Financial Report for Busn1001 Australian National University

ANALYSIS OF FINANCIAL STATEMENTS OF METCASH LTD

Introduction

This report aims at interpreting and analyzing the financial annual reports of Metcash and its competitor Woolworths, and provides information obtained through ratio analysis, regarding the profitability, liquidity, and financial stability of MTS Ltd for the years 2012-2014. It will highlight the major strengths and weaknesses while offering some explanation for observed changes.

Woolworths is the ideal competitor for this analysis as it is a leading company in the retail industry of which Metcash is a part. Both companies deal in Food and Staples Retailing and have operation throughout Australia. A limitation to this particular competitor is that its Market Capital in comparison with Metcash is much higher, which may also be reflected in the analysis undertaken. This may present drastic differences when comparing Metcash and Woolworths’ financial statements.

This report consist of the Business and Strategic Analysis, which provides an insight into the business activities, position and corporate and competitive strategies of Metcash Ltd in today’s economy. The Financial Analysis interprets the financial statements of the company using techniques of ratio analysis, trend analysis and common size statements to analyze the financial structure of the company with that of its competitor. It also helps in understanding the position of the company relative to its industry in various aspects which concerns a shareholder. It states the financial strengths and weaknesses of the company and provides recommendations for needed changes.

In conclusion, it is evident that Woolworths has a lead on Metcash. Metcash’ underperformance does not help in attracting investors and even though the new transformation plans adopted by Metcash may seem promising, it may not be an answer to the current financial instability experienced by the company.

BUSINESS AND STRATEGIC ANALYSIS

Statement of Metcash’s Business...