Account and Financial Management for Traded- myassignmenthelp

Question: Discuss about theAccount and Financial Managementfor Traded Company. Answer: Summary of Findings This study deals with examining the financial performance of a publicly traded company known as Woolworths Limited for the year 2015 and 2016 (Woolworths.com, 2017). For this study, information is generated from the annual reports of Woolworths Limited for the year 2015 and 2016. The main motive of business is to generate profit with the resources available to the company. The financial manger is responsible for assessing the profitability of a business in order to evaluate whether or not adequate returns can be generated on its assets as well as investments (Deegan, 2013). To that, there are different ratios that can be used for evaluating the profitability. In this study, the profitability ratio used is gross profit ratio, return on assets and return on equity. In the year 2015, gross profit of Woolworths Limited arrives at 40.96% and 40.59% in the year 2016. Return on assets is one of the profitability ratios that allows for assessing the way on how efficiently assets of Woolworths Limited are being managed and looks at the ability of the management team for controlling the expenses. In the year 2015, return on assets of Woolworths Limited arrives 0.075 and 0.087 in the year 2016. The figures show that Woolworths Limited has achieved better results as comp ared to its peer groups or industry. Therefore, Woolworths Limited earned more operating profit per dollar of investment in assets as compared to its peer groups. After analyzing the financial ratio for the year 2015 and 2016, it is understood that Woolworths Limited records poor profit results that in turn act as an indicator that there is problem with overall performance of the firm (Chan et al., 2016). Liquidity ratio is calculated as it predicts the ability of any business whether they can pay their short-term obligations, bills and pay down debt on time. Here, it is important to assess the liquidity position of Woolworths Limited and compare it with the industry standards. In this study, current ratio and quick ratio are calculated for the year 2015 and 2016. To explain in detail, current ratio is calculated by taking current assets and dividing it by current liabilities. In the year 2015, current ratio of Woolworths Limited arrives at 0.91 and 0.94 in the year 2016. The industry average is 2:1. Hence, Woolworths Limited is trailing slightly behind in terms of overall liquidity. It is important to note that neither Woolworths Limited nor the industry average shows enough liquidity for covering all liabilities without the need for raising additional funds. By looking at ratios, it is quite evident that Woolworths Limited has managed a current ratio closer to 1. The reason behind t he figure is poor sales results as well as high venture caused by the Masters venture. It is because of cost incurred in business and cost of operating an underperforming business (Bushman, 2014). Capital structure ratio is also known as solvency ratio that indicates in which firms selection are made to finance their assets, either through debt or equity. In this study, debt to equity and equity ratio are calculated for Woolworths Limited that explains the solvency position of the business organization (Beatty Liao, 2014). Reference List Beatty, A., Liao, S. (2014). Financial accounting in the banking industry: A review of the empirical literature.Journal of Accounting and Economics,58(2), 339-383. Bushman, R. M. (2014). Thoughts on financial accounting and the banking industry.Journal of Accounting and Economics,58(2), 384-395. Chan, S. H., Song, Q., Rivera, L. H., Trongmateerut, P. (2016). Using an educational computer program to enhance student performance in financial accounting.Journal of Accounting Education,36, 43-64. Deegan, C. (2013).Financial accounting theory. McGraw-Hill Education Australia. Woolworths.com. (2017).Very | Womens, Mens and Kids Fashion, Furniture, Electricals More!. [online] Available at: https://www.woolworths.com [Accessed 27 Aug. 2017].