- The majority shareholders of Wesfarmers the largest shareholder is an HSBC Custody Nominees (Australia) Limite with 22.81% followed by J P Morgan Nominees Australia Pty Limited with 16.11%, Citicorp Nominees Limites with 5.29%, National Nominees Limited with 2.39%, BNP Paribas Nominees Pty Ltd (Agency Lending DRP A/C) is 1.85% and more.
- Liquidity – current ratio (current assets / current liabilities)
25,425,000,000 / 16,081,000,000
= 1.6:1 or 160%
Gearing – debt to equity ratio (total liabilities / total equity)
= 1.7:1 or 170%
Profitability – gross profit ratio (gross profit / sales)
= 0.05:1 or 5%
Efficiency – expense ratio (total expenses / sales)
=0.94:1 or 94%
- The current ratio for Wesfarmers is 1.6:1. The suggested ratio is 2:1. This means that Wesfarmers is doing ok and does not have to many cash flow problem.
The debt-to-equity ratio for Wesfarmers is 170%. The suggested presented is 100% or more. This means that Wesfarmers is doing good on debt-to- equity ratio.
The gross profit ratio for Wesfarmers is 5%. The suggested percentage is 30%. Wesfarmers are not doing well in gross profit ratio.
The expense ratio for Wesfarmers is 0.94:1 or 94%. So, this mean Wesfarmers have lot of expenses, so Wesfarmers need to spend less money in order to save.
- Wesfarmers have a revenue retch up to 30,846 M and the total of expenses are 28,976M. Wesfarmers comprehensive loss for the year, net of tax, 70M and have the total comprehensive income for the year, 1,627M.
- When a business uses its own income as a source of capital to fund a new venture or make profits, this is known as internal finance. When a business obtains funds from outside sources, such as a bank, it is referred to as external funding. Wesfarmers uses retained earnings as an example of internal finance. Lease contracts are an example of Wesfarmers' use of external financing.
- Wesfarmers have a lot of financial commitments. These include raw materials and inventory including equipment, freight and other related expenses, occupancy-related expenses and impairment expenses.
- It is important for Wesfarmers to manage the credit and liquidity risks, so they do not get into much into debt.
- The major factors that influence Wesfarmers performance are how well all this smaller company are performant. Others factor include the economy and issue sus as covid-19.
- Wesfarmers need to always make a profit to keep their shareholder happy. The long-term goal of Wesfarmers is also to provide a satisfactory return to shareholders. This is measure by comparing Wesfarmers’ TSR against that achieved by the broader Australian market.
- Two limitations of this Wesfarmers report is
- Large and long to much writing.
- Difficult to understand.
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