Financial Analysis of Woolworths Ltd
Financial Analysis of Woolworths Limited
10 October 2011
By: Huatong (Claire) Liu
To: Potential investors
Executive Summary
The primary purpose of this report is to determine whether Woolworths Limited is an appropriate and profitable company to invest in. Specific objectives include analysis of annual reports of Woolworths and its competitors (Wesfarmers) as well as interpretation of relevant government and industry statistics, stock exchange, market information and media comments. Further, Woolworths’s financial strengths and weaknesses are identified. The potential growth prospects for Woolworths, the future of the food and staples retailing industry, and the risks versus the benefits of investing in Woolworths are all considered to determine whether Woolworths is profitable for potential investors.
Based on relevant information and detailed analyses, Woolworths Limited is considered as the best company in the food and staples retailing industry with high efficiency, low risk and great return to shareholders. In the face of a down economy, the company’s growth rate has been significantly low since 2009. Therefore, the recommendation for potential investors is not to buy Woolworths’ shares at the moment but wait till later.
TABLE OF CONTENTS
Executive Summary …………………………………………………………………...i
Table of contents……………………………………………………………………...iv 1. Introduction……………………………………………………………………1 2. Conclusion 3. Recommendation 4. Discussion 1. Profitability 2. Efficiency 3. Financial risks 4. Market-based ratios 5. Relevant information about Woolworths 5. Bibliography……………………………………………………………. …. 6. Appendices Woolworths Ltd (WOW) Appendix A.1: Ratio analysis of WOW Appendix A.2: Common-Size Statement of Comprehensive Income for WOW Appendix A.3: Common-Size Balance Sheet for WOW Appendix A.4: Common-Size Statement of Cash Flows for WOW Appendix A.5: WOW
10 October 2011
By: Huatong (Claire) Liu
To: Potential investors
Executive Summary
The primary purpose of this report is to determine whether Woolworths Limited is an appropriate and profitable company to invest in. Specific objectives include analysis of annual reports of Woolworths and its competitors (Wesfarmers) as well as interpretation of relevant government and industry statistics, stock exchange, market information and media comments. Further, Woolworths’s financial strengths and weaknesses are identified. The potential growth prospects for Woolworths, the future of the food and staples retailing industry, and the risks versus the benefits of investing in Woolworths are all considered to determine whether Woolworths is profitable for potential investors.
Based on relevant information and detailed analyses, Woolworths Limited is considered as the best company in the food and staples retailing industry with high efficiency, low risk and great return to shareholders. In the face of a down economy, the company’s growth rate has been significantly low since 2009. Therefore, the recommendation for potential investors is not to buy Woolworths’ shares at the moment but wait till later.
TABLE OF CONTENTS
Executive Summary …………………………………………………………………...i
Table of contents……………………………………………………………………...iv 1. Introduction……………………………………………………………………1 2. Conclusion 3. Recommendation 4. Discussion 1. Profitability 2. Efficiency 3. Financial risks 4. Market-based ratios 5. Relevant information about Woolworths 5. Bibliography……………………………………………………………. …. 6. Appendices Woolworths Ltd (WOW) Appendix A.1: Ratio analysis of WOW Appendix A.2: Common-Size Statement of Comprehensive Income for WOW Appendix A.3: Common-Size Balance Sheet for WOW Appendix A.4: Common-Size Statement of Cash Flows for WOW Appendix A.5: WOW
Bibliography: Landcare In Focus, The Land, Thursday, May 5, 2011 http://www.landcareonline.com.au/wp-content/uploads/2011/05/Landcare-in-Focus-May-2011-small.pdf