HI5020 Corporate Accounting: Analyzing Woolworths and Metcash

This report provides a comparative financial analysis of Woolworths Limited and Metcash Limited, two companies listed on the ASX in the food and retailing industry. The analysis covers their financial positions, cash flows, and investments, comparing net incomes and cash in hand across different years. It examines owners' equity, cash flow statements, other comprehensive income statements, and accounting for corporate income tax. The report includes detailed figures and changes in percentages for various financial metrics, highlighting the cash flow challenges faced by Woolworths and the improvements seen in Metcash's cash position over time.

CORPORATE ACCOUNTING 1
CORPORATE
ACCOUNTING

CORPORATE ACCOUNTING 2
Executive summary:
Woolsworth and Metcash Limited are the 2 company’s undertaken for review. Both of these
companies are listed on ASX and belong to the industry of Food and retailing items (ASX,
2018).
The following report talks about the financial position of these companies, along with their
cash flows and the amount of the money that is invested in the business. Further, this report
compares their net incomes, cash in hand in various years.

CORPORATE ACCOUNTING 3
Contents
Introduction:...............................................................................................................................4
Owners’ equity:..........................................................................................................................5
Part i:.................................................................................................................................................5
Part ii:................................................................................................................................................9
Cash flow statement:..................................................................................................................9
Part iii:...............................................................................................................................................9
Part IV:............................................................................................................................................18
Part v:..............................................................................................................................................19
Other comprehensive income statement:.................................................................................20
Part vi:.............................................................................................................................................20
Part vii:............................................................................................................................................24
Part viii:...........................................................................................................................................24
Part ix:.............................................................................................................................................25
Accounting for corporate income tax:......................................................................................25
Part x:..............................................................................................................................................25
Part xi:.............................................................................................................................................25
Part xii:............................................................................................................................................26
Part xiii:...........................................................................................................................................26
Part xiv:...........................................................................................................................................26
Part xv:............................................................................................................................................27
Part xvi:...........................................................................................................................................28
References:......................................................................................................................................31

CORPORATE ACCOUNTING 4
Introduction:
The company taken into account is Woolworths Limited which deals in the food and retailing
items. The company specialises in the selling of the groceries and also sells some of the
household products. The company is one of the largest supermarket chains in the world and
functions with around 1000 stores all over the world. The company further has many
supermarket and also has some additional convenience stores which carries the same logo.
The company is very much proud of itself since it is able to provide its customers with the
most superior sort of the services and also ensures the best quality of the products. The
company offers the best products and ranges from the 96% of all of the fresh fruits and
vegetables with about 100% of the fresh meat from the Australian market.
The following is the official logo of the company:
(Woolworths, 2018).
The next company is Metcash which is again a leading distribution and a marketing company
which has the revenue of about $ 14 billion. The company is very successful when it comes
to the carrying of the business operations and is owned by the family. There are many of the
independent retailers that support in the local communities. The company is helped by them

CORPORATE ACCOUNTING 5
for restoring in the local communities. The company provides in the best merchandise and the
operational and marketing support that helps in building the food, liquor and the hardware
pillars (Metcash, 2018).
Part i:
Woolworths:
Owner's equity:
(Amounts in $
in millions)
Informatio
n
Figures in year
2017
Figures
in year
2016 Understanding Change Change in %
Contributed
equity 5,615.00
5,252.2
0
amounts invested
into the company
for business
operations
new
shares
must have
been
issued by
the
company 6.91%
Reserves 113.80
93.9
0
amounts kept
aside from the
current year’s
profits
last year’s
profits
added 21.19%
Retained
earnings 3,797.20
3,124.5
0
amounts kept
aside from the
current year’s
profits
last year’s
profits
added 21.53%
Non-
controlling
interests 350.10
311.3
0
shares beyond the
control of the
company
new non
controllin
g shares
issued 12.46%
Total 9,876.10
8,781.9
0
Metcash:
Information
Figures in
year 2017
Figures in
year 2016 Understanding Change
Change in
%

CORPORATE ACCOUNTING 6
Contributed and
other equity 1,719.30 1,626.00
amounts
invested into
the company
for business
operations
new shares
must have
been issued
by the
company 5.74%
Non-controlling
interests 8.80 8.30
shares beyond
the control of
the company
new non
controlling
shares
issued 6.02%
Retained
earnings -87.70 -259.60
amounts kept
aside from the
current years
profits
last years
profits
added -66.22%
Reserves -3.00 -5.60
amounts kept
aside from the
current years
profits
last years
profits
added -46.43%
Total 1,637.40 1,369.10
Part ii:
The following is the desired analysis:
Woolswort
h
Metcash
Limited
Particulars 2017 2017
Contributed equity 5,615.00
1,719.3

CORPORATE ACCOUNTING 7
0
Reserved shares -
Reserves 113.80
-
3.00
Retained earnings 3,797.20
-
87.70
Non-controlling
interests 350.10
8.8
0
Total 9,876.10
1,637.4
0
Cash flow statement:
Part iii:
Woolworths:
Cash flow statement:
(Amounts in
$ in millions)
Particulars 2017 2016 Understanding Change in %
Cash flows from
operating

CORPORATE ACCOUNTING 8
activities:
Receipts from
customers
65,498.90 65,
329.80
cash received in
terms of sales
revenue
generated by
the company
0.26%
Payments to
suppliers and
employees
-61,474.80 -
61,834
.50
cash paid for
the raw
materials
putchased by
the company
-0.58%
Net interest paid -234.00
-
289.30
interest paid on
the money
borrowed from
outside
-19.12%
Income tax paid -668.10
-
848.50
taxes paid on
the revenue
genarted
during the year
-21.26%
Net cash
provided by
operating
activities
3,122.00 2,
357.50

CORPORATE ACCOUNTING 9
Cash flows from
investing
activities:
Proceeds from
the sale of
property, plant
and equipment
and assets held
for sale
279.80
722.00
cash received in
return of the
fixed assets sold
by the company
during the year
-61.25%
Payments for
property, plant
and equipment –
property
development
-253.20
-
473.30
cash paid in
repsect of the
fixed assets
purchased
during the year
-46.50%
Payments for
property, plant
and equipment
(excluding
property
development)
-1,633.60 -
1,465.
00
cash paid in
repsect of the
fixed assets
purchased
during the year
11.51%
Payments for
intangible assets
-23.00
-44.60
cash paid in
repsect of the
intangible
-48.43%

CORPORATE ACCOUNTING 10
assets
purchased
during the year
Proceeds from
the sale of
subsidiaries and
investments, net
of cash disposed
200.70
15.00
cash received in
terms of sale of
the joint
ventures etc of
the company
1238.00%
Payments for the
purchase of
businesses, net of
cash acquired
-5.60
-22.70
cash paid in
repsect of the
intangible
assets
purchased
during the year
-75.33%
Payments for the
purchase of
investments
-
-1.30
cash paid for
the purchase of
the investments
-100.00%
Dividends
received
3.50
3.20
amounts
received in
respect of the
dividends
9.37%
Net cash used in
investing
activities
-1,431.40 -
1,266.
70

CORPORATE ACCOUNTING 11
Cash flows from
financing
activities
Proceeds from
issue of shares –
underwrite of
DRP
55.50
-
cash received
from the issue
of the shares
#DIV/0!
Proceeds from
the issue of
equity securities
in subsidiary to
non-controlling
interest
-
120.00
cash received
due to the issue
of shares and
securities
-100.00%
Transactions
with non-
controlling
interests
-
-12.10
amounts paid
towards the
shares that are
beyond the
control of the
company
-100.00%
Proceeds from
borrowings
184.10
628.50
amounts
received from
the money
borrowed
-70.71%

CORPORATE ACCOUNTING 12
during the year
Repayment of
borrowings
-1,406.50
-
994.10
cash paid for
the money
borrowed by
the company
41.48%
Dividends paid -540.90 -
1,184.
80
cash paid on
the shares
issued of the
company
-54.35%
Dividends paid to
non-controlling
interests
-21.50
-32.40
cash paid
towards the
interest beyond
control of the
company
-33.64%
Net cash used in
financing
activities
-1,729.30 -
1,474.
90
Net decrease in
cash and cash
equivalents
-38.70
-
384.10
Total of the
activities
during year
Cash and cash
equivalents at
start of period
955.40 1,
340.10
Opening cash
balance