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Analyse financial ratios using actual reported data

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Reference no: EM132321983

Financial Accounting Assignment -

PURPOSE - Financial Statement Analysis - To calculate and analyse financial ratios using actual reported data.

REQUIRED - Given the financial statements and the additional information, analyse and discuss the financial performance and position of Woolworths Group Limited (ASX Code: WOW). You should refer to the notes to the financial statements and the Director's Report for further details and clarifications of changes in the financial statements. (You may find the Full Year Results CEO & CFO Presentation useful for this assignment).

Your analysis should be supported by profitability, liquidity, gearing and other appropriate ratios from Chapter 18 of the prescribed textbook.

Calculate and analyse financial ratios (percentage and ratio analysis)

Use the 2018, 2017 and 2016 published annual reports to obtain the financial statement figures needed to calculate the ratios (where there are consolidated accounts, use the consolidated amounts). In addition, students are strongly advised to:

  • Perform horizontal and vertical analyses of the Statements of Financial Position (Balance Sheets) and Statements of Profit or Loss (Income Statements) for the company.
  • Read all parts of the Annual Reports.

Instructions -

Your report should calculate and analyse the following ratios, in clearly identified separate sections:

Profitability -

  • Rate of return on net sales
  • Rate of return on total assets
  • Asset turnover
  • Rate of return on ordinary shareholders' equity
  • Earnings per share (given in the Annual Report)

Liquidity -

  • Working capital
  • Current ratio and Acid-test ratio
  • Inventory turnover and Days in inventory
  • Gross profit percentage
  • Accounts receivable turnover
  • Days' sales in receivables

Gearing -

  • Debt ratio
  • Debt to equity ratio
  • Times interest earned ratio

Your analysis should include:

  • Year-to-year (2018 and 2017; 2017 and 2016) comparisons (horizontal analysis). Use the Director's Report and the Notes to the Accounts to further justify your answer.
  • The components of each ratio should be investigated to determine the significant or determining factors in any change to the ratio.
  • These significant factors should then be investigated to determine (to the extent possible) the cause and sustainability of their change (refer to example below).

Example of a current ratio analysis: Company X current ratio increased from 1.2 to 4.3. The company increased its ability to pay its debts in the short-term. The main reasons for the increase were a 22% increase in cash and a 14% decrease in trade payables. The increase in cash and the decrease in trade payables were both a result of reductions in purchases of inventory. This is unlikely to continue as the company was depleting a previous overstock.

Each ratio analysis will be marked on the correctness of the comparisons and the identification of the determining factors. The depth and correctness of analysis of the factors will be the primary criteria for grade differentials in this assignment. The determining factors need not be confined to the annual reports but they must be relevant to your analysis.

Report writing structure -

Purpose of a report

Report sections:

  • Introduction
  • Analysis/Inferences and results
  • Conclusion and Recommendations
  • Appendices
  • Executive Summary.

Attachment:- Assignment Files.rar

Reference no: EM132321983

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Reviews

len2321983

6/14/2019 12:22:39 AM

This report should not exceed 2,000 words (excluding Executive Summary and appendices). A marking rubric is included in this assessment for your information. The marking rubric details what is required in the report under each section. Note that this assessment will be discussed further in class. Administrative Details - Your assignment (in a report form) should be lodged through the Turnitin Assignment folder of Blackboard by 5.00pm Friday 24. LATE SUBMISSION PENALTY APPLIES.

len2321983

6/14/2019 12:22:32 AM

This assignment must be typewritten and double-spaced. A copy should always be kept by the student. Attach an Assignment Cover Sheet to your submission. Wherever possible, tabulate your comparative data and show them in an appendix but cross-reference them in your report. The policies on late submission of assignments and plagiarism are provided in the Course Outline. Extensions with valid reasons will only be considered if the application is made 48 hours prior to submission.

len2321983

6/14/2019 12:22:26 AM

Report Rubric - Summary is excellent: all major points are restated clearly and concisely and no minor details and opinions appear. Excellent summary which restates main purpose, key points, facts, and figures. Summary is highly organised and invites readers to read more. Information flows in a logical order creating clarity and interest; is tailored nicely toward executive audience. Executives can make decisions and take appropriate action. Introduction is excellent: quick to engage a professional audience.

len2321983

6/14/2019 12:22:21 AM

Data is appropriate and very relevant; presentation and analysis of data is thorough, deep and sophisticated. Visual supplements are included and provide valuable information that is clear, professionally presented, and insightful. Conclusions and recommendations are pertinent, realistic, evidence-based, and detailed. Continuity of argument and evidence is very professional. All required sections are effectively structured and organised. Free of formatting errors . No grammatical errors exist. Report is free of punctuation, spelling, or capitalization errors. Sentences are complex and sophisticated. Style is concise and professional. The report has clearly been edited and proofread numerous times. The appendices added are useful tools for the professional reader.

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