASB 10 and AASB 128. The amendments in the AASB
16, Leases will be effective from the 1st January 2019 (Mwangi and Murigu, 2015). These
standards were not issued and the interpretations were not adopted earlier.
There was no significant item reported in the FY2017 (Plott, Roll, Seo and Zhao, 2018).
Apart from this the company has kept a cash balance of $909 million and which decreased as
compared to the previous year of $948.1. The company’s main focus is on the sustainable
performance in the food and the sales have increased by 4.5% (Woolworths, 2018). From the
analysis of the annual report the key recent projects that have been undertaken by the