Financial Analysis on Coles Myer & Woolworths
Table of Contents
Introduction............2
Financial Condition...........3
1. Overview............3
2. Liquidity..............3
3. Financial Leverage.......5
4. Assets Management....6
5. Profitability...........7
Conclusion.......8
Recommendation......8
References.............10
Appendix................11
Introduction
Coles Myer Limited (CML) and Woolworths Limited (WOW) are two major Australian companies with extensive retail interest and listed on the Australian Stock Exchange. They are Australian public companies which operate a number of retail chains.
CML is Australia's second largest retailer, behind WOW. It operates a number of chains of retail outlets which are including Coles Supermarkets, Bi-Lo, Liquorland, Pick 'n Pay Hypermarket, Kmart, Officeworks, Target, Harris Technology and Coles Express (Wikipedia, 2006) .
WOW is currently the largest retail company in Australia and New Zealand by market capitalisation and sales. WOW operates in Australia through several retail banners such as Woolworths and Safeway Supermarkets, BWS, Dan Murphy's, BIG W, Dick Smith Power House and Dick Smith Electronics (Wikipedia, 2006) .
The purpose of this report is to analyse financial performances of the two publicly listed companies in last 5 years by using series of calculation tools include horizontal analysis and financial ratios. Also as a recommendation, we will advise investors to buy or not buy the two companies' shares according to the results of the performance analysis.
Financial Condition
(See Appendix 1 & 2 for ratio details)
1. Overview
The WOW's revenue has increased every year, one year as great as 149.90 % in 2005 (see appendix 11 for details). In 2001, revenues were 20915.1 million while in 2005 revenue has increased to 31352.5 million. Since revenue increased, the net profit obviously has increased as well. Net profit rose 84.70% from 2001 to 2005. The Horizontal Analysis (Appendix 11 &; 14) indicates WOW is a very successful company
Introduction............2
Financial Condition...........3
1. Overview............3
2. Liquidity..............3
3. Financial Leverage.......5
4. Assets Management....6
5. Profitability...........7
Conclusion.......8
Recommendation......8
References.............10
Appendix................11
Introduction
Coles Myer Limited (CML) and Woolworths Limited (WOW) are two major Australian companies with extensive retail interest and listed on the Australian Stock Exchange. They are Australian public companies which operate a number of retail chains.
CML is Australia's second largest retailer, behind WOW. It operates a number of chains of retail outlets which are including Coles Supermarkets, Bi-Lo, Liquorland, Pick 'n Pay Hypermarket, Kmart, Officeworks, Target, Harris Technology and Coles Express (Wikipedia, 2006) .
WOW is currently the largest retail company in Australia and New Zealand by market capitalisation and sales. WOW operates in Australia through several retail banners such as Woolworths and Safeway Supermarkets, BWS, Dan Murphy's, BIG W, Dick Smith Power House and Dick Smith Electronics (Wikipedia, 2006) .
The purpose of this report is to analyse financial performances of the two publicly listed companies in last 5 years by using series of calculation tools include horizontal analysis and financial ratios. Also as a recommendation, we will advise investors to buy or not buy the two companies' shares according to the results of the performance analysis.
Financial Condition
(See Appendix 1 & 2 for ratio details)
1. Overview
The WOW's revenue has increased every year, one year as great as 149.90 % in 2005 (see appendix 11 for details). In 2001, revenues were 20915.1 million while in 2005 revenue has increased to 31352.5 million. Since revenue increased, the net profit obviously has increased as well. Net profit rose 84.70% from 2001 to 2005. The Horizontal Analysis (Appendix 11 &; 14) indicates WOW is a very successful company
References: 1.Wikipedia 2006, Coles Myer Ltd, Wikipedia Free Source Organization, viewed 10 September 2006 2.Wikipedia 2006, Woolworths Ltd, Wikipedia Free Source Organization, viewed 10 September 2006 3.Financial Report, 2005, Coles Myer Ltd., pp 19 4.Vance, D.E. 2003, Financial Analysis and Decision Making, McGraw-Hill, United States of America 5.Harvey, D, McLaney, E and Atrill P 2001, Accounting for business, Butterworth-Heinemann, Oxford 6.Simpson, K. 2006, Market waits for higher Coles bit, The Age, 8 September 2006, front page of Business Section 7.News Release 2006, 'Coles Myer Acquires Pharmacy Direct ', Coles Myer Ltd., 31 March 2006 8.News Release 2006, 'Hedley Hotel Acquisition Complete ', Coles Myer Ltd., 14 June 2006