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Introduction
Financial statement analysis helps to identify the trends of the business operation while comparing the financial ratios across the multiple periods of times. These statements, in turn, allow the analyst to measure company's efficiency, profitability, liquidity and cash flow. Financial statements can be categorized into three major types namely cash flow statement, income statement and balance sheet. In this business report, Woolworth Limited a retail industry has been taken into account. In balance sheet company's liabilities, shareholders equity and assets have been analyzed. From the income statement gross profit, net profit and operating profit of the business firm has been analyzed. In the cash flow statement analysis cash flow from the investing activities, operating activities and the financing activities has been calculated. This paper also analyses the tax rate and tax expenses incurred in the business operation along with key difference also analyzed.   
Analysis of cash flow statement
I. List of items in the cash flow statement
As per the comment of Armstrong et al. (2015, p.10), the cash flow statement reflects from where the cash is generated and spent over the specific period of time. The generated cash in the business entity is termed as cash inflows and the cash being spent from the end of the business activities are known as the cash outflows. These two concepts help to analyze the cash flow statement of the Woolworths limited. It is very important for an organization to analyze the long-term solvency and liquidity in the financial statement. There are three major components of the cash flow statements, which are investing activities, operational activities, and financing activities.   
 
II. Comparative analysis of three broad categories of cash flows
Operating activities:
Operating activities are those activities where the cash has been generated from the normal business activities. This in term shows the significance of the operational performance and core business health. The cash from the operating activities of Woolworths limited is mainly classified into the receipts received from the customers, net interest paid, income tax paid and the payments are done to its employees and suppliers (Ball et al. 2016, p.40). It has been observed from the cash flow statement that net cash provided from the operating activities in the year of 2017 is of $3122.0 Million, where this is has been increased compared with the previous year. In 2016, it was of $2357.5 and in 2015 the net cash generated from the operating activities are of $3345.1 Million. In the operating income, the noncash items like depreciation have been added. It has been observed from the statement that the accounting profits are reduced in the year of 2016 compared to the previous year and also rose in the next year. This, in turn, states that the company is maintaining viability in the current business operations and plans. 
 
Investing Activities:
Cash flow from the investing activities includes the net cash outflow from the long-term assets like buildings, lands, equipment, and the cash inflow from the businesses, sales of assets and securities (Barua and Saha, 2015, p.245). The net cash used for investing activities in the year 2016 is of $1266.7M and in 2017 is of $1431.4M and in 2015 it is of $1333.9M. It has been observed that the business entity has made long-term investments compared to the previous years. These investments in turn, help the organization for future growth (Denison and Kim, 2018, p.10).    
 
Finance Activities:
Cash flow from the finance activities is the cash inflow from the bond sales and cash outflow to the respective entities investors (Collis et al. 2017, p.63). This, in turn, suggests the interest paid to the bondholders. In the cash flow statement of Woolworths limited net cash used in the financing activities is of $1729.3M in 2017 and $1474.9M in 2016. The increased cash outflow in the finance activities states that the plant has spent more cash towards reducing the debts.
 
Other Comprehensive Income Statement 
III. Items reported in another comprehensive income statement
As stated by Doidge and Dyck (2015, p.70), the comprehensive income for an organization is the combination of net loss or net income reported in the income statement and other comprehensive income prepared during the specific period of time. From the other comprehensive income statement includes losses or gains, derivatives from the financial instruments, foreign currency adjustments and losses or gains released from the postretirement benefit plans (Frankel and Sun, 2018). The items included in the other comprehensive income statement of Woolworths limited are, profit/ loss occurred for the period, non controlling interests, equity holders of the parent entity, total comprehensive income drawn from the net discontinued and continued operations. 
Including these items superannuation plans, investments in the equity security, foreign currency translation reserves and movement of fair values in the cash flow hedges also were included in the comprehensive income statement (Madineh et al. 2017, p.189).    
IV. Understanding of each item reported in another comprehensive income statement
From the other comprehensive income of consolidated statement, the net profit gained and loss incurred is listed (DeBacker et al. 2015, p.130). It has been observed from the three years financial report that the Woolworths limited has incurred profit in the year of 2017 of $1593.4M, whereas the net loss incurred in 2016 is of $2347.9M. In the year of 2015, the business firm has gained the profit of $2137.4M.  
Fair value hedge analyses the changes in the fair value of the recognized liabilities and assets of the firm. This, in turn, acts as attributable to the particular risk and also affects the loss or profit.   
Foreign currency translation has been used to convert the foreign subsidiaries to the reporting currency (Miller et al. 2018, p.126). The net comprehensive income incurred for the periods of 2017 is of $1595.7M. The total comprehensive income attributable is of $1595.7M and this includes equity holder’s payment from the parent entity and non controlling interest. Total comprehensive income available from the continuing business operation attributable is of $1480.0M in 2017.  
V. Reason for not reporting in the Income Statement/Profit and Loss Statement 
Some of the items in the comprehensive income statement have not been reported in the profit/loss statements or an income statement. Losses from pension, foreign exchanges and the debts of the business activities are not included in the P/L statements as these are derivative components. The elements of another comprehensive statement mainly focus on the stakeholder's payments where the elements of the profit or loss focus on the company's net profit earned in the business activities (Muller and Kolk, 2015, p.450).   
 
Accounting For Corporate Income Tax 
VI. Tax expense in latest financial statements
Woolworth's limiteds tax operating framework and the tax corporate governance is guided by the Australian tax corporate governance body policy (Ramli et al. 2017, p.190). Following this government policy is helping the organization to approach the tax tariffs and tax affairs. The associated tax risks and affairs are regularly reviewed by the companies group of Tax teams. In the recent year, the company has paid the net tax of $1928M, whereas the net tax collected is of $1573. The detail list of types of tax collected and paid is represented in the tabular format.   

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Table 1: Tax collected and paid by Woolworths Limited
(Source: woolworthsgroup.com.au)
The corporate tax paid in the year of 2017 reflects that the estimated tax liabilities paid in the year plus paid income tax installments. 
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Figure 1: Tax paid in 2017
(Source: woolworthsgroup.com.au)
The gaming tax shown in the chart is paid by the ALH namely the Australian leisure and hospitality group Pty Ltd. It has been observed from the above analysis that the company is holding 75% of the interest from ALH.  
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Figure 2: Tax collected in 2017
(Source: woolworthsgroup.com.au)
The net GST collected from the business activities are less than that of the claimed input tax credits.  
 
VII. Company's tax rate compared with the accounting income
A tax rate is a percentage where the company is taxed by the end of the government regulations and taxation acts. It is the tax imposed by the states or federal government based on the corporation earnings and individuals taxable income (Stice et al. 2017, p.49). In Australian companies, the tax expenses are of $650.4 million. The Australian corporate tax rate is of 30%. The income tax has been divided into deferred tax and the current tax.       
 
VIII. Deferred tax assets/liabilities  
As per the comment of (Takhtaei and Karimi, 2017, p.90), the deferred tax has been calculated using the available balance sheet method. The deferred tax provides the temporary difference between the liabilities and assets for taxation and financial reporting purpose. These tax assets are measured based on the enacted tax rates. The deferred tax assets and tax liabilities of Woolworths limited is represented in the tabular format. Deferred tax assets and liabilities as recorded in the balance sheet to analyze the probable tax benefits and taxable income. The net deferred tax liabilities found in the current financial year of 2017 is of $497.7 million. Deferred tax liabilities or assets refer the situation where the business operation has overpaid the tax in its designed balance sheet.
  
IX. Income tax payable 
Income tax payable represents the amount has been expected to pay to the taxation authorities on the basis of the taxable income for the current time period (ul Amin et al. 2016, p.620). The current tax payable has been recorded in the financial statement of the Woolworths limited. The income tax payable has been recorded in the financial statements of eth Woolworths limited as $668.1 million whereas the income tax expenses incurred in the year of 2017 is of $650.4million. Income tax payable is different from eth income tax expenses incurred in the financial activities. Income tax expenses have been calculated on the basis of the owned tax of the companies while following the standard business taxation and accounting rules. In this scenario, the income tax payable is calculated as the actual amount the company owns the taxes based on the tax code (Warren and Jones, 2018, p.251). The income tax payables are recorded on the balance sheet and also act as liabilities for the organization until the company is going to pay the bills.      
 
X. Difference between the income tax expenses paid
The income tax expenses shown in the consolidated profit or loss statement is of $60.4 million. The income tax paid shown in the consolidated cash flow statement is of $668.1 million. Income tax expenses from the end of the company signify the expenses incurred from the operating activities. The income tax paid by the organization defines the tax paid is calculated deduction after net payables.   
 
XI. Examining firm’s tax expense 
It has been very confusing to analyze the difference between the tax payables and tax expenses. The tax expenses in the organization affect the net earnings which have been given as a liability. This incorporated tax must be paid by the organization to the respective federal government. The loss in occurrence on the organization also recognized using the financial statements of the organization.     
Conclusion 
In this paper, a brief analysis of the financial statements of Woolworths limited has been analyzed. Each and every element of the cash flow statement has been elaborated. Three latest consecutive years the annual report has been considered in the study. Three of the main elements of the cash flow statement like operating activities, financial activities, and investing activities have been analyzed with proper examples. This, in turn, helped to conclude either the company is going through the net loss or gaining profit. Another comprehensive income statement also considered for the study. Each of the items in the comprehensive statements is briefly analyzed. Tax expenses and the tax rates of the organization are analyzed in a brief manner. Finally, this paper helped to make insightful explanation of the income statement, cash flow statement and also describes the tax expenses in very clear manner. This paper enhances the investor’s knowledge while investing in the business.     
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