Comprehensive Financial Analysis Report of Woolworths Group 2016-2017

This report offers a comprehensive financial analysis of the Woolworths Group, focusing on the fiscal year 2016-2017. It begins with an overview of the company's history, operations in Australia and New Zealand, and director's report, including key personnel like Gordon Cairns and Brad Banducci. The report then delves into the auditor's opinion and the financial statements, including income statements, cash flow statements, and balance sheets. A significant portion of the report is dedicated to ratio analysis, covering profitability ratios (net margin, gross margin), liquidity ratios (current ratio, quick ratio), asset turnover, and leverage ratios. The analysis highlights trends in revenue, net income, cash flow, and retained earnings, along with the impact of past decisions and market conditions on the company's financial performance. The report concludes with a bibliography of cited sources.

Financial Accounting

Contents
Part 1...........................................................................................................................................................3
Part 2...........................................................................................................................................................3
Part 3...........................................................................................................................................................3
Part 4...........................................................................................................................................................5
Part 5...........................................................................................................................................................6
Part 6...........................................................................................................................................................7
Part 7...........................................................................................................................................................8
Part 8...........................................................................................................................................................9
Profitability ratios....................................................................................................................................9
Liquidity ratios......................................................................................................................................10
Asset turnover ratio...............................................................................................................................12
Leverage ratios......................................................................................................................................13
Bibliography..............................................................................................................................................14

Part 1
The current assignment relates to a company Woolworths group which is currently working out
its business operation in the geographical region of Australia and New Zealand. The company
was founded way back on 22nd September 1924. The current headquarter location of the
company is situated in the Bella Vista, New South Wales, Australia. The Woolworths group is
currently trading out in the market of retail industry, along with that it has diversified its business
operation in the market segment of petroleum, liquor through its supermarkets and retail chains.
As far as history of the group is concerned the company started its working in the name of
"Wallworths Bazaar". Over the period of time with the innovative ideas of the key management
of the group the company has flourished and expanded its business operations. The company
during the period has made certain acquisitions and mergers that supported the group operations
to expand to its current height (woolworthsgroup, 2017). Currently the company is holding the
second largest positioning in the geographical region of Australia while taking revenue into
consideration.
For the current assignment purpose analyst has taken the financial year 2016-17 into
consideration for making financial research and analysis.
Part 2
While analysing the content page of the report it has been observed that the analyst has focused
on the financial statement analysis part. The researcher has considered the opinion of the auditor
and the summary of the director report as a part of the current study and analysis. While utilising
the ratio analysis and other summary part of the report the financial health of the company is
determined.
Part 3
Directors are the individuals or the group of individual who works out as a management body in
assisting the group operation of the company. They are the key employees of the company who
works on the behalf of key management of the group. In the present part of the assignment
report analyst has taken out a brief summary on the director report extracted from the annual

report prepared by the company. As per the data based out upon the annual report of the
company the researcher discussed out the key directors associated with the company. Some of
them are displayed as follows-
Image 1 – Director Body of Woolworths group company
Reference – (woolworthsgroup, 2017)
No. Name of director Educational
Qualification
Positioning in the
company
1. Gordon Cairns MA (HONS) Chairman
2. Brad Banducci MBA, LLB,
BCOMM (ACC)
Managing director and
chief executive officer

3. Jillian Broadbent BA (MATHS &
ECONOMICS)
Independent
non-executive director
4. Michael Ullmer BSC (MATHS)
(HONS), FCA, SF
FIN
Independent
non-executive director
The above mentioned list showcases the list of various directors of the Woolworths group of
Australia along with their educational qualification and positioning in the company. As per the
director report stated by the chairman Gordon Cairns and Managing Director of the company Mr.
Brad Banducci it mentioned about the fact that company is running out its business operations in
the geographical location of Australia and New Zealand with around 3746 retails stores and more
than around 200,000 employees working for the business organsiation. The report also consists
of information that there is appointment of the company secretary as Marcin Firek during the
financial year 2017 (woolworthsgroup, 2017). Apart from that it is been mentioned along with
the report that the current company Woolworths group is meeting out all its legal and compliance
requirements. Other than that as a part on the director report there is mentioning of the
declaration that directors indemnify the company on the acts and deeds that are done by them on
the personal basis which harms the company in any manner. As in overall review of the report it
has been observed by the analyst that the director report is a summary of the relevant information
forming part of the report, for instance it includes information of mentioning of auditor report,
details of dividend, remuneration reports and auditors declaration.
Part 4
Auditors are the key persons which are appointed by the management of the group in order to
verify the accuracy and authenticity of the financial statements presented by the company’s
management. The auditor present their final report based on their workings and presents them
before the members of the company. The auditor gave its opinion in accordance to the
Corporations Act 2001 and Australian accounting standards. The firm Deloitte Touche Tohmatsu
is the group auditor of the Woolworths group. The audit partner of the group presented the true

and fare view on the financial statements presented prepared by the management of the
company. The auditor as the part of its annual report gave specific reasons which are responsible
for the basis of its opinion. The auditor in its opinion gave declaration on being independent
without a biased approach as per the corporation act 2001 (woolworthsgroup, 2017).
Part 5
WOOLWORTHS LTD (WOLWF) INCOME STATEMENT
Fiscal year ends in June. (AUD in
millions )
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Revenue 58674 60952 60868 58276 55669
2013-06 2014-06 2015-06 2016-06 2017-06
53000
54000
55000
56000
57000
58000
59000
60000
61000
62000
58674
60952
60868
58276
55669
Revenue
Revenue
The revenue of the Woolworths group after attaining a peak benchmark in the year ending June
2014 witnessed a sharp downfall over the period of time (morningstar, 2017). The reason of
decline in the revenue was the poor decision taken by the company management in the recent
past. The company placed its huge funds in opening hardware stores which turned out to be a

failure prospect. In addition to this other ethical issues occurred with the company which
affected its overall sales performance (Letts & Ong, 2016).
Part 6
WOOLWORTHS LTD (WOLWF) Statement of CASH FLOW
Fiscal year ends in June. (AUD in millions) 2013-06 2014-06 2015-06 2016-06 2017-06
Net cash provided by operating activities 2720 3473 3345 2358 3122
2013-06 2014-06 2015-06 2016-06 2017-06
0
500
1000
1500
2000
2500
3000
3500
4000
2720
3473
3345
2358
3122
Net cash provided by operating
activities
Net cash provided by
operating activities
From the above charts displaying net cash flow from operation of Woolworth’s group it has been
observed that company is witnessing out a huge fluctuation in particular case scenario. From the
last year’s situation of downfall in the cash flow company has improved its positioning.

Part 7
The company has considerable debt proportion in its capital structure portfolio but the
Woolworths organsiation after getting itself recovered from the adverse situation reduced the
debt content to considerable extent.
Retained Earnings of Woolworths
WOOLWORTHS LTD (WOLWF) BALANCE SHEET
Fiscal year ends in June. AUD in millions except
per share data.
2013
-06
2014
-06
2015
-06
2016
-06
2017
-06
Retained earnings 4661 5423 5830 3124 3797

2013-06 2014-06 2015-06 2016-06 2017-06
0
1000
2000
3000
4000
5000
6000
7000
4661
5423 5830
3124
3797
Retained earnings
Retained earnings
The company suffered a lot on its retained earning part due to heavy losses in the previous year
but with the gradual recovery process of the company improved its overall workings. This
bought the retained earnings trend line on track.
Part 8
Profitability ratios
Profitability
ratios
Formulae 2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Revenue AUD
Mil
58,67
4
60,95
2
60,86
8
58,27
6
55,66
8
Net Income AUD
Mil
2,259 2,451 2,146 -1,234 1,534
Net Margin % Net Income / Revenue *
100
3.85 4.02 3.53 -2.12 2.75

Gross Margin % Gross profit / Revenue
*100
26.9 27 27.1 26.8 28.6
2013-06 2014-06 2015-06 2016-06 2017-06
-3
-2
-1
0
1
2
3
4
5
3.85
4.02
3.53
-2.12
2.75
Net Margin %
Net Margin %
The profitable of the company has shown a declining trend in the year ending 2016. But later on
with the improvement in the overall policies of the company the performance of the company
has improved over the period of time.
Liquidity ratios
Liquidity analysis 2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Cash & Short-Term
Investments
4.06 3.86 6.01 4.27 4.04
Accounts Receivable 3.14 2.55 2.3 1.84 1.79

Inventory 18.9 19.39 19.23 19.4 17.81
Other Current Assets 1.88 3.84 2.69 6.09 6.89
Total Current Assets 27.98 29.64 30.24 31.6 30.52
Total Current Liabilities 30.86 31.23 36.19 38.26 38.51
Ratio Formulae
Current
Ratio
Current
assets /
Current
liabilities
0.91 0.95 0.84 0.83 0.79
Quick
Ratio
Quick assets /
Current
liabilities
0.23 0.21 0.23 0.16 0.15
Reference - (InvestingAnswers, n.d.)

2013-06 2014-06 2015-06 2016-06 2017-06
0
0.05
0.1
0.15
0.2
0.25
Quick Ratio
Quick Ratio
2013-06 2014-06 2015-06 2016-06 2017-06
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
Current Ratio
Current Ratio
Both current ratio and quick ratio displayed a declining trend which showcases the reducing
capabilities of the Woolworths group to pay out its current debt on timely basis.
Asset turnover ratio
Efficiency 2013-
06
2014-
06
2015-
06
2016-
06
2017-
06

Fixed Assets Turnover 6.23 6.47 6.19 6.36 6.67
Asset Turnover 2.68 2.62 2.46 2.39 2.4
The turnover ratio of the company is somewhat constant over the period of time. Not much of
relevance is required to be catered in the particular area.
Leverage ratios
Leverage / Financial
Health
2013-
06
2014-
06
2015-
06
2016-
06
2017-
06
Financial Leverage 2.46 2.36 2.34 2.77 2.41
Debt/Equity 0.47 0.4 0.28 0.46 0.29
The Debt portion of the company has been considerably reduced after the revival of performance
from the adverse scenario situation witnessed in the financial statements year ending June 2016
(morningstar, 2017).

Bibliography
InvestingAnswers, n.d. Current Ratio. [Online] Available at:
http://www.investinganswers.com/financial-dictionary/ratio-analysis/current-ratio-1095.
Letts, S. & Ong, T., 2016. Woolworths posts $1.2b loss; food, petrol sales slump. [Online]
Available at: http://www.abc.net.au/news/2016-08-25/woolworths-results/7783378 [Accessed 15
Aug 2017].
morningstar, 2017. Woolworths Ltd WOLWF. [Online] Available at:
http://financials.morningstar.com/ratios/r.html?t=WOLWF [Accessed 16 Aug 2017].
woolworthsgroup, 2017. annual-report-2017. [Online] Available at:
https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf [Accessed 10
Sept 2017].