Woolworths Limited

This report is written for the purpose to analyse Woolworths Limited (WOW), for potential investors to set out the financial strengths and weaknesses of Woolworths. Wesfarmers Limited (WES) has been chosen to be the competitors in this report because of its rivalry and competitiveness to Woolworths.

Woolworths is a leading company with extensive retail interest throughout Australia. It has the very large market capitalisation in the food and staples retailing sector over the past decades, especially in supermarkets and liquor. Besides, Woolworths is expanding to hardware market in recent years. Owning to the large company size and outstanding performance in previous years, it is one of the top 50 stocks listed in ASX. The chosen competitor, Wesfarmers has also been growing substantially in recent years. Moreover, it has now triumphed in market capitalisation over Woolworths because of the upturn of Coles, the rival of Woolworths Supermarkets.

Despite the bad economic atmosphere in 2008 and 2009, both Woolworths and Wesfarmers grow healthier than many other companies from 2009 to 2011 showing that the business is robust, resilient and competitive among each other.

The latest 3 annual reports of these companies are used and served as the most concerned data. The analysis is mainly based on companies’ profitability, efficiency, liquidity, long-term solvency risk and leverage, and market-based ratio. In addition, some of the related business news is referred to draw out the clearer explanations of the strengths and weaknesses.

Since all analyses are based on historical performance, this report has a limitation of forecasting the growth and change in future. Also, please be informed that many of the ratio analyses are based on a point in time.