Analyzing Woolworths Ltd Annual Report Essay.

Obtain copies of an organisation’s annual report for the last two years. You might need to conduct appropriate research. If you cannot find suitable reports contact your assessor.

Answer the following questions using the latest annual report:

1.To who is this report disseminated and how is this done?

2.Why do these people need the information contained in the annual report?

3.What financial information does the report offer? Describe the contents of the report and explain what it tells you about the business’s activities—successes and non-successes—during the year.

4.Examine the financial summaries for information about the fiscal condition of the organisation. Did the organisation show a profit?

5.What sorts of recommendations are made and what suggestions are made regarding business activities for the upcoming year?Examine the annual report from the previous year.

6.Compare the two and report on whether the projections from the first report were accurate. Were the recommended changes/ improvements made and how did they impact on the next year’s report? Your report should be a minimum of three pages long.

7.Is there any emphasis on waste reduction? If so, describe it.

Audience for the report

1.The financial report is disseminated to the people who are interested in the entity like employees, shareholders, analysts, suppliers and lenders. It includes the information regarding the financial position as well as the financial performances of the entity. Through the financial report the directors of the entity advice the shareholders regarding the business performances and how the directors have executed their responsibilities. To be more specific, potential investors and present investors are the main audience for the annual reports. Apart from them customers, leaders and suppliers are also considered as targeted audience (Sedlá?ek 2016).

2.The above mentioned people require information included in annual reports for the below mentioned reasons –

• Employees – it delivers the management with the opportunity of praising the employee’s quality, innovation, commitment and teamwork, those are required for the success of business. It also helps the employees to understand different segments of the entity
• Suppliers – the ability of the company regarding meeting of the requirements of customers will be compromised seriously if it is burdened with incompetent suppliers. Through highlighting the internal measurement regarding quality, innovation and commitment implicit message can be sent to the suppliers regarding the expectation of the entity (Grant 2016).
• Shareholders, lenders and investors – they are concerned regarding the return and risks related to their investments. They further needs the information for deciding whether they shall continue investing in the business. Further, they need to assess whether the business will pay return on their investments.
• Analysts – Investment analysts are considered as major user group as they require detailed financial as well as other data for analysing competitive performances of the entity (Nobes 2014).

3.Various financial information provided under the annual report of Woolworths Ltd for the year ended 2018 includes the financial report that includes consolidated profit or loss statement, consolidated other comprehensive income statement, consolidated changes in equity statement, consolidated financial statement and consolidated cash flow statement. Contents of financial statements are as follows –

• Section 1 – performance highlights
• Section 2 – Business review
• Section 3 – Director’s report
• Section 4 – Financial report
• Section 5 – Other information (Woolworthsgroup.com.au 2018).

From the financial statement of the company it can be identified that sales, gross profit, EBIT and net profit of the company has been increased in 2018 as compared to the previous year. Further, it is identified that the borrowings of the company has been repaid and equity investment has been increased during the period. Moreover, the cash equivalent of the company at the closing of the year has been increased as compared to last year. Hence, it can be stated that the business activities are indicating success during the year (Caetano et al. 2017).

4.From the financial report of Woolworths for the year ended 2018 it can be identified that the profit and loss statement shown profit amounting to $ 1,795 million. Profit of the company has been increased by 12.39% as compared to previous year. This increase has been contributed by increase in operating revenue by 3.51% as compared to previous year. Further, the EBIT of the company has been enhanced by 11.09% in 2018 (Woolworthsgroup.com.au 2018).

5.For the upcoming year the business is recommended to –

• Achieve leadership in liquor and food
• Act on the portfolio of the company to maximize the value of shareholders
• Maintaining the track for building new growth.

Further, in 2019 the company expects sustainable growth for the shareholders through delivering good services, prices, choices, convenience and quality to the customers. It also expects to provide support and opportunities to the team members that will also have a positive impact on the communities (Weygandt, Kimmel and Kieso 2015).

6.In 2017 the company projected that it will continue investing in BIG W. In 2018 it has been identified that BIG W progressed in its turnaround through focussing in customers, addressing culture and engagement and fixing basics with the new team purpose. Further, it was expected that the share price will be equal to or more than $ 25.39 (Woolworthsgroup.com.au 2018). It was found that the share price for the year ended 2018 was $ 30.52 per share. Hence, it can be stated that the projections made by the company in previous year that is in 2017 were accurate. For investing in BIG W the short term borrowings of the company have been increased from $ 254 million to $ 604 million and long term borrowings have been increased from $ 2,777 million to $ 2,199 million. Further, the share price increase also increased the EPS of the company from 119.4 cents to 132.6 cents (Woolworthsgroup.com.au 2018).

7.The company has committed to have food waste division for 100% of the Woolworths Supermarkets by end of the year 2018. Further, the company committed to phase out single use plastic bags from the checkouts and from online shopping by end of the year 2018. It will remove million of bags from the circulation (Woolworthsgroup.com.au 2018).

References 

Caetano, A., Pereira, A.C., Severino Peters, M.R. and Santos, F.D.A., 2017. Analysy Of The Financial Statements: A Performance Valuation Of The Brazilian Companies By The Private Equity Based On The Information Disclosured. Revista Eniac Pesquisa, 6(2), Pp.271-285.

Grant, R.M., 2016. Contemporary strategy analysis: Text and cases edition. John Wiley & Sons.

Nobes, C., 2014. International classification of financial reporting. Routledge.

Sedlá?ek, J., 2016. Financial Statements in the Financial Decision Making. European Financial Systems 2016, p.678.

Weygandt, J.J., Kimmel, P.D. and Kieso, D.E., 2015. Financial & managerial accounting. John Wiley & Sons.

Woolworthsgroup.com.au. 2018. [online] Available at: https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf [Accessed 28 Nov. 2018].