Wesfarmers Financial Analysis

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UNIT 101 – FINANCIAL MANAGEMENT LECTURER’S NAME TOPIC NAME: ------------------------------------------------- Financial Analysis of Wesfarmers Limited 2011 Annual Report SUBMISSION DATE: STUDENT NAME: STUDENT ID: EXECUTIVE SUMMARY This report provides the financial analysis and evaluation of Wesfarmers Limited’s 2010 and 2011 fiscal year. The analysis of Wesfarmers performance is based on the 2011 Annual Report. To determine the financial standing of the company at the end of the year, data obtained from their Income Statement, Balance Sheet and Cash Flow Statement, the financial analysis ratios: Liquidity ratios, efficiency ratios, profitability ratios, financing ratios, and market-based investments and other ratios, are all…show more content…
It is based on the use of Financial Analysis Ratios. It is based on values collected from Wesfarmers 2011 Annual Report to calculate the following finance ratios: * Liquidity ratios are used to determine a company’s ability to pay off its short-term debts obligations. * Efficiency ratios are used to analyze how well a company uses its assets and liabilities internally. * Profitability ratios are used to assess the ability of a business to generate earnings as compared to its expenses and other relevant costs incurred during a particular period. * Financing ratios are used to evaluate the ability of a company to manage their long-term solvency * Investment ratios are used to determine whether a firm is worth investing in and in what direction they could be heading. These ratios can be used to indicate how well or bad Wesfarmers performed as well as provide insight into some of the changes that may have occurred between the financial years of 2010 and 2011. RATIOS Table 0-1: Liquidity Ratios SHORT-TERM SOLVENCY OR LIQUIDITY RATIOS | 2010 | 2011 | Current Ratio | 1.23 | 1.17 | Quick Ratio | 0.64 | 0.60 | Cash Flow from Operations to current liabilities | 0.42 | 0.33 | Table 0-2:
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