Accounting and Financial Management 3: Wesfarmers Performance Report

This report provides a comprehensive analysis of Wesfarmers' financial performance, focusing on key aspects such as retail sector competition, strategies for long-term growth, and comparison with competitors like Woolworths. The analysis includes an evaluation of the industrials division, operational efficiency, and the impact of coal prices and exchange rates on earnings. The report highlights the performance of Bunnings, capital management, dividend payments, and revenue generation across various departments. It compares the financial performance of 2016 and 2017, discussing operating cash flow, payables, net tax balances, and improvements in earnings before interest and tax. The report concludes by emphasizing the positive impact of team experiences and services on customer satisfaction, overall performance, and the company's success in the current year. References to relevant financial management literature are also provided.

Running head: ACCOUNTING AND FINANCIAL MANAGEMENT
Accounting and financial management
Name of the Student:
Name of the University:
Author’s Note:

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Summary of findings:
It is expected that there seems to be prevalence of robust competition in the retail sector
and customers has the preference of value continuing. Business of Wesfarmers would experience
prosperous growth in upcoming years due to its development of several strategies focused on
delivering long-term growth.
From the analysis and evaluation of annual report of Wesfarmers, it can be seen that retail
businesses are positioned in a way that will help in focusing on improvement in service, value
and range along with delivering growth to their stakeholders. One of the challenging factor for
Wesfarmers and its competitor Woolworths has been the industrials division. Improving the
efficiency in their operations is the main focus of group and earnings in the upcoming year
would be largely dependent upon coal prices and exchange rates. Earnings growth of Woolworth
is comparatively lower than Wesfarmers group. In comparison to its competitors, Wesfarmers
has not been posting modest growth in liquor, petrol and food. Bunning of Wesfarmers has
performed much better than Woolworth’s masters. Performance of Bunning was successful as
against masters that have drained out balance sheet resulting in $ 225 million loss to business.
Price to earnings ratio of Woolworths as against Wesfarmers is much higher that will help in
attracting potential investors. Now, considering the capital management and dividend payment of
Wesfarmers and its competitors Woolworths, it can be seen that fully franked yearly dividend of
Woolworths was more.
Profit generated by Wesfarmers in year 2016 was significantly lower at 3.6 than year
2015. This has resulted in lower dividend payments to shareholders and the dividend payout ratio
was high at 89%. Value of organization has improved by its various departments such as
Bunnings, Office work, Coles, fertilizers chemicals and energy. $ 66 billion was generated as

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revenue that was distributed among its various stakeholders. The challenging trading conditions
of the group were offset by the strong performance across its various businesses. However, when
looking at the financial performance, it can be evaluated from the above discussion that
performance of previous year was remarkable as compared to current year. This is depicted in
higher operating cash flow, increase in payables and net, tax balances. It is expected that there
will be better product solutions that will lead to better customer experience. Profits from food
department also reduced in current year 2017. However, the earning before interest and tax of the
group has significant improvement in recent year that is 2017 as compared to year 2016. There
has been improvement by 13.2% in its reported net profit in current year and an increment in
cash realisation ratio by 119.7% in financial year 2017. Dividend payment has increased by
53.8% along with increase in earnings per share to $1.4. Success of organization in current year
is underpinned by improvement in team experiences and services provided to customers.
Therefore, it can be said that overall performance of group in the current year is better than
previous year.

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analysis.
Petty, J. W., Titman, S., Keown, A. J., Martin, P., Martin, J. D., & Burrow, M. (2015). Financial
management: Principles and applications. Pearson Higher Education AU.
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Commercial Banks from 2009-2013 using CAMEL Framework. International Journal of
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