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From the above analysis, combined with the company's financial statements, it is clear that the company's 2019 performance is better than 2020. This can be supported by profitability analysis ratios, which are higher in 2019 than in 2020. However, there are a number of reasons for the decline in the company's performance, the most important of which is the impact of the new coronal pneumonia outbreak, which has led to higher borrowing and costs

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From the above computations, the company was more profitable in 2019 than in 2020.

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Net profit margin = (Net profit/revenue)*100

2020 = ($1,697/$30,846)*100 = 5.50%

2019 = ($5510/$27,920)*100 = 19.73%

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The company was more profitable in 2019 than in 2020 due to lower costs in 2019.

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Gross profit margin = (Gross profit/revenue)*100

2020 = ($1,870/$30,846)*100 = 6.06%

2019 = ($2506/$27920)*100 = 8.98%

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Trade and other payables:
In 2020, the value increased to $4,008 million from $3,620 million in 2019, showing an increase in short term debts.

Interest-bearing loans and borrowings:
It was $2.153 billion in the 2020 financial year.

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Investment in joint ventures and associates, property, plant and equipment, which are the fixed items used in the running of the business.

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During the 2019 financial year, the financial position was $9,971 million, while during the 2020 financial period, this amount declined to $9,344 million.

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Difference in the last annual report to the previous year’s report on the balance sheet of the organisation

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Difference in the last annual report to the previous year’s report on the balance sheet of the organisation

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It is clear that the company did not perform well in 2020 due to the effects of covid-19 on the company’s operations. From the consolidated income statement, there is a decrease in profit after tax. In 2019, the company reported a profit of $5,510 million, while in 2020, the profits reduced to $1,697 million, a decline of about 69.2%.

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From the 2020 annual report, the total operating expenses increased in 2020 to an amount of $28,976 million from $25,414 million incurred in 2019. This represents an increase of about 14.02%. This increase in operating expenses means that the overall profits for the company declined.

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During the financial year 2019, the Wesfarmers company realized a revenue value of 27,920. The revenue grew to 30,846 in 2020. The increase in revenue is attributable to the increase in sales in the year 2020 compared to 2019. Kmart revenue increased from $8,598 million in 2019 to $9,217 million in 2020, an increase of about 7.2%. This is as a result of an increase in sales by 5.4% in 2020.

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After that, in addition to inventory, more prepaid expenses will also drag the company's financial status. It because a decrease in prepaid expenses results in an increase in cash flow. Policymakers can try to communicate with suppliers to reduce a part of prepaid expenses as possible from now, and the reason is that the pandemic leads to loss of sales and large inventory pressure.
Through these two methods, it will not only make the company "weight loss success" and maintain health, it will also improve the company's liquidity a lot.
In conclusion, although Kmart’s financial performance in 2019 is better, but the company's financial objectives are not as expected due to the cause of pandemic. However, decision makers can through stop investing in an entity economy (set up new stores), reducing stocks and prepaid expenses to keep the company's financial healthy.
Finally, when the pandemic end, Kmart will have available funds to invest in the entity economy again.

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Then, although the manager of Kmart is very difficult to solve the loss of sales as the result of pandemic in a short time, but they can try other methods through the results of financial analysis.
For instance，decrease stock. As we see, from the current ratio we learned that Kmart's liquidity is worse than last year. But when we compare the quick ratio, we will find that Kmart's financial performance is better than 2019. This partly demonstrates a large amount of inventory backlog dragged the overall financial situation of Kmart.
Therefore, this requires decision makers need to sell more inventory products as much as possible and reduce purchase to make the risk of liquidity to be lower.

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 Difference in performance of the profit and loss statement between the current years report and the previous years.

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 Difference in performance of the profit and loss statement between the current years report and the previous years.

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It’s clear that the current ratio of Kmart increased from 0.4 in 2019 to 0.58 in 2020.
This means that Kmart's financial health without current assets is better and easy to pay for repayment（Scott Beaver，2021).
And shows that Kmart's inventory backlog has an partly effect on liquidity .

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It’s clear that the current ratio of Kmart decreased from 1.22 in 2019 to 1.11 in 2020.
This shows that Kmart has a degree of retrogression in liquidity and may not be financially stable (Gocardless，2021).
It because a current ratio between 1.5 ~ 3 is considered acceptable mostly.
However, the current ratio of Kmart is close to 1. And this may be caused by the pandemic.

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Then，the quick ratio is another important measure for liquidity risk.
Because it eliminates current assets.
For instance, the prepaid expenses and inventory.

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In financial analysis，the current ratio is an important index for assessing the liquidity risk of a company（Bankrate, 2021）.

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Quick ratio = current assets-inventory/ current liabilities

2020 = ($8,064-$3,844)/$7,270 = 0.58

2019 = $6350-$4246/$5216 = 0.40

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Current ratio = Current assets/current liabilities

2020 = $8,064/$7,270 = 1.11

2019 = $6350/$5216 = 1.22

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CEO of Wesfarmers and future of Kmart group

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CEO of Wesfarmers and future of Kmart group

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- Ian Bailey is the CEO of Wesfarmers and managing director of Kmart.

- Bailey has some prospects for Kmart in the future. He wants to develop technology capabilities and re-platform the website, successfully conversion Target’s stores and creat a new small format K Hub.

- Target will have a restructuring in next year, it is to focus on improving the commercial viability of the smaller and more simplified business.

- Kmart group is expect to convert up to 40 Target stores to Kmart stores and another 50 Target Country stores to K Hub stores.

- “Upon successful conversion, the much larger network will unlock an additional scale efficiencies to underpin Kmart’s future growth” said Bailey, CEO of Wesfarmers and managing director of Kmart.

- Catch is currently focusing on growing gross transaction value by accelerating the expansion and improvement of its customer value proposition.

- “Catch will continue to broaden the range of categories and brands available in both its in-stock and marketplace offerings, and leverage assets across the Wesfarmers Group” said Bailey, CEO of Wesfarmers and managing director of Kmart.

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Kmart, Target and Catch together form as Kmart group. Kmart group’s target is to provide their customers a satisfying shopping experience either in stores or online. It has been a challenging year for K-Mart group and the world because of COVID-19, but Kmart group remained focused on serving customers in this difficult situation. Kmart group keeps their employees and customers’ health and safe, they are also putting their business in a strong position for the future.

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- Catch is an e-commerce marketplace which commenced operations in 2006 and was acquired by Wesfarmers in August 19.

- Catch brings a highly complementary skills in digital retail and fulfillment to both Wesfarmers and the Kmart group.

- Catch operates as an online business model offering branded products on first party basis I and a third party online marketplace.

- Catch operates in the online retail market in Australia and New Zealand, Catch focuses on deliver great value to customers as the online retail sector is a highly competitive business.

- Catch’s team of buyers and marketplace sellers search the world for the products from the biggest brands to bring its customers anything they want and need.

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- Target began as a drapery store in 1926 in Geelong, Victoria.

- Target become a national apparel and general merchandise retailer with stores all across Australia.

- Target’s objective is to provide quality and style at affordable prices.

- Target has more than 13,000 employees all across its stores, support offices and direct sourcing operations.

- Target participates in the Australia clothing, homewares and general merchandise retail sector.

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- Kmart was founded in 1969, its first store was in Burwood, Victoria.

- Kmart has over 239 stores all across Australia and New Zealand, and has more than 31,000 employees.

- Kmart sells a wide range of everyday low-priced products in categories such as apparel and general merchandise.

- Kmart operates in the clothing, homewares and general merchandise retail sector.

- Kmart got their supply from both local and international from country such as Hong Kong, China, Bangladesh, India and Indonesia.