Wesfarmers

1. Review the Income Statement: The Income Statement, also known as the Profit and Loss (P&L) statement, is a financial statement that shows a company's revenues, expenses, and net profit or loss over a specific period of time. This statement will provide insights into the company's sales, costs, and profitability.
2. Analyze Gross Profit Margin: The gross profit margin is the percentage of sales that remains after subtracting the cost of goods sold. This metric reflects the company's ability to control production costs and manage inventory efficiently. A higher gross profit margin is generally considered positive, as it means the company is generating more profit from its sales.
3. Examine Operating Expenses: Operating expenses include all the expenses incurred by a company in its day-to-day operations, such as marketing, salaries, and administrative costs. It is essential to assess whether these expenses are increasing at a rate faster than the company's revenue growth.
4. Check Earnings and Earnings Per Share (EPS): A company's earnings refer to its net income, which is calculated by deducting all expenses from its revenues. A company with positive earnings is considered financially stable. In addition, it is important to assess the EPS, which is calculated by dividing the company's net income by the total number of outstanding shares. A consistent increase in EPS indicates a positive outlook for the company.
5. Examine the Balance Sheet: The Balance Sheet provides a snapshot of the company's assets, liabilities, and equity at a specific point in time. It is important to assess the company's liquidity, debt level, and financial health through this statement. A solid balance sheet with minimal debt and healthy cash reserves is considered favorable.
6. Evaluate Cash Flow: Cash flow refers to the cash inflows and outflows of a company. Positive cash flow indicates that the company is generating enough cash to cover its operating and investing activities. In contrast, a negative cash flow may be a sign of financial instability.
7. Analyze Return on Equity (ROE): Return on Equity is a key performance metric that measures the profitability of a company by comparing its net income to the shareholders' equity. A higher ROE signifies that the company is generating better returns for its shareholders.
8. Compare Financial Ratios: Financial ratios provide a quick way to compare a company's financials with its industry peers. Some of the key ratios to compare include price-to-earnings (P/E) ratio, price-to-sales (P/S) ratio, and debt-to-equity (D/E) ratio.
9. Look at Growth Prospects: Lastly, evaluate the company's growth prospects, including new product offerings, expansion plans, and potential mergers or acquisitions. These factors can have a significant impact on the company's future financial performance.

The cost structures and profit margins in the Retail, chemical, fertiliser, industrial and safety products industry can vary depending on various factors such as market demand, competition, supply chain efficiency, and government regulations. However, some general patterns can be observed.
1. Retail Industry
The retail industry has a relatively high cost structure due to operational expenses such as rent, salaries, inventory, and marketing. The profit margins in this industry can be thin, ranging from 1-4%. This is because retail companies typically operate on high volume and low margins. However, certain factors such as brand recognition, location, and effective marketing strategies can contribute to higher profits.
2. Chemical Industry
The chemical industry has a complex cost structure, with the production and transportation costs of raw materials being significant factors. Other costs include research and development, regulatory compliance, and marketing. Profit margins in this industry can range from 5-10%, depending on the specific chemicals produced and the market demand for them.
3. Fertiliser Industry
The cost structure in the fertiliser industry is dominated by raw material costs, especially natural gas and phosphates. Other factors that impact costs include energy, labor, and transportation. The profit margins in this industry can range from 10-20%, with varying margins for different types of fertilisers.
4. Industrial Products Industry
The cost structure in the industrial products industry can vary significantly depending on the products being manufactured. However, common costs include raw materials, labor, machinery, and transportation. Profit margins in this industry can range from 5-15%, with some products having higher margins than others.
5. Safety Products Industry
The cost structure in the safety products industry is primarily driven by manufacturing and production costs, which include raw materials, labor, and compliance with safety regulations. Profit margins in this industry can range from 10-20%, with higher margins for specialized safety products.
Overall, the profitability in these industries can be affected by numerous factors such as global economic conditions, supply and demand, competition, and technological advancements. Companies that can effectively manage their costs and innovate to meet changing market needs can maintain higher profit margins.