Financial Case Study Analysis Help Examples Using Ratio Analysis

Finance Case Study Analysis Explanations


This example is written to provide insights on how to do ratio analysis for finance case for an Australian Company Woolworth (WWL) using DuPont, Operational ratios etc.

Growth & Profitability


Interpretations of Du Pont
The Du Pont analysis as given below clearly shows that ROE is in increasing trend due to increase in equity multipliers despite decreasing assets turnover and profit margin in last 4 years.
Du Pont
Year
2011
2012
2013
2014
Profit Margin
4.027%
3.308%
3.851%
4.022%
Assets Turnover
2.525835
2.538198
2.629927
2.510733
Equity Multiplier
0.36456
0.379415
0.405767
0.423566
ROE
3.71%
3.19%
4.11%
4.28%

Decomposition and Analysis of Sales growth
The decomposition of sales growth is done using horizontal analysis and using 2011 as base year as per our finance case study help experts analysis. It clearly shows that it is in decreasing trend due to spoiling health of retail sector profitability.
Profitability Analysis
Year
2011
2012
2013
2014
Sales Growth
NA
4.12%
6.83%
3.86%

Operation Analysis

The operation analysis will be done with the help of cash conversion cycle as suggested by our best UK finance assignment help specialists. It shows that company maintain a very less CCC but it is increasing trend so company will have to improve its operation to bring it to previous level.
Operation



Year
2011
2012
2013
2014
Average Inventory sales Days
    34.93
    33.37
    35.77
    38.52
Average Receivable Days
      4.32
      4.02
      4.36
      3.70
Average Payable Days
    38.62
    36.21
    34.70
    38.22
Cash Conversion Cycle
      0.63
      1.18
      5.42
      4.00

Investment Analysis

The investment analysis will be done with the help of return on equity (ROE) and Return on invested capital (ROIC) ratios. It shows that company maintains a stable investment ratios but it needs to improve it to compete with global giant like Walmart, Tesco etc.
Investment Ratios



Year
2011
2012
2013
2014
ROE
4%
3%
4%
4%
ROIC
10%
10%
10%
10%

Finance Analysis

The finance analysis will be done with the help of Debt/ Equity ratio which is calculated as company’s debt divided by its equity. The table clearly shows that it is in decreasing trend which in turn decreases the risks for the company.

Finance Ratios



Year
2011
2012
2013
2014
Debt to Equity ratio
      0.43
      0.59
      0.48
      0.41

Other ratios

The other ratio analysis will be done with the help of recurring NOPAT and sustainable growth ratio. The table clearly shows that both ratios are in increasing trend showing the improving operation and sustainability of the company respectively.

Other Ratios



Year
2011
2012
2013
2014
Recurring NOPAT
3.96%
3.92%
3.81%
4.03%
Sustainable Growth rate
3.71%
3.19%
4.11%
4.28%

Dividend Policy

The company does not have policy of paying dividend in last 4 years. Hence, no payout ratio can be calculated for the company.


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