Monetary Analysis on Coles Myer & Woolworths

 Financial Analysis on Coles Myer  Woolworths Article

Table of Contents

Intro............ 2

Personal finances........... 3

1 ) Overview............ a few

2 . Liquidity.............. 3

several. Financial Influence....... 5

four. Assets Management.... 6

your five. Profitability........... 7

Conclusion....... eight

Recommendation...... almost eight

References............. 12

Appendix................ 11


Coles Myer Limited (CML) and Woolworths Limited (WOW) are two main Australian firms with considerable retail curiosity and on the Australian Stock Exchange. They are Aussie public firms which function a number of price tag chains.

CML is Australia's second most significant retailer, behind WOW. This operates several chains of retail outlets that are including Coles Supermarkets, Bi-Lo, Liquorland, Choose 'n Spend Hypermarket, Kmart, Officeworks, Goal, Harris Technology and Coles Express (Wikipedia, 2006).

WOW is currently the largest retail business in Australia and New Zealand by industry capitalisation and sales. INCREDIBLE operates in Sydney through a number of retail banners such as Woolworths and Safeway Supermarkets, BWS, Dan Murphy's, BIG W, Dick Jones Power Property and Dick Smith Gadgets (Wikipedia, 2006).

The purpose of this kind of report should be to analyse economic performances with the two publicly listed corporations in previous 5 years by using number of calculation tools include horizontal analysis and financial percentages. Also as being a recommendation, all of us will suggest investors to buy or certainly not buy the two companies' stocks and shares according to the results of the efficiency analysis.

Financial Condition

(See Appendix 1 & 2 intended for ratio details)

1 . Review

The WOW's revenue has grown every year, 12 months as superb as 149. 90 % in june 2006 (see appendix 11 for details). In 2001, revenues were 20915. 1 mil while in 2005 revenue has increased to 31352. 5 million. Seeing that revenue elevated, the net earnings obviously has grown as well. Net profit increased 84. 70 percent from 2001 to 2006. The Side to side Analysis (Appendix 11 &; 14) indicates WOW is an extremely successful company and earning money. CML's income has increased 52% and the net profit went up 314% from 2001 to 2005, the expansion was tremendous because it took place in typical reference to the restructuring of the technique of financing another operation (Financial Report, 2005).

2 . Liquidity

Current rate

This proportion represents the financial fluidity of the company. 'The current ratio examines the possessions a company can easily convert to funds to the debts it must shell out in the close to term' (Vance, D. Electronic. 2003). The greater the proportion, the more liquefied the company can be. For CML, there was a small increase of 0. '04 from 2001 to 2002. Then it and then an obvious fall from 1 . 37 to 1. 09 during period via 2002 to 2005. This kind of represents that one-unit current liabilities can be secured by simply 1 . thirty seven units of current possessions in 2002 and 1 ) 09 products, nearly 1 current property for one current liability, in 2005. From the perspective of WOW, the ratio starts off from 0. 81 about 0. 84 then dropped to zero. 81 and finally dropped to 0. 82 during this period of your energy. The current percentages are all less than one, demonstrating the fact that one current asset will prepare for the payment of more than one unit current the liability. That leads to high liquidity risk in the business operation. If there is an emergency to WOW, it is going to encounter the condition of repayment.

Quick proportion

Quick percentage is similar with current percentage, but more conservative than current rate, because in numerator, inventory is ruled out from current assets, and dominator, lender overdraft can be excluded via current liabilities. 'The quick ratio addresses the issue of if current property could cover current liabilities if inventory were found to be worthless' (Vance, M. E. 2003). WOW knowledgeable a slight increase from zero. 2 to 0. twenty six in this time frame. In contrast, CML experienced a modest fluctuation and end up with 0. twenty-eight in 2006, the lowest one out of 5-year as well as the highest one is 0. 41 in 2003. Generally, the quick...

Referrals: 1 . Wikipedia 2006, Coles Myer Limited, Wikipedia Totally free Source Firm, viewed 12 September 2006

2 . Wikipedia 2006, Woolworths Ltd, Wikipedia Free Supply Organization, looked at 10 Sept 2006

several. Financial Statement, 2005, Coles Myer Ltd., pp nineteen

4. Vance, D. Elizabeth. 2003, Economical Analysis and Decision Making, McGraw-Hill, United States of America

5. Harvey, G, McLaney, At the and Atrill P 2001, Accounting for business, Butterworth-Heinemann, Oxford

6. Simpson, K. 2006, Market holds back for larger Coles bit, The Age, 8 September 2006, front web page of Organization Section

7. News Release 2006, 'Coles Myer Acquires Pharmacy Direct ', Coles Myer Ltd., thirty-one March 2006

8. Seo press releases 2006, 'Hedley Hotel Buy Complete ', Coles Myer Ltd., 14 June 06\



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