Financial Performance Report: Wesfarmers Group 2016-2017 Analysis

This report provides a comprehensive analysis of Wesfarmers Group's financial performance for the years 2016 and 2017. It examines key financial metrics, including profit after tax, revenue, net debt, operating cash flows, and return on equity. The report highlights significant changes, such as the substantial increase in profit after tax in 2017, and analyzes the factors contributing to these changes. It also includes an assessment of the company's current ratio and provides an investment perspective based on the financial data. The report uses data from the Wesfarmers Annual Report 2017 to support its findings, offering a detailed overview of the company's financial health and performance over the specified period.

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Table of Contents
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REFERENCES..................................................................................................................................6

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13.
Overview
Wesfarmers group is a publicly listed based Australian company dealing in diverse
businesses. These cover Liquor, hotels, office supplies, home improvement, supermarkets,
department stores and more. In 2017 financial year approximately 515000 were the
stockholders and 223000 were the employees (Wesfarmers, 2017).
The report mainly includes the Wesfarmers financial position in 2017 comparing with 2016
financial year which consists all ordinary and extraordinary items.
Wesfarmers Group
Particulars 2017 2016
$M $M
Profit after tax 2873.0 407.0
This above table shows that profit after tax of Wesfarmers Group showing an increment of $
2466 million (that is 605% above) in 2017 financial year as compared to 2016 reporting year.
This income of company is consisted with all the ordinary and exceptional items. Further the
company has also reported revenue amounting $68444 million in 2017 year in comparison to
2016 which was $ 65981 million. There is an increment of $ 2463 million in 2017 with that
of the previous financial year (2016).
The primary objective of the concern is to provide desired yields to the investors by
engendering strong cash flows.
Wesfarmers has gained below highlighted points in financial year 2017. These are:
 In year 2017, The net debt has decreased to $ 4809 million from $ 7103 million in
2016 which means balance sheet have been strengthen by 32.29% in 2017.

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 In 2017, Operating cash flows were $ 4226 million while in 2016 it was $ 3365
million which means $ 861 million was above from 2016.
 Net capital expenditure was lowered by 23.1% from financial year 2016.
 Return on equity shareholders were 3.6% above from 2016 reporting period.
 Company has declared 223 cents dividend in 2017 financial year whereas 186 cents
were declared in 2016 reporting period.
 Finance costs and tax expenses were increased to 62.8% as compared to 2016
financial year.
 Earnings per share were increased to 254.7 cents in 2017 while it was 36.2 cents in
2016.
Wesfarmers Revenue seat factor of 2017:
In 2017, Wesfarmers group has a revenue of $ 68444 million while $ 65981 million in 2016
which resulted an increment in 600 times.
Dividend per share:
DPS was 223 cents in 2017 whereas in 2016, it was 186 cents.
Return on capital Employed:
In 2017, ROCI was 9.7% whereas in 2016 ROCI was 11.2%.
Net Assets:
In 2017, Net assets were $ 23941 million whereas in 2016 net assets were $ 22949 million.
Earnings per share:
In 2017, EPS was 254.7 cents and in 2016 it was 36.2 cents.

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Current Ratio is calculated to find out the short-term soundness of the company. It is
calculated as follows: Current Assets ÷ Current Liabilities.
Particulars 2017 ($ M) 2016 ($ M)
Current Assets 9667 9684
Current Liabilities 10417 10424
Current Ratio [Current Assets/Current
Liabilities]
0.93 0.92
Comment:
From the basis of above ratio, it has been seen that its short-term solvency is not good
because Wesfarmers current assets are less as compared to current liabilities in both years i.e.
2017 and 2016.
Financials of Wesfarmers
Particulars 2017 2016
$M $M
Total Revenue 68444.0 65981.0
EBIT 4402.0 1346.0
PAT 2873.0 407.0

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Total Revenue EBIT PAT
0
10000
20000
30000
40000
50000
60000
70000
80000 68444
4402 2873
65981
1346 407
Wesfarmers Group
2017 2016
Axis Title
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Conclusion
As an investment advisor, it should be noted that in 2017, the company has earned
magnificent profits in diverse areas. Further it can be said that Wesfarmers is very good for
long term investment because short term assets are not sufficient to meet its dues.

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REFERENCES
Wesfarmers Annual Report. (2017). Wesfarmers Annual Report 2017 . Retrieved on 08 May
2017 from www.wesfarmers.com.au/docs/default-source/default-document-library/2017-annual-
report.pdf
.