205321153 Woolworths PAST JOB 1
University of Technology Sydney
Graduate School of Business
22743 BUSINESS VALUATION AND FINANCIAL ANALYSIS
Group Assignment
OCTOBER SESSION
Report to: PROFESSOR ZOLTAN MATOLSCY
Case Study: Woolworths
Prepared by:
Student Name
Student Identification
Brent HENLEY
10388039
Peter HOWE
02130033
Christian ORITZ
03005802
Zhiming YE
10669428
ASSIGNMENT DUE 21 October 2009
Table of Contents
Woolworths Limited: Case Study 3
Executive Summary 3
Restating Financial Statements 3
Industry and Business Strategy Analysis 4
1. Industry Analysis 4
2. Business Strategy Analysis 5
Accounting and Financial Analysis 6
Measuring overall profitability 6
Assessing Operational Management 7
Woolworths Limited Profit and Loss and Balance Sheet Forecast – 2009 to 2014 8
Profit and Loss 8
Balance Sheet 9
Valuations 9
Sensitivity Analysis 11
Assumption 1 11
Assumption 2 11
Recommendation 12
Appendix 13
Woolworths Limited: Case Study
Executive Summary
Woolworths Limited is a diversified retailer with principal operations in Australia and New Zealand. The company is recognised as one of the top five retailers in the world with major brands in Australia that includes Woolworths and Safeway supermarkets, Woolworths and Safeway Liquor, Caltex/Woolworths Petrol, Dick Smith Electronics, Powerhouse, Tandy, BWS, Dan Murphy's and BIG W. The company has successfully leveraged its economies of scale to dominate and gain a competitive edge over its rivals in Australia and has consistently recorded double-digit sales revenue and a stable ROE to its shareholders.
To continue this impressive momentum of sales growth, Woolworths has embarked on entering the hardware market in Australia, it has recently entered the organic food market by acquiring the well-known “Macro” organic brand and plans to expand its operations in emerging markets like India. However, it also faces more intense competition from its rivals Coles, IGA, Aldi and other smaller boutique food retailers. It must also weather
Graduate School of Business
22743 BUSINESS VALUATION AND FINANCIAL ANALYSIS
Group Assignment
OCTOBER SESSION
Report to: PROFESSOR ZOLTAN MATOLSCY
Case Study: Woolworths
Prepared by:
Student Name
Student Identification
Brent HENLEY
10388039
Peter HOWE
02130033
Christian ORITZ
03005802
Zhiming YE
10669428
ASSIGNMENT DUE 21 October 2009
Table of Contents
Woolworths Limited: Case Study 3
Executive Summary 3
Restating Financial Statements 3
Industry and Business Strategy Analysis 4
1. Industry Analysis 4
2. Business Strategy Analysis 5
Accounting and Financial Analysis 6
Measuring overall profitability 6
Assessing Operational Management 7
Woolworths Limited Profit and Loss and Balance Sheet Forecast – 2009 to 2014 8
Profit and Loss 8
Balance Sheet 9
Valuations 9
Sensitivity Analysis 11
Assumption 1 11
Assumption 2 11
Recommendation 12
Appendix 13
Woolworths Limited: Case Study
Executive Summary
Woolworths Limited is a diversified retailer with principal operations in Australia and New Zealand. The company is recognised as one of the top five retailers in the world with major brands in Australia that includes Woolworths and Safeway supermarkets, Woolworths and Safeway Liquor, Caltex/Woolworths Petrol, Dick Smith Electronics, Powerhouse, Tandy, BWS, Dan Murphy's and BIG W. The company has successfully leveraged its economies of scale to dominate and gain a competitive edge over its rivals in Australia and has consistently recorded double-digit sales revenue and a stable ROE to its shareholders.
To continue this impressive momentum of sales growth, Woolworths has embarked on entering the hardware market in Australia, it has recently entered the organic food market by acquiring the well-known “Macro” organic brand and plans to expand its operations in emerging markets like India. However, it also faces more intense competition from its rivals Coles, IGA, Aldi and other smaller boutique food retailers. It must also weather
References: BARROWCLOUGH, Anne. (2009, March 5). Australian GDP slips. The Times,51. Retrieved October 2, 2009, from ProQuest Newsstand. (Document ID: 1655793951). Business Monitor International, Australia Food and Drink Report - Q4 2009. (2009, October). Australia Food and Drink Report, p.65, Retrieved October 2, 2009, from ABI/INFORM Trade & Industry. (Document ID: 1864724811). Datamonitor, 2009. "DATAMONITOR: Woolworths Limited." Woolworths, Ltd. SWOT Analysis, page 4, Business Source Premier, EBSCOhost (accessed October 2, 2009). Datamonitor, 2009. "DATAMONITOR: Woolworths Limited." Woolworths, Ltd. SWOT Analysis, pp. 5-6, Business Source Premier, EBSCOhost (accessed October 2, 2009). Weekend Australian (Australia), 26 September, 2009, Blair Speedy, p. 27, Finance Section Wesfarmers (2008), Wesfarmers Annual Report 2008, http://thomson.mobular.net/thomson/7/2802/3518/ - accessed 21st October 2009 (WOW (2006, 2007, 2009)) Appendix 1: Woolworths Limited’s reformatted financials for the period 2006 to 2008 – Balance Sheet