Comparison Of Woolworths Limited And Harvey Norman Limited

Company description:

Basis Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Woolworths Limited	Harvey Norman Limited
1. Products and services	It is a major retail Australian company which offers various products and services to its customers such as drinks, liquor, freezer, dairy products, meat, deli and seafood, fruit and vegan, pantry etc. through its retail stores. Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	It is an Australian company which operates in retailing of furniture, computers, bedding, consumer electrical products, communications products etc. It offers its products it the clients through various franchises.
2. Chief executive director	CEO of the company is Brad Banducci (Annual Report, 2017).	K.L. Page is the chief executive officer of the company.
3. Salary of CEO	Salary of CEO is $ 2,500,804 in the year of 2017.	Salary of CEO is $ 2,064,922 in the year of 2017.
4. Profit or loss in 2017	Profit of the company in 2017 is AUD 1482 million.	Profit of the company in 2017 is AUD 449 Million (Annual Report, 2017).
5. Latest dividend paid	Company has paid 84cent per share as dividend amount.	Company has paid 12 cent per share as dividend amount.
6. Size of the business	Total size of the business is AUD $ 4,18,97,44,000.	Total size of the business is AUD $2,29,15,00,000
7. Number of employees	Total employees of the company are 2,02,000.	Total employees of the company are 1,05,000.
8. Share price	Total share price of the company on 12^th Jan 2018 is $ 27.25.	Total share price of the company on 12^th Jan 2018 is $ 4.38.

Products and services

(Annual Report, 2017)

Share price movements:

Share price movement of both the companies and with comparison of AORD is as follows:

Date	WOW Stock Price	AORD stock price

08-12-2017	26.91	6077.4
15-12-2017	27.07	6087.1
22-12-2017	27.53	6167.3
29-12-2017	27.3	6167.3
05-01-2018	27.25	6229.7
12-01-2018	27.08	6176.8
19-01-2018	27.08	6119.3

(Yahoo Finance, 2018)

Date	HVN Stock Price	AORD stock price

08-12-2017	4.2	6077.4
15-12-2017	4.09	6087.1
22-12-2017	4.18	6167.3
29-12-2017	4.17	6167.3
05-01-2018	4.32	6229.7
12-01-2018	4.38	6176.8
19-01-2018	4.41	6119.3

(Yahoo Finance, 2018)

The stock price of Woolworths limited and Harvey Norman limited has been evaluated in context with the AORD.

The stock price of WOW stock in context with the AORD has been evaluated and it has been found that the stock price of WOW is more volatile than stock price of AORD. The changes into both the stock price explains that the WOW stocks are not driven by the AORD stocks and the changes have taken place into the stock price of WOW due to some other factors. On 8-12-2017, the stock price of the company was 26.91 which have been enhanced to 27.07 due to bit high demand in the market (SMH, 2018). Further, the stock price has been enhanced by 1.70% due to changes into the AORD stocks and the better economical position.

In addition, on 29^th Dec, the stock price of the company has been lowered due to 27.3 due to financial analyst report though no changes have occurred in AORD stock (Fortune, 2018). Further, on 5 Jan 2018, stock price of WOW has been lowered and stock price of AORD has been enhanced due to few internal changes into the company (Yahoo Finance, 2018). In addition, on 12^th Jan 2018, stock price of AORD and WOW both has been lowered due to changes into the economic position and less interest of the investors. Lastly, on 19^th Jan 2018, the stock price of WOW as not been changed from last week but AORD prices have been lowered (FT, 2018). This evaluation expresses that the stock price of Woolworths limited has been affected by industry as well as internal changes.

The stock price of HVN stock in context with the AORD has been evaluated and it has been found that the stock price of HVN and AORD both are volatile though the volatility level of HVN is quite higher. The changes into both the stock price explains that the HVN stocks are driven by the AORD stocks as well as few internal changes such as financial analyst report, dividend announcement etc. (SMH, 2018). On 8-12-2017, the stock price of the company was 4.2 which have been lowered to 4.09 on 15 Dec 2017 due to less interest of investors in the company. Further, the stock price has been enhanced by 2.20% due to changes into the AORD stocks and the better economical position as well as some new announcement has also helped the company to enhance the price (Yahoo Finance, 2018).

Chief executive director

In addition, on 29^th Dec, the stock price of the company has been lowered by 0.24% which explains about the slightly changes into the stock price of the company. Further, on 5 Jan 2018, stock price of HVN has been enhanced and stock price of AORD has also been enhanced due to better economic position and the announcement about the financial position of the company (FT, 2018). In addition, on 12^th Jan 2018, stock price of AORD has been lowered and HVN stock price has been due to continuous attraction of investors from last week. Lastly, on 19^th Jan 2018, the stock price of HVN has been enhanced from last week but AORD prices have been lowered (Yahoo Finance, 2018). This evaluation expresses that the stock price of Harvey Norman limited has been affected by industry as well as few internal changes.

Further, the gain and losses have been evaluated in 7 weeks of the portfolios and it has been evaluated that the investor has gained the profit, stock price of both the comapny has been enhanced and thus the total profit of the portfolio is $ 156.

	CLOSING SHARE PRICE	NO. OF	PRICE OF	TOTAL
COMPANY NAME	Friday 8 2017	SHARES	SHARES	INVESTMENT
1	Woolworths Limited	292	26.91	7857.72
2	Harvey Norman Limited	510	4.2	2142
TOTAL INVESTMENT				10000

	CLOSING SHARE PRICE	NO. OF	PRICE OF	TOTAL
COMPANY NAME	Friday 19 2018	SHARES	SHARES	INVESTMENT
1	Woolworths Limited	292	27.08	7907.36
2	Harvey Norman Limited	510	4.41	2249.1
TOTAL INVESTMENT				10156

Through the evaluation and the tracking on both the stock, it is recommended to the investor to hold the stock as the future trend of both the stock explains about great increment in the stock price. The changes into the stock price also make an impact on AORD which explains that the stock position of the companies would be better. Though, the stock position of HVN is way better than WOW. To conclude, if the 100 Woolworths stock would be sold by the company and the amount would be invested into the HVN stock than the profitability level of the portfolio would be increment.

	CLOSING SHARE PRICE	NO. OF	PRICE OF	TOTAL
COMPANY NAME	Friday 19 2018	SHARES	SHARES	INVESTMENT
1	Woolworths Limited	192	27.08	5199.36
2	Harvey Norman Limited	1124	4.41	4956.84
TOTAL INVESTMENT				10156

Part 3:

Identification of key financial data:

	Company 1	Company 2
Wollworths Limited	Harvey Norman Limited

Revenue / Sales	55668600000	784328000
Interest Expense	193600000	676000
EBIT	2081800000	9201000
Net Profit Before Tax	2132400000	8525000
Net Profit After Tax	1533500000	5979000

Current Assets	6994200000	149970000
Total Assets	22915800000	212652000
Current Liabilities	8824200000	150454000
Total Liabilities	13389800000	150613000
Total Equity	9526000000	62039000

Profitability ratio:

Profitability ratios includes calculation of return on equity, return on assets and profit margin. In case of Woolworths limited, Return on equity, return on asset and profit margin, all the three ratios express about the better performance and increased profitability level of the company. Following is the calculations of profitability ratios of last years:

Profitability
Rqturn on equity	Net profit/revenues	2.75%	-2.12%	3.53%	4.02%	3.85%
Return on assets	Net profit/Equity	16.10%	-14.58%	19.81%	23.91%	25.03%
Profit margin	Net profit / Sales	2.75%	-2.12%	3.53%	4.02%	3.85%

In case of Harvey Norman Limited, all the three ratios express about the better performance and increased profitability level of the company. Following is the calculations of profitability ratios of last years

Profitability
Rqturn on equity	Net profit/revenues	0.76%	-1.12%	0.76%	0.55%	0.92%
Return on assets	Net profit/Equity	9.64%	-14.05%	8.15%	5.87%	8.03%
Profit margin	Net profit / Sales	0.76%	-1.12%	0.76%	0.55%	0.92%

It explains that the profitability position of Woolworths limited is way better than the Harvey Norman Limited. So, Woolworths limited is a better option for the invetsors in context with investing the amount.

Salary of CEO

Stability ratios includes calculation of Debt to equity ratios and gearing ratios. In case of Woolworths limited, Debt to equity position of the company has been lowered and same as happened with gearing ratios. Following is the calculations of stability ratios of last years:

Stability

Debt to equity ratio	Net debt/ shareholder’s equity	0.32	0.51	0.44	0.42	0.49
Gearing ratio	Net debt/ (net debt+ shareholder’s equity)	0.24	0.34	0.30	0.30	0.33

(Morningstar, 2018)

Further, in case of Harvey Norman limited, Debt to equity position of the company has been lowered and same as happened with gearing ratios. Following is the calculations of stability ratios of last years

Stability

Debt to equity ratio	Net debt/ shareholder’s equity	0.24	0.35	0.27	0.22	0.18
Gearing ratio	Net debt/ (net debt+ shareholder’s equity)	0.19	0.26	0.21	0.18	0.15

(Yahoo Finance, 2018)

It explains that the stability position of Woolworths limited is way better than the Harvey Norman Limited. So, Woolworths limited is a better option for the investors in context with investing the amount.

Liquidity ratios includes calculation of cash ratios and capital intensity ratios. In case of Woolworths limited, cash position of the company has been lowered whereas capital intensity ratios have been enhanced. Following is the calculations of liquidity ratios of last years:

Liquidity

Cash ratio	cash equivalents + cash / current liabilities	0.793	0.826	0.836	0.949	0.907
Capital intensity ratio	Total assets /sales	0.41	0.40	0.42	0.40	0.38

(Morningstar, 2018)

Further, in case of Harvey Norman limited, cash position of the company has been enhanced whereas capital intensity ratios have been lowered. Following is the calculations of liquidity ratios of last years

Liquidity

Cash ratio	cash equivalents + cash / current liabilities	0.997	0.974	1.054	1.078	1.107
Capital intensity ratio	Total assets /sales	0.27	0.30	0.28	0.30	0.31

(Morningstar, 2018)

It explains that the liquidity position of Harvey Norman limited is way better than the Woolworths Limited. So, Harvey Norman limited is a better option for the investors in context with investing the amount.

Thus, through the above evaluation, it has been found that the Woolworths stock are way better in context with the investment than other stocks. To conclude, investor must invest into the stock of Woolworths limited.

References:

Annual Report, 2017. Harvey Norman Limited. (Online). Available from https://clients.weblink.com.au/news/pdf/01902066.pdf [Accessed 18 Feb 2018].

Annual Report, 2017. Woolworths limited. (Online). Available from https://www.woolworthsgroup.com.au/icms_docs/188795_annual-report-2017.pdf [Accessed 18 Feb 2018].

Fortune, 2018. Woolworths limited. (Online). Available from https://fortune.com/change-the-world/woolworths-holdings/ [Accessed 18 Feb 2018].

FT, 2018. Harvey Norman Limited. (Online). Available from https://markets.ft.com/data/equities/tearsheet/forecasts?s=HVN:ASX [Accessed 18 Feb 2018].

FT, 2018. Woolworths limited. (Online). Available from https://markets.ft.com/data/equities/tearsheet/forecasts?s=WOW:ASX [Accessed 18 Feb 2018].

Morningstar, 2018. Harvey Norman limited. (Online). Available from https://financials.morningstar.com/cash-flow/cf.html?t=HVN&region=gbr&culture=en-US&platform=sal [Accessed 18 Feb 2018].

Morningstar, 2018. Woolworths limited. (Online). Available from https://financials.morningstar.com/balance-sheet/bs.html?t=WOLWF&region=usa&culture=en-US [Accessed 18 Feb 2018].

SMH, 2018. Harvey Norman limited. (Online). Available from https://www.smh.com.au/business/markets/quotes/news/HVN/harvey-norman-holdings-limited [Accessed 18 Feb 2018].

SMH, 2018. Woolworths limited. (Online). Available from https://www.smh.com.au/business/markets/quotes/news/WOW/woolworths-group-limited [Accessed 18 Feb 2018].

Yahoo Finance, 2018. AORD. (Online). Available from https://au.finance.yahoo.com/quote/%5EAORD/history?p=^AORD [Accessed 18 Feb 2018].

Yahoo Finance, 2018. Harvey Norman limited. (Online). Available from https://au.finance.yahoo.com/quote/HVN.AX/history?p=HVN.AX [Accessed 18 Feb 2018].

Yahoo Finance, 2018. Woolworths limited. (Online). Available from https://au.finance.yahoo.com/quote/WOW.AX/history?period1=1510857000&period2=1516473000&interval=1d&filter=history&frequency=1d [Accessed 18 Feb 2018].

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