Report on Woolworths

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| | |Woolworths Ltd. | |Account Assignment | | | |Kavindi, Justin & Gurleen | |17/01/2011 |

|Kavindi Abeywickrema – 16333577 | |Ni Zisheng (Justin) – 16406767 | |Gurleen Walia – 16020542 |

Table Of Contents

Introduction ………………………………………….Pg. 3 Part B …………………………………………. Pg. 4-5 Part C ………………………………………….. Pg. 6-13 Part D ………………………………………….. Pg.14-15 Reference List …………………………………………Pg. 16

INTRODUCTION

The purpose of this assignment is to prepare a report for the managing partner based on Woolworths ‘annual report for the year 2009 and 2010. This assignment will be categorized into three sections. Firstly, we will discuss the opinion of Woolworths’ director about the company’s performance and find out what depreciation method that the business used. Secondly, we will calculate the profitability, liquidity, efficiency and gearing ratios based on 2009 and 2010 financial statements and provide a feedback to the management. Lastly, we will give our opinion about the company’s suitability as an investment.

Part B

1) How did the company view the past year?

Woolworths Ltd had a very successful year of trading in 2009. Net Profit reached $1835.7 million, an increase of 12.8% after tax. Sales increased to $49.6 billion with a 7.5% increase. Earnings per share increased to 11.7% to 150.7 cents. Compared to 2009, Woolworths Ltd is still well positioned to benefit from an upturn in the economy; net profit reached 2020.8 million after tax, an increase of 10.1% attributable to equity holders of the parent entity. Sales increased to $51.7billion, with 2.1billion or 4.2% increase.

2) Which firm conducted the audit? What is the name of the partner? Read the Audit Report provided by the auditors and briefly describe their audit approach.

Deloitte conducted the audit and the name of the partner is A V Griffiths. They conducted the audit in accordance with Australian Auditing Standards. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial report. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial report, whether due to fraud or error.

3) a) How inventories are valued?
Inventories are valued based on Average Cost.

b) How non-current assets are depreciated?

Non-current assets are depreciated by reducing balance depreciation method.

c) What the company includes in their intangibles that are listed in the non-current assets section of the balance sheet? What percentage do these intangibles make up the total assets? Briefly comment on your findings.

Intangible non-current assets: Goodwill, brand names, Liquor and gaming licenses.

( 5071 / 18487)x 100%=27%

These Intangibles are made up of 27% of the total assets. This indicates that 27% of assets provide expected future benefits, but have no physical substance.

Part C

➢ 2009...
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