Financial Statement Analysis of Woolworths Limited

RUNNING HEAD: FINANCIAL STATEMENT ANALYSIS
FINANCIAL STATEMENT ANALYSIS

FINANCIAL STATEMENT ANALYSIS 1
Contents
WOOLWORTHS LIMITED........................................................................................................................2
INTRODUCTION.................................................................................................................................2
BACKGROUND...................................................................................................................................2
COMMON SIZE AND HORIZONTAL ANALYSIS....................................................................................3
CASH FLOW ANALYSIS.....................................................................................................................11
LIQUIDITY ANALYSIS........................................................................................................................12
INCOME ANALYSIS...........................................................................................................................13
CAPITAL STRUCTURE ANALYSIS.......................................................................................................15
COVERAGE ANALYSIS.......................................................................................................................16
GROWTH AND RISK ANALYSIS.........................................................................................................16
CONCLUSIONS.................................................................................................................................17
REFERENCES....................................................................................................................................19

FINANCIAL STATEMENT ANALYSIS 2
WOOLWORTHS LIMITED
INTRODUCTION
In this assignment operating and financial health of Woolworths Limited is analysed
which is registered in Australian stock market. The chosen company Woolworths limited of
Australia covered under Supermarket or Grocery Store Chain. The financial performance is
evaluated and assessed considering latest last six years. The data required for the analysis is
extracted from the Data Analysis Premium. This assignment covers background and mission
of the company and the assessment of the financial health is based on common size and
horizontal analysis, cash flow analysis, liquidity analysis, income analysis, capital structure
analysis, key coverage ratios and growth and risk analysis and on the basis of mentioned
criteria conclusions are drawn that the Woolworths limited are fundamentally better company
and it is advised to existing investors should continue to hold the stock and prospective
investors should consider buying the stock.
BACKGROUND
The Woolworths Limited was opened in the year 1924 in Sydney’s Imperial Arcade.
The company covered under Food and staples Retailing industry. It is one of the largest
company in terms of broad retail interest across New Zealand and Australia. It was
approximately more than 92 years of existence and around 20 years of being listed in
Australian market. Its stock ticker is WOW (Woolsworth Limited, 2018). The company
mostly specialises in grocery products such as vegetables, fruits, packaged foods etc. also
deals in selling magazines, health and household products, pet supplies, stationery items etc.
Further the company is also a largest retailer of liquor. In addition to above, company also
owns petrol divisions and also offers financial services in terms of credit cards, gift cards etc.
The company has approximately 1000 stores through Australia with nearly 202000
workforces. The Woolworths Limited works with an objective of serve exceptional services
and products to the customers and also deliver shareholders better value. The main highlight

FINANCIAL STATEMENT ANALYSIS 3
of Woolworths group in 2017 financial year was an enhancement in customer scores in
Australian food which has resulted in transactions force all over the year. Woolworths
Limited created the culture that cheers expansion, image and reward boldness.
MISSION
There are five main aims and objectives of the company (Woolsworth Limited, 2018):
 Building Customer’s value by providing best class shopping experience.
 Empowering portfolio business to maximise shareholders return.
 Another objective is to become a lean retailer through system excellence.
 To develop solid brand with the family-friendly culture.
 Better services only with reduced costs and changed values.
COMMON SIZE AND HORIZONTAL ANALYSIS
 Horizontal Analysis:
Profit and loss statement:
Item 2017 (%) 2016 (%) 2015 (%) 2014 (%) 2013 (%)
Operating Revenue 0.41% 5.11% 9.79% 9.94% 5.83%
Other Revenue 316.72% 373.55% 379.52% 327.65% 336.35%
Total Revenue Excluding Interest 0.74% 5.50% 10.18% 10.28% 6.18%
Operating Expenses 3.70% 8.42% 10.97% 11.30% 6.97%
EBITDA -30.46% -25.34% 1.82% -0.50% -2.17%
Depreciation and Amortisation 14.78% 15.70% 29.27% 12.74% 9.26%
EBIT -40.66% -34.59% -4.37% -3.48% -4.74%
Interest Revenue -100.00% -100.00% -100.00% -63.43% -17.16%
Interest Expense -39.18% -22.84% -19.95% -12.72% 28.84%
Pre-tax Profit -41.23% -36.10% -3.71% -3.11% -7.78%
Tax Expense -26.51% -19.48% 18.43% 19.40% 12.38%
Net Profit after Tax Before Abnormals -45.97% -41.47% -10.85% -10.38% -14.29%
Abnormals -100.00% 71.27% -23.91% -100.00% -76.59%
Abnormals Tax #DIV/0! #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Reported NPAT After Abnormals -12.32% -229.20% 17.62% 35.29% 24.62%
(Data Analysis Premium, 2018).
Balance Sheet:
Item 2017 (%) 2016 (%) 2015 (%) 2014 (%) 2013 (%)
Current Assets