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Woolworths Financial Perfomance Case study

 Woolworths Economic Perfomance Case study Essay

HSC Business Research

Monetary Statement Research

Process 1:

Fluidity – The existing Ratio sama dengan - Current ratio sama dengan Current Assets/ Current Financial obligations

2013:

Total current assets = 6226. 1

Total current debts = 6866

Total current assets as well as Total current liabilities

=

6226. 1/6866 = 0. 9068016312

sama dengan 0. on the lookout for (1dp)

2012:

Total current assets sama dengan 5802. 1

Total current Liabilities sama dengan 6766. 2

Total current assets as well as Total current liabilities

=

5802. one particular / 6766. 2 = 0. 8575123408

= zero. 86 (2dp)

Liquidity levels have better a satisfactory amount meaning Woolworths are readily available to repay their short-term liabilities by a better less difficult.

Figures coming from: http://www.investing.com/equities/woolworths-limited-balance-sheet

Gearing (leverage) = - Debts to value (gearing) ratio = Total liabilities/ Owners Equity

2013:

Total debts = 13221. 8

Owners equity = 9028. 5

Debt to equity (gearing) ratio sama dengan total liabilities / Owners Equity =

13221. almost 8 / 9028. 4 sama dengan 1 . 46446768

= 1 ) 5% (1dp)

2012:

Total Liabilities = 13392. on the lookout for

Owners Fairness = 8188. 2

Debt to fairness (gearing) proportion = total liabilities / Owners Value =

13221. 8 as well as 8188. 2= 1 . 614738282

= 1 . 6% (1dp)

The gearing levels offers deteriorated from 2012 to 2013 by 0. 1% meaning there may be less risk for investors yet also less a chance of higher profits.

Numbers from: http://www.investing.com/equities/woolworths-limited-balance-sheet

Profitability sama dengan - Major Profit Percentage = Low Profit/ Sales

2013:

Low profit sama dengan 15603. 8

Sales = 58674. you

Gross revenue ratio sama dengan Gross profit / Revenue

=

15603. 8 as well as 58674. one particular = 0. 2659401678

= 0. dua puluh enam (2dp)

sama dengan 26%

2012:

Gross income = 14461. 0

Sales = 54916. 0

Low profit rate = Gross profit as well as Sales

sama dengan

14461. zero / 54916. 0 sama dengan 0. 2633294486

= 0. 26 (2dp)

= 26%

The characters over the two financial years has remained similar meaning Woolworths has maintained its success of pricing, sales, discount rates and valuation of share. Figures coming from: http://www.investing.com/equities/woolworths-limited-income-statement

Productivity = -- Expense Rate = Total Expenses/ Product sales

2013:

Total expenses sama dengan 55459. 3

Sales = 58674. you

Expense Rate = Total Expenses/ Revenue

=

55459. a few / 58674. 1 = 0. 945209215

= 0. 95 (2dp)

2012:

total expenses sama dengan 51851. two

Sales sama dengan 54916. zero

Expense Ratio = Total Expenses/ Sales

=

51851. 2 / 54916. zero = zero. 9441911283

= 0. 94 (2dp)

The Expense ratio has already established a slight improvement from 2012 to 2013 meaning the firm provides improved their ability to make use of its resources effectively in ensuring monetary stability and profitability.

Numbers from: http://www.investing.com/equities/woolworths-limited-income-statement

Task two:

Woolworths Limited (ASX: WOW) can be hardly an organization that needs an introduction to traders; as Australia's largest dealer with a marketplace capitalisation of $42 billion (income claims 12/13) it is certainly on the radar of most shareholders. An evaluation of Woolworths financial overall performance over the last two financial years show that the firm are improving their very own figures by raising or keeping all their Liquidity, Gearing, Profitability or Efficiency regular. This research can help give insights in wether it is just a smart decision to buy stocks in Woolworths. Looking into the firm's financial performance and proposed financial strategy a great interpretation may be made for the risk and reliability of investing in Woolworths.

Liquidity complements with the capacity for companies to manage short-term funds requirements. The danger involved in trading into a firm with low liquidity amounts is that the organization may knowledge cash flow challenges. The inability for e. g. Woolworths being unable to pay out their immediate liabilities can then later bring about Woolworths becoming insolvent, which means they are struggling to pay financial obligations altogether after they fall credited. If Woolworths were unable to pay these debts, this could mean they would have to borrow money, which will affect (deteriorate) their...

Sources: Anon, (2014)..

finance, (2014).  Should you acquire Woolworths Limited in 2014?. [online] Sold at: http://finance.ninemsn.com.au/newsbusiness/motley/8791060/should-you-buy-woolworths-limited-in-2014 [Accessed twenty-two Jun. 2014].

Hassan, N., Hassan, N. and account, V. (2011).  Maximising Investors Wealth: Inexpensive Debt or Equity Fund????. [online] Maximisingshareholderswealth. blogspot. com. au. Offered by: http://maximisingshareholderswealth.blogspot.com.au/2011/04/cheap-debt-or-equity-finance.html [Accessed 22 Jun. 2014].

investing. com, (2014).  Woolworths Ltd "balance sheet" | INCREDIBLE Stock -- Investing. com. [online] Offered at: http://www.investing.com/equities/woolworths-limited-balance-sheet [Accessed 22 Jun. 2014].

Pettis, Meters. (2014).  What Do Lender Share Rates Tell Us Regarding Growth?. [online] Carnegie Endowment for Foreign Peace. Offered by: http://carnegieendowment.org/2014/02/16/what-do-bank-share-prices-tell-us-about-growth/h18j [Accessed 22 Jun. 2014].

Riffle-Lash, C. (2014).  What Affects Inventory Prices?. [online] Capitalexchangeblog. com. Available at: http://www.capitalexchangeblog.com/whataffectsstockprices/ [Accessed 22 Jun. 2014].

Students Room, (2014).  Revision: Gearing - formulation and uses - Trainees Room. [online] Available at: http://www.thestudentroom.co.uk/wiki/Revision:Gearing_-_formula_and_uses [Accessed 22 Jun. 2014].

Tutor2u. net, (2010).  Q& A - Is there an optimal level of gearing?. [online] Sold at: http://www.tutor2u.net/blog/index.php/business-studies/comments/qa-is-there-an-optimal-level-of-gearing [Accessed twenty two Jun. 2014].

- Organization Class Notes

- Woolworths income sheets / "balance sheet" 2012-2013 (figures)

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