PART A- Analysis of the Annual Report of Coles Group QUESTION A 1 i) Rights-of-use assets According to its annual report, the Coles Group acknowledges the rights-of-use assets for leased assets. The balance sheet is significantly affected by the recognition of rights-of-use assets since it raises the value of the company's assets. As the company will have to make lease payments over a predetermined period due to the recognition of these assets, this may also affect the company's future financial statements. As a result, the company will have more obligations, which could impact its financial ratios. The annual report of Coles seems to be decreased in 2022 from $ 7.28 million to $ 7.19 million which could obviously affect the financial statements. …show more content…
1. Operating Cash Flow Ratio: Operating Cash Flow / Total Debt- This ratio illustrates how well the business can produce enough cash flow from its core operations to pay down all its debt. A higher ratio shows a better ability to meet debt commitments and a stronger cash flow situation. 2. Cash Flow to Sales Ratio- This ratio displays the amount of cash flow produced in relation to net sales for the company. A higher ratio denotes a stronger cash flow position by implying a more effective translation of revenues into cash flow. 3. Cash Flow Adequacy Ratio: Operating Cash Flow / Total Liabilities- This ratio evaluates the company's ability to generate enough cash flow to pay off all its liabilities. A higher ratio denotes a stronger cash flow situation and a higher ability to pay debts. We may assess Coles Group's cash flow status by using these ratios, looking at the data from the Consolidated Statement of Cash Flows, and looking at the reconciliation in the financial statements. The Coles Group exhibits a favourable cash flow situation in 2022 based on the facts currently available. The company generated a sizable amount of cash from its core operations, according to the Consolidated Statement of Cash Flows, which shows a net cash inflow from operational …show more content…
Government-imposed restrictions, changes in consumer behaviour, and supply chain disruptions presented significant challenges for companies like Coles Group. During this period, Coles Group would have had to adapt its operations to comply with health and safety measures, implement online shopping and delivery services to cater to changing customer preferences, and ensure the availability of essential goods amidst increased demand. The pandemic may have also resulted in additional costs related to employee health and safety measures. Coles Group's ability to respond swiftly and effectively to the challenges posed by the pandemic would have influenced its performance during this period (Smith & Johnson,