Comparison Of Woolworths Limited And Harvey Norman Limited
- Company description:
|
Basis |
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. |
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 12th Jan 2018 is $ 27.25. |
Total share price of the company on 12th 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 29th 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 12th 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 19th 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 29th 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 12th 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 19th 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®ion=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®ion=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].