Final Report Analysis
2.The asset utilization ratios indicate the efficient operation of Woolworths. No matter the inventory turnover, fixed asset turnover or total asset turnover, Woolworths is the best in all four companies. We can infer it is the leader of the retail industry.
3.However, we had to remind the investor keeps an eye on liquidity ratios and debt utilization ratios. The high debt to total assets and the decreasing time interest earned represent the company will face the financial dilemma if the economy fall into the recession.
4.According the economy prediction, Australian economy will develop in 2003. Therefore, the possibility of recession occurring is very low; we can overlook liquidity ratios and debt utilization ratios and invest the company.
To the investor, the financial ratios analysis in 2002 show the operation and the economic environment of Woolworths is pretty good. They can invest the company. At the same time, we suggest the manager of the company put his mind on the financial operation risk, lower the short-term and long-term debt and improve the current ration and quick ratio.
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