HI5002: Finance for Business - Company Performance Analysis

This report, prepared for the HI5002 Finance for Business course at Holmes Institute, analyzes the financial performance of a company, likely Woolworths Group, focusing on non-current assets, scenario analysis, and bond issuance. The report examines the company's property, plant, and equipment, detailing asset values and depreciation methods. It includes a scenario analysis, presenting best and worst-case scenarios to assess the impact of various factors on the company's net present value. Furthermore, it details the company's recent bond issuance, specifically a green bond, highlighting the amount raised and its purpose. The analysis uses financial statements from 2016 to 2018 and includes references to support the findings.

Running head: FINANCE FOR BUSINESS
Finance for Business
Name of the Student:
Name of the University:
Author’s Note:

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Table of Contents
Non-Current Assets.........................................................................................................................2
Scenario Analysis............................................................................................................................3
Bond Issuance..................................................................................................................................3
References........................................................................................................................................5

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Non-Current Assets
The key non-current assets that were reported by the company in the financial statement of
the company for a set of three years were primarily Property Plant & Equipment and Intangible
Assets of the company. The trend period for which the non-current assets of the company were
analyzed were from the year 2018-2016 (Woolworthsgroup.com.au 2019).
Property Plant and Equipment: The reported value of the property plant and equipment was
around $8263 Million in the year 2016 and the same has increased consistently to around $9,026
Million in the year 2018. The reason for the increase in the reported value of the property plant
and equipment of the company has been primarily due to the increased spending of around
$1,848 million in the year 2018 (Woolworthsgroup.com.au 2019). The depreciation method that
has been applied by the company for the purpose of depreciating the asset was the straight line
method that is measured at cost value less any accumulated depreciation that is associated with

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the asset. A key snapshot of the associated accounting policies followed for Property Plant and
Equipment is shown below:
Scenario Analysis
The scenario analysis has been done by taking various factors that would be determining
the overall results that would be associated with the investment project done.
Worst Case Scenario: If the sales price of the offered product falls and the associated units that
the company will be offering falls by around 20% then the same would be decreasing the cash
inflows that the company would be receiving. On the other hand rise in the variable and fixed
costs of the company would be affecting the net present value generated. After taking all the
changes in the variables that is associated in the worst case it is expected that the NPV in worst
case will be around -$3,595,852.
Best Case Scenario: If the sales price of the offered product will increase along with the
increase in the unit size then the same would be positively affecting the cash flows of the
investment project. The variable cost and fixed cost both were seen to be consistently decreasing
in the trend period followed for the company. It is important to note that the net present value
that would be generated in the case was evaluated to be around $26,446,992.
Thus, it can be well concluded that in best case scenario the company will be earning an
generating a consistent wealth for the investors of the company.

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Bond Issuance
The latest Bond issuance that has been done by the company in the form of Green Bonds
which was issued on April 10 2019. The total amount that was raised by the Woolworths Group
from the issuance of Green Bond was around $400 million. The bond was offered to the general
public on a public offering basis and the bond replaced the corporate bond which was about $500
million that was reported in the financials of the company. No material or significant changes
were seen in the capital structure of the company it was just replacement of bond classification
(Woolworths' green bonds trade strongly in after-market. 2019). A key snapshot of the green
bond is shown below showing the purpose of green bond and the framework of bond.

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References
Woolworths' green bonds trade strongly in after-market. 2019. Australian Financial Review.
Retrieved 28 September 2019, from
https://www.afr.com/companies/financial-services/woolworths-green-bonds-trade-strongly-in-
after-market-20190415-p51eda
Woolworthsgroup.com.au. 2019. [online] Available at:
https://www.woolworthsgroup.com.au/content/Document/190401%20Green%20Bond
%20Framework%20(final).pdf [Accessed 28 Sep. 2019].
Woolworthsgroup.com.au. 2019. [online] Available at:
https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf [Accessed 28
Sep. 2019].
Woolworthsgroup.com.au. 2019. [online] Available at:
https://www.woolworthsgroup.com.au/icms_docs/195396_annual-report-2018.pdf [Accessed 28
Sep. 2019].