Question-   Shareholders of Wesfarmers

Solution-

Answer :

 

  1. 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.
  2. Liquidity – current ratio (current assets / current liabilities)

                                                         25,425,000,000 / 16,081,000,000

                                               = 1.581058392

                                                                     = 1.6:1 or 160%

          Gearing – debt to equity ratio (total liabilities / total equity)

    16,081,000,000/ 9,344,000,000

                 = 1.720997432

       = 1.7:1 or 170%

          Profitability – gross profit ratio (gross profit / sales)

    1,622,000,000/30,753,000,000

      = 0.05274282184

      = 0.05:1 or 5%

                       

           Efficiency – expense ratio (total expenses / sales)    

                                            28,976,000,000/30,753,000,000

                                                 =0.9422170195

                                                                     =0.94:1 or 94%

  1. 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.

  1. 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.
  2. 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.
  3. 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.
  4. It is important for Wesfarmers to manage the credit and liquidity risks, so they do not get into much into debt.
  5. 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.
  6. 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.
  7. Two limitations of this Wesfarmers report is
  •  Large and long to much writing.
  • Difficult to understand.

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