Student name – ID TX YYYY Assignment – Company Executive Summary Contents Page Number 1 Introduction - Background and Business 2 2 Company Analysis - Current financial performance, Key financial...

Rati Sharma – ID         2019-18
        Assignment – Coles Group Ltd
(
Coles Group Ltd
2019-18
name: RATI SHARMA
Student id:
)
Executive Summary
In this discussion we will try to analyze the Coles Group Ltd ratios. In the ratio analysis we will discuss on the various ratios like the profitability ratios, efficiency ratios, liquidity ratios and gearing ratios. The analysis and evaluation of these ratios will help the investors to understand the various benefits and disadvantages of Coles Group. To analyze the ratios of the Coles Group we have considered the latest audited financial statements of Coles Group for 2019 and 2018. A comparison has been made in order to find the improvement or decline in the ratios of Coles Group in 2019 compared to 2018. This will help us to analyze whether the cu
ent position of the company is good and is expected to enhance in the future or there will be losses incu
ed by the company which can impact the shareholders and their dividend payment. We will also discuss the future prospects of Coles Group and the various initiatives that can be adapted by them in order to enhance the company’s growth and profitability.
Contents
                                            Page Numbe
1    Introduction - Background and Business                            2
2    Company Analysis - Cu
ent financial performance, Key financial highlights,
Economic outlook                                        
3    Ratio Analysis
    3.1        Profitability ratios                                
    3.2        Efficiency ratios                                
    3.3        Liquidity ratios                                    
    3.4        Gearing ratios                                    
4    Recommendations and overall assessment                            
5    References/Bibliography                                    
Appendices – Excel Spreadsheet
1    Introduction
1.1        Background and Business
Discussion
Coles Group Ltd
The Company we will discuss in this the Coles Group. Coles group is a supermarket chain and is an Australian company dealing in foods and groceries in Collingwood, Victoria since 1914. In terms of revenue it is the second biggest retailer operating in Australia after Woolworths. Since 2018, Steven Cain is the newly appointed CEO of Coles Group. James Graham is the Chairman of Coles Group. There are approximately 112298 employees working in Coles Group. There are more than 2500 retail outlets of Coles Group present all over Australia and tries to serve quality services and value creation to around 21 million customers each week.
The net revenue of Coles is AUS$38.464 billion in 2019. Net income of Coles is AUS$1.467 billion. The total asset acquired by Coles Ltd was AUD$9.777 billion and its equity financing amounted to AUD$3.357 billion. Coles is present in various parts of Australia. The first store of Coles was opened in Melbourne subu
of North Balwyn in the year 1960.
Business segments
Company deals with selling retails and consumer services products in an around Australia. the core products in which Coles deals are Coles supermarket where all types of grocery and consumer products and services are available to the customer, Coles online where customer can order their purchase anytime, anywhere and by offering home delivery services along with night pick and drop facilities to the customers;
Coles liquor offers the customers various types of liquor; Coles express which is a fuel and convenience retailer; Coles flybuys which is the loyalty program offered by the company to the customers and Coles financial services offering various financial services like insurance, credit cards and personal loans to the Australian families.
It is a big retailer in the supermarket chain of stores. Thus, it is a retail, supermarket and consumer services stores in Australia and operates within this segment. The major competitors of Coles Group are Woolworths, Amazon, Walmart and the small and medium sized convenience stores who are price competitive and offer substitute products which are the major challenges for Coles.
2    Company Analysis
    2.1        Cu
ent Financial performance, Key financial highlights, Economic outlook
Discussion
Summary of financial performance for the reporting yea
The financial performance of Coles Group Ltd as on 2019 is not sound as compared to the previous year 2019. This can be observed with respect to the net income of Coles Group in 2019 which is AUD $1434.7 million compared to AUD $1578.8 million in 2018. This is a decline of 9.13% in 2019 compared to the previous year. There has also been a drastic change and a decline of 1.74% in the revenue of Coles Ltd in 2019 compared to the 2018. Although the gross profit of the company was visible and was higher by 2.05% in 2019 compared to 2018, yet it was due to lower cost of goods sold incu
ed on the goods and services by Coles Group. The decline in the profitability of Coles in 2019 was basically due to the global slowdown combined with the global pandemic covid-19 at the end of the year which led to downfall of the business of Coles as well as the retail segments of Australia. There was positivity observed in the Coles Group business with the free cash flow from the operating, investing and financing activities reflecting positive. But, compared to the previous year 2018, the cu
ent year free cash flow was downgraded by 2%. But, despite of decline in the profits of Coles Group they have been able to pay promptly to the shareholders of the company in 2019 compared to the previous year. The growth in the dividend payout by Coles in 2019 was 5.12% compared to 2018.
List the key financial highlights/events of the reporting year (can use dot points)
· There has been growth in Sales of Coles by 3.1% in 2019 compared to 2018
· The customer satisfaction level of Coles have increased by 87.7% for Coles in 2019
· There has been cash realization of 110% recorded for 2019 for Coles Group
· The amount of taxes paid by Coles in 2019 was $3.7 billion
· Coles donated $115 million for the support of the communities in which it operates its business.
· An amount of $32.1 billion of payment was paid to the suppliers of Coles who are generally the farmers, small convenience stores and smaller players in the Australian community.
· $19 million of funding was made to the various food producers including the farmers in Australia through a scheme which is known as Coles Nurture Funds.
· There was a statutory growth in the sales of Coles in their supermarket segment by 3.2% and by 0.8% in their liquor segment in 2019.
· The net cash flow from the operating activities of Coles increased by 19.1% in 2019.
· There has been a growth in the sales of online sales in Coles by 30%. It also generated a huge profit for the first time in online sales which amounted to $1.1 billion.
· In 2019, the board of Coles Group declared a fully franked dividend of 35.5% per shares.
Economic Outlook, Future of Coles Group Ltd (can use dot points)
The vision of Coles Group Ltd is aimed to become the largest retailers and supermarket chain by overtaking Woolworths in Australia. They have also plans to enhance the value of the shareholders of the company. They wanted to explore the liquor and food market of the retailing industry which is constantly challenged by new entrants. To encounter this issue they are trying to transform themselves by adapting themselves to the sustainable programs and policies through partnerships and collaboration with various companies in terms of technologies, energy efficiency and generations of new and innovative ideas.
The major segments where Coles Groups is trying to bank upon are as follows:
· There are tremendous opportunities in the flybuys segments of Coles where it can offer the customers with new products, services and various offers.
· Coles is planning to edifice the meat business which will be supervised by the export team to the amount of $400 million.
· There will be an expenditure of $1 billion by 2023 by Coles which will be targeted to enhance the Smarter Selling initiatives through implementation of new and advanced technologies, well integrated supply chain management, lowering the expenses and controlling the cost. This will ultimately increase the efficiency of Coles in future.
· There will be long term partnerships with technology based company Witron. This will be to automate the distribution centers of Coles.
· Further partnership with Ocado will help to edifice the customer fulfilment centers for the online orders and will be a constituent of the smarter selling program.
· Coles will be continuing to work with the community in which it operates by inclusion of diversity and creating a congenial workplace culture.
· Finally, to emphasize on the sustainability model Coles is targeting to divert 90% of the wastes...