11 Apr. The firm could have acted more prudently by declaring lower dividends and ensuring adequate availability of the cash. Woolworths being the oldest and the most trusted in the food business has consolidated its position in the market over past 84 years. Data may be intentionally delayed pursuant to supplier requirements. Thus the firm has ensured high investor gains in the forms of dividends and earnings per share and satisfied their core suppliers as well.But however certain observations and recommendations are made analysing the firms performance over the past years1. In the last fiscal i.e.
Construct your own queries. Provide a financial statement analysis of Woolworths for 2015 in table format. The current P/E earning growth of Woolworth is about 2.9% whereas the market growth is only of 1.30%. The main aim of this paper is to analyse the profitability of the company and its cash flows. Thus the investment in Woolworth’s can be considered highly profitable as the earnings it generates are much higher than the market earnings. Our service offers “Accounting” essay sample that was written by professional writer. The company also boasts of international operations outside Australia and New Zealand; it operates more than 62 electronic stores under the Croma brand name in India as well.Woolworths has always aimed at maximization of returns to its shareholders. Woolworth has continued to dominate the Australian market for the past 84 years and continues to enjoy a brand image and a high customer loyalty. However there has been a marginal increase in the cash flow in 2011 after facing declines in 2009 and 2010.Another factor affecting the firm’s net cash flow availability has been the payment of high and regular dividends.
Woolworth has successfully been able to maintain healthy cash flows over a period of time.
The firm should instead consider a long term strategy for growth instead to creating a deflationary pressure on the firm that would impact both revenue as well as profitability. Firstly, the firm has undertaken massive capital expenditure that has resulted in the low net profit expectations in the current fiscal. * A photocopy is to be submitted. A continuous growth of the group’s revenues can be seen from the figure below.Figure 2: Revenue Growth of Wool worth’s Australia 2008-2011(Annual Reports Woolworth ,2012,1-100).The Woolworth’s sale has been growing constantly from 2008- 2011, the increase in sales has been consistent from $47,034 in 2008 to $ 54,142 in 2011. Therefore Woolworth has paid special attention to the needs of their shareholders by ensuring them high earnings for their investment.Analysts expect an additional increase in the shareholder value in the current fiscal with an expectation of increase in the earning per share to 186 in 2012 much higher than 176 in 2011.Both the Price earnings ratio and the Price earnings growth of Woolworth is much higher than the market. With the introduction of online shopping and its growing popularity enables the group access a large groups of population. The EV/EBITDA NTM ratio of Woolworths Holdings Limited is lower than the average of its sector (Broadline Retailers): 8.74. According to a survey Woolworth‘s occupy over 70% of the market share in Australian food retail market and over 2700 stores all over the country. (Woolworths, 2012 , 1 ) 2. N.p., n.d. The high revenue growth can also be attributed to growth in customer share at both Australian and New Zealand super markets. Another reason that can be attributed to the slightly sluggish net profit growth is the rising interest costs, this however is a global phenomenon and cannot be attributed to the Australian economy alone. This would lead to a massive change in the management and the decision making process.
You should alsoEnsure you reference all sources of information used for the report. It is only with the availability of free cash flows that a firm is able undertaking capital investment over a long period of time. Thus firms even with good profit margins to tend to get marginally affected by the rising interest costs which also tend to delay expansion plans. A sound cash flow is important to run and operate a business. Include the following ratios (show all workings): current ratio, Quick ratio; inventory turnover, Accounts receivable turnover; asset turnover, debt to equity, gross profit margin, profit margin, return on assets, return on equity. The slower growth of the super market giant is also attributed to the price wars on basic commodities like bread and milk with its close competitor Cloves .The grocers control over 80% share of the Australian super market .However Woolworth is satisfied with its performance owning to the international economy and facing of constant deflationary pressures. “The presented piece of writing is a good example how the academic paper should be written. The price earnings ratio of Woolworth is 14 whereas the market is at 13. With the rationalization and efficiency introduced in the non-food sector further there cost savings are likely to increase. Our reference papers serve as model papers for students and are not to be submitted as it is.
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