Marks: 6/100

Deadline for submission: Before the lecture of Week 12.

Assume that you are an analyst following Woolworths at year-end 2017, and that you must produce pro-forma statements for 2018 that could be used as an input in the ReOI valuation model. Using all this rich information and completing the analysis with information from the annual reports, you are required to complete the following tasks:

1.   In the worksheet  named  ‘Q1. Projected revenue’,  detail your approach in forecasting Woolworth’s revenue for 2018. [2 marks]

2.   In the worksheet named ‘Q2. Pro-forma IS’, detail your approach in producing Woolworth’s

2018 pro-forma income statement, only up to operating income after tax (OI). [2 marks]

3.   In the worksheet named ‘Projected RNOA’, detail your approach in forecasting Woolworth’s

RNOA for 2018. [2 marks]

You are required to document all calculations, assumptions, and estimation choices for completing the above tasks using notes to each worksheet. The notes must explain and justify your approach when making the above projections using evidence. We expect to see many documenting and justifying every choice that you make. You are only required to submit this completed Excel spreadsheet for marking.
Note that we will not mark your answer relative to its closeness to the actual 2018 financials. Do not look at the annual reports from 2018 onward. We do not care about the accuracy of your forecast and whether it would be close to what was actually reported in 2018 or not. Your answer will be marked on the following criteria:  (i)  applying knowledge from ACCT6003 lectures and workshops, (ii) using available evidence from the analysis presented in the Excel spreadsheet, (iii) discovering relevant qualitative evidence from Woolworths and its environment that can help with prospective analysis, (iv) developing convincing arguments that justify the use of assumptions and choices when projecting ratios and developing pro- forma statements.