Topic 1: Case Study
You are an accountant at CWP Accountants & Investment Advisers. You have been approached by a group of investors for your professional advice on investing in Woolworths Ltd.
As an investor, your client is interested in sustainable long term value. Your client is a strong believer in supporting Australian made products and Socially Responsible Investing. The latter would mean sustainable, socially conscious, “green” or ethical investing. It is any investment strategy which seeks to consider both financial return and social good.
Your client is also a strong believer in sourcing from ethical suppliers that maintain good workplace health and safety standards in their factories.
Required:
Please go to:
http://www.woolworthslimited.com.au/annualreport/2014/files/Woolworths_Annual_Report_2014.pdf
and access the company’s annual report for 2014.
Prepare a report for your client. Your report should include:
a. A description of the core business of the company including full details of its operating activities.
b. A discussion on the company’s progress against its strategic priorities.
c. A discussion on any significant issues emerging from the Chairman’s Report.
d. A discussion on any significant issues emerging from the Managing Director’s Report.
e. A discussion on the Corporate Governance Statement.
f. A calculation of the key financial ratios for 2014.
g. An overall evaluation of the company and your recommendation on investing in the company.
In preparing your report, please consider the media reports such as:
Woolworths betting on booze and gambling profits | News ...
www.news.com.au/.../woolworths-betting...booze.../story-e6frfm1i-122622...
Dec 16, 2011 - WOOLWORTHS is planning on expanding its gambling and alcohol business as the profit margins are three times higher than on groceries.
Woolworths under pressure to sign accord after fatal ... - ABC
www.abc.net.au/news/2013-10-11/woolworths...to-sign.../5017098
Oct 10, 2013 - Woolworths is again under pressure to sign a voluntary safety accord following another fatal fire at a Bangladesh clothing factory this week.
Farmers slugged for Woolworths Jamie Oliver campaign - ABC
www.abc.net.au/news/2014-06-06/nrn-ausveg...woolworths/5505808
Jun 5, 2014 - Photo: Farmers say they are being forced by supermarket Woolworths to pay for an advertising campaign starring celebrity chef Jamie Oliver ...
Milk wars: Farmers lash out at Woolworths' AFL dairy ad
www.smh.com.au/.../milk-wars-farmers-lash-out-at-woolworths-afl-dairy-a...
May 27, 2015 - It's also no secret that the state's dairy farmers are doing it tough, with many exiting the industry in the past four years. But with Woolworths...
Topic 2: Case Study
Jane, a friend of yours, has informed you that she is planning to set up a coffee shop. You have advised her to be cautious, as the coffee market appears to be very competitive. She agrees, but says that she has a strategy to help ensure that her business does not make a loss. She stated: “I am going to work out the exact full cost of making one cup of each type of coffee and then set my prices to ensure that this cost is fully recovered, along with a profit margin”.
In further discussion with Jane, she provided the following additional information regarding her business plan:
• The business will operate from rented premises, with a fixed rental cost per month, and be responsible for heating and electricity costs.
• A coffee machine and related equipment will be purchased, along with furniture and sufficient coffee cups, saucers, spoons etc.
• Jane will work in the business, but plans to hire additional staff to work on a casual basis during busy periods.
• Suppliers have been identified to supply the business with coffee, milk and other supplies at prevailing market prices.
• Some advertising will be undertaken, in local newspapers and on local radio, at least while the business is getting established.
• A public liability insurance policy will be taken out to cover risks such as accidents involving customers and staff.
Required:
1. Discuss the difficulties associated with Jane’s plan to “work out the exact full cost of making one cup of each type of coffee”. (7 marks)
2. Jane intends to set prices “to ensure that ... cost is fully recovered, along with a profit margin”. What type of pricing model is Jane adopting and what difficulties may arise in trying to implement her pricing strategy? (3 marks)
Please note the following:
• Format: Business report
• Contribution to overall assessment: 20%
• Length: 2 500 – 2 600 words
• Due date: 10th September at 11.55pm
• Your work must comply with the University’s General Guide for the Presentation of Academic Work.