Detailed Financial Analysis of Wesfarmers: 2017-2018 Report

This report provides a detailed financial analysis of Wesfarmers, focusing on its consolidated financial statements from 2017-2018. The analysis includes an evaluation of the company's financial performance, with projections for the years 2019, 2020, and 2021, based on certain assumptions and parameters. It explores the financial risks associated with these projections and the assumptions made during the process. The report examines the company's revenue, expenses, and overall growth, considering both internal and external factors that could impact its financial outcomes. It emphasizes the importance of consistent growth, the role of management in maintaining performance, and the impact of environmental and internal changes on the business's financial health. The conclusion summarizes the effectiveness of the financial statements and the projected growth of Wesfarmers, as well as the management's decisions based on risk and environmental sustainability.

Running head: ACCOUNTING FINANCIAL ANALYSIS
ACCOUNTING FINANCIAL ANALYSIS
Name of the student:
Name of the university:
Author Note:

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Table of Contents
Introduction:...............................................................................................................................2
Discussion:.................................................................................................................................3
In Response to A....................................................................................................................3
In Response to B....................................................................................................................5
In Response to C....................................................................................................................6
Conclusion..................................................................................................................................8

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Introduction:
The assignment is based on the detailed analysis of the consolidated financial
statements of the company which has been taken from the annual report of Wesfarmers for
the year 2017-2018. Based on the current financial performance of the business the
assumptions made regarding the projection of the year 2019, 2020 and 2021. The financial
risks and the parameters of the assumptions made during the projection of the process has
been made in the conducted analysis.

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Discussion:
In Response to A
The consolidated financial statement of Wesfarmers have been depicted in the
conducted analysis which has been taken from the annual report of the year 2017-2018. The
financial analysis has been performed for the next three years which is 2019, 2020 and 2021.
The basic information of the Wesfarmers have been taken from the annual report of the year
2017-2018 (Welford, 2016). The actual results of the financial statements of the company
have been evaluated based on the absolute changes and the percentage change as per the
financial statement of the company. Based on the current performance of Wesfarmers, the
interpretation of the financial analysis of the company have been made accordingly (Kaplan
& Atkinson, 2015). There are certain assumption made during the projection of the financial
statement of Wesfarmers.

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The assumption which is made while projecting the financial performance for the next
three years which are the 2019, 2020 and 2021. The projection is made as per the assumption
on the average basis based on the next year (Kranacher & Riley, 2019). The assumption made
while projecting the consolidated financial statement for the year 2019, 2020 and 2021 is that
the average in this case is based on the average of absolute percentage change. It is assumed
that there will be consistent growth in the consolidated financial statement of the company.
The upper level management of the company will adopt some of the strict policies in order to
maintain the consistent growth based on the current performance of the company. The
decision which is made by the upper level management of Wesfarmers is that it is significant
for the company to maintain the current growth (Gitman, Juchau & Flanagan, 2015).
In Response to B
The projection in this case is simply based on the current business parameters of the
company and further the projection are made accordingly in that scenario. There are certain
risk which are associated with the current projection where the board and the management of
the company cannot certain the environmental factors associated with such kind of projection

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made on the consolidated financial statement of the company. Due to the rapid change in the
environmental factors it is always difficult for the upper level management of Wesfarmers to
certain the actual outcome as per the budgeted projection made. There are also certain risks
associated in the business if there is change in the internal management of the company. If
there is a change in managers or the internal management system, due to the poor
management system then the company faces lots of difficulty in maintaining the performance
of the company (Malmi, 2016).
In Response to C
The projection which is made in every year is quite comparable based on the
assumption made in the next three years. The assumption made in case of the revenue and
expenses based on the average basis where as per the analysis it can be interpreted that the
revenue of the company will increase along with the expenses of the company will also
increase on an average basis. In this way the growth of the company will take place by
assuming that there is sustainability in the environmental aspects of the company. The
assumption is made on the current business as per the present environmental scenario of the
business of the company (Libby, 2017).
The projection which is made regarding the company is right as it involves the current
competitors and technological advancement which affects the prospects of the business. The
company will try to maintain the current growth and the present shareholders of the company
(Otley, 2016). The target of the company is to increase or rather the potential shareholders of
the company. The growth of the company depends on the attracting the potential stakeholders
of the company in order to enhance the current business line or the production process of the
company. Due to the consistent increase the production of the company the business will
automatically progress. The assumption in that case is appropriate as there is consistent
growth in the production process of Wesfarmers. The current business of the company is

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good as per the profitability and efficiency, the management further needs to maintain the
growth in that case. The projection of the company made is right based on certain changes
and on all above the company’s mission and key priorities of the company is consistent on
the other hand (Schaltegger & Burritt, 2017).

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Conclusion
From the above discussion it can be concluded that the existing consolidated financial
statement of the company is effective and further the projection of the Wesfarmers shows
growth in the detailed analysis of the financial statement. As per the mission and vision
statement of the company, it is assumed that the management system of the company will
maintain a consistent growth over the coming year and based on the current parameters of the
company. The decision made by the upper level management of the company is based on the
current risk and environmental sustainability of the Wesfarmers.

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References
Gitman, L. J., Juchau, R., & Flanagan, J. (2015). Principles of managerial finance. Pearson
Higher Education AU.
Kaplan, R. S., & Atkinson, A. A. (2015). Advanced management accounting. PHI Learning.
Kranacher, M. J., & Riley, R. (2019). Forensic accounting and fraud examination. John
Wiley & Sons.
Libby, R. (2017). Accounting and human information processing. In The Routledge
Companion to Behavioural Accounting Research (pp. 42-54). Routledge.
Malmi, T. (2016). Managerialist studies in management accounting: 1990–
2014. Management Accounting Research, 31, 31-44.
Otley, D. (2016). The contingency theory of management accounting and control: 1980–
2014. Management accounting research, 31, 45-62.
Schaltegger, S., & Burritt, R. (2017). Contemporary environmental accounting: issues,
concepts and practice. Routledge.
Welford, R. (2016). Corporate environmental management 1: systems and strategies.
Routledge.

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Appendices

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