Assume that you are also considering to invest in the stock of BHP Billiton. You have limited fund to invest and therefore, you can invest in either of the company (BHP Billiton or your allocated company). Compare your company’s financial statements, and performance, with those of the BHP Billiton. If you were making a decision to invest in one of the two companies, which company would you choose? Discuss. [In evaluating and comparing the companies, use appropriate ratios and other analysis. Provide clear justification as to why you believe your approach to evaluation is appropriate for investment decision purpose].

 

INCOME STATEMENT For the year ended 30 June 2018 Continuing operations Revenue Expenses Consolidated RESTATED Note 2018 Sm 2017 $m 66,883 64,913 Raw materials and inventory Employee benefits expense (45,718) (14,633) 2 (9,375) (8,746) Freight and other related expenses Occupancy-related expenses Depreciation and amortisation (757) (857) Impairment expenses Other expenses Total expenses 2222 (2,976) (2,882) (1,198) (1,175) (421) (44) (2,767) (2,832) (63,202) (61,169) Other income 1 283 286 Share of net profits of associates and joint venture 18 97 147 390 433 Earnings before interest and income tax expense (EBIT) Finance costs 4,061 4,177 2 (211) (248) Profit before income tax 3,850 3,929 Income tax expense 3 (1,246) (1,169) Profit from continuing operations 2,604 2,760 Discontinued operations Loss after tax for the year for Bunnings UK and Ireland Profit after tax for the year for Wesfarmers Curragh Pty Ltd (Loss)/profit after tax for the period from discontinued operations Profit attributable to members of the parent Earnings per share attributable to ordinary equity holders of the parent from continuing operations Basic earnings per share Diluted earnings per share cents cents 230.2 244.7 229.8 244.2 Earnings per share attributable to ordinary equity holders of the parent Basic earnings per share 13 105.8 254.7 Diluted earnings per share 13 105.6 254.2 && 20 (1,657) (101) 20 250 214 (1,407) 113 1,197 2,873