Woolworths Limited Case Study

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Register to read the introduction… It must be applied consistently to promote comparability between financial statements of different accounting period. However, a change in accounting policy may be necessary to enhance the relevance and reliability of information contained in the financial statement. In the case of the Woolworths Limited’s annual report, Woolworths limited was adopted a new accounting standards of AASB 119 ‘ Employee Benefit (2011) and AASB 2011-10 ‘Amendments to Australian Accounting Standard arising from AASB 119’. This standards changes the accounting for defined benefit obligations and plan assets. This new standard was applied to annual reporting periods beginning on or after 1 January 2013 and help the WOW to decrease the defined benefit obligation liability by $7.9 …show more content…
Statement of financial performance- Income statement

5.1 Woolworths Limited

* EBIT: Appendix figure 4

As the figures showing above, we can see that the retained profit was increasing from 2730.3 million to 4661.1 million, which is 71%higher than 4 years ago. The company was earning more profits through these five years. The factors were causing this result was due to the increased of sales revenue. Even though that the cost of sales and some expenses such as interest and depreciation was also increased, but the company had a higher rate of NPAT and the impairment loss was also reduced to 0. So the company was holding more assets on hand and can paid more dividends to shareholders.

5.2 Wesfarmers Limited

* EBIT: Appendix figure 5

As the figures showing above, we can see that the retained profit was increasing from 1183 million to 2375 million. The company was earning more profits through these five years. The factors were causing this result was due to the increased of sales revenue and reduced relative expenses. Even though that the cost of sales was also increased but the expenses such as interest and impairment loss was also reduced so the company was holding more assets on hand and can paid more dividends to
…show more content…
The other recommendation is to increase the sales so that the company can earn more profits when they have to reduce the price to compete with other. It can record the purchase amount for the members and reward the top 1000 customers such as offer them a chance to get a free shopping at the store for a limited time. This kind of activity can motivate the consumers to spend more and more frequently and also can attract the new customers who may be interested in

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