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Financial Statement Analysis : Financial Analysis

Decent Essays
Woolworth Financial Analysis
Financial statement analysis assists a business entity, business shareholders and other people interested, to analyze the figures in financial statements to present them with superior information about such most important factors for decision making and ultimate business survival. As exemplified by Gibson (2001), income statement, balance sheet, and cash flow statements project the financial performance a company at the present and probably the future. According to the annual report 2014, Woolworth’s revenue is projected to rise by 4.09% annually. The group’s financial performance for the past four years is shown below.
Table 1: Woolworths Limited
Year Revenue AUD in millions Growth %
2010-11 54280
2011-12 55441 2.14
2012-13 58674 5.83
2013-14 60952 3.88
Average growth rate 3.95

The above table demonstrates a general idea of Woolworth’s revenue and growth all over a three-year period. It is equally important to recognize the financial position and operational results in which were the follow-on behind Woolworths’s steady growth. As a result, to identify these factors, the following ratios are used to evaluate Woolworths’ financial position and results of operations.
 Company Profitability ratio
 Liquidity ratio
 Activity ratio
 Financial Leverage Ratios

1. Company Profitability ratio
As exemplified by Baker & Powell (2005), profitability ratio assesses how successful a corporation has been in meeting its general revenue goals,
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