From: Ishwaraj Singh Bhatia Reference : Ratio analysis of Sainsbury and Morrisons Date:18/03/2013 INTODUCTION The objective of financial reporting/statements is to provide information about the reporting entity’s financial performance and financial position that is useful to a wide range of users for assessing the stewardship of the entity’s management and for making economic decisions. This is a report on the operations of J. Sainsbury Plc and Morrisons and will focus on a financial analysis and comparative analysis, from which an evaluation will be drawn on to determine which of the two companies would seem to be a more viable investment to a potential investor. My report is going to focus on using ratio analysis to look at the liquidity, profitability and gearing of Sainsburys and Morrisons. Both companies work in the same industry and are competitors. I will use various ratios to analyse their company accounts and finally comment on the best performing company. SAINSBURY Sainsbury’s was founded in 1869 by John James and Mary Ann Sainsbury .It was so successful that further branches were opened in other market streets and by 1882 they produced the first Sainsbury brand product. The Sainsbury group today is one of the worlds leading retailers, playing a part in the lives of over 11 million customers a week and as at October 2003 had 512 stores throughout the UK employing over 145,000 people MORRISONS Morrisons was founded over 100 years ago, as a stall in Bradford market. It has been a family business for most of the time since. Under Sir Ken Morrisons 55-year leadership, until he retired in 2008, the company grew steadily from market stall to superstore. With over 450 stores, it is now the fourth largest food retailer i... ... middle of paper ... ...e case of Sainbury proportion of acid test ratio has increased marginally by 0.04 in the year 2011-12 to 0.35:1 as compare to 0.31:1, though there is a marginal increase but still acid test ratio of Sainbury is much below the generally accepted 1:1. . Comparatively Sainbury has higher acid test ratio than Morrisons. 7. Trade receivables days: As both the companies are in the nature of business with fast moving items trade receivables collection period of both the companies is less than a week. In case of Morrisons days of credit allowed in the year 2011-12 has increased to an average of 7 days as compare to an average 6 days in the year 2010-11 this may be required to increase sales volume. Trade receivables days of Sainbury has reduced from average 6 days in the year 2010-11 to an average of 5 days in the year 2011-12. It implies that Sainbury has better credit
This requirement makes it important to look through a majority of the return ratios, which include return on sales, return on assets, and return on equity. Additionally, investors are also interested in the ratios related to the company’s earnings, such as earnings per share (EPS) and PE ratio. Looking at return on sales, we can see that Wendy’s has a 7.27% return on sales and Bob Evans has a 1.23%, which demonstrates Wendy’s has a higher profit margin. Moreover, Wendys’ return on assets is 2.85% and Bob Evans is 1.58%. Also, Wendy’s and Bob Evan 's have return on equity ratios of 6.66% and 4.30%, respectively. All of these return ratios show that Wendy’s has a better handle on turning working capital into revenue. On the other hand, although Wendy’s return ratios are higher than Bob Evans, Bob Evans has a better performance on earnings per share and PE ratio. This is due to Bob Evans having less common stock share outstanding, which makes their earnings per share and PE ratio higher than Wendy’s. Due to the EPS being higher for Bob Evans, we would recommend that investors look towards Bob
M&S are one of the UK's leading retailers of clothes, food, home products and financial services. Some 10 million people shop with us each week in over 375 stores. In addition M&S have 155 stores managed under franchise in 28 territories mostly in Europe, the Middle East, Asia and the Far East, stores in the Republic of Ireland, nine wholly owned stores in Hong Kong and M&S own the US supermarket group, Kings Super Markets. The main objectives of marks and Spencer's are as follows:
This report includes financial analysis of retail company ‘’Sainsbury’s’’, one of the biggest retail companies in the United Kingdom .The report examines the financial health of the business and evaluates the business performance by summarising the financial performance and applying financial ratios to further analyse the business’ financial . The financial analysis is displayed by analysing the information gathered from website ‘‘companies’ house’’. All the taken information contains income statements, cash flow statements and balance sheets. By the end of this report, a clear understanding of ‘Sainsbury’s’ financial analysis will be made, so that viable investment decision could be made accurately.
They're very important to Cadburys because they affect the way you think about Cadbury and their products. Cadburys look at information that has already been collected and recorded. This is known as secondary data. Cadbury also have a big website pictured below in which people can be informed of the business. Sainsbury's Marketing includes their online shopping website above and posters around the shopping malls, Sainsbury's also have a television contract with Jamie Oliver with the slogan ‘Making life taste better’.
Sainsbury’s entered a joint venture with British Home Stores in 1971 to create hypermarket style stores under the brand SavaCentre. These stores reverted to the standard Sainsbury’s brand and superstore format in 1999.
The objective of this report is to give an overall view on research and analysis to regards of two companies, Wm Morrison Supermarkets Plc and Tesco Plc that I have chosen for. In this report, I will be comparing two companies’ financial analysis based on their comprehensive income and balance sheet for one year; and also will be comparing their generating cash ability, cash management and financial adaptability based on statement of cash flows for the past two year and also determine whether the two companies have the ability to repay their debts to their creditors, generating into cash and going concern which related to finance.
British retailer Marks and Spencer (M&S) is a private limited company, their main aim is of a commercial nature. It is one of the most iconic and widely recognised chain stores in the UK. They have 520 stores located throughout the UK and 240 stores worldwide. It is the largest clothing retailer in the country. (Source: M&S website)
Introduction The purpose of this report is to undertake financial analysis of the position of the three major supermarket chains (Tesco plc, Morrison plc and Sainsbury plc) in the UK, using the financial tools such as Horizontal and Vertical Analysis and Ratio Analysis. The calculations done are considering the figures from the income statement and balance sheet of these three companies for the last 2 years (2008 & 2007). Doing these calculations is an effort to find out the current position and if any forecast on their performance. Tesco Plc *Interpreting the Horizontal and Vertical *Analysis The balance sheet’s horizontal analysis reveals the first worrying statistics about the company- the fact that stock level has increased by 25.84% in the year, even though net assets have increased by only 12.59%. The vertical analysis of the balance sheet again highlights the increase in amount of stock held by the company at the end of 2008 and increase in current assets. Interpreting the Ratio Analysis By looking at the ROCE* ratio it is clear that the business has not generated any higher return in the period 2007-2008. Though there is a marginal decrease in the returns (0.14% from 0.16%), however when compared with returns of other competitors Tesco plc has performed much better. Drop in asset utilisation ratio in the year 2008 indicates that the company did not use its assets efficiently to generate sales. As a result profit margin dropped down to 5.91% in 2008 from 6.21% in the year 2007. The Acid test ratio also doesn’t meet the ‘ideal’ ratio of 1:1. In other words Tesco had only 38p of quickly realisable assets to meet each £1 of current liabilities. Stock turn shows the effect of increased stock at the end of 2008 as it s...
This assignment will attempt to determine why Marks & Spencer nearly collapsed and what they have achieved in terms of success and failure as part of their recovery programme.
John Cadbury when in Birmingham opened a small shop where he sold coffee, tea and drinking chocolate and lay down the ground, which upon Cadbury was established in 1824.
At present Woolworths is Australia’s one of the largest supermarket chain which operates around 872 stores across Australia and employs around 111,000 staffs in its various stores, distribution centers and support offices to provide its customers with a qualitative service, superior range, value along with ease and convenience in shopping.
The food and staples retailing is an increasingly competitive industry. The market giants (competitors) are Coles (owned by Wesfarmers) which has 741 stores across Australia and plans to add 70 m...
Before beginning an analysis of a company it is necessary to have a complete set of financial statements, preferably for the pas few years so that historical trends can be obtained. Ratios are a way for anyone to get an idea of the financial performance of a company by using the information contained in the financial statements. Ratios are grouped into four basic categories, liquidity, activity, profitability, and financial leverage. This document will use a variety of these ratios to analyze the firm, Sample Company, as of December 31,2000.
This shows the total balance of credits and debits are equality after the temporary accounts had being zero and didn’t list on the post-closing trial balance. This is the end of accounting cycle and it will start again with the first step in the next accounting
The advancements in the technological world have allowed supermarket chains and other national stores to quickly dominate the market and are driving out the concept of the ‘local stores’. This surge in the market has seen shares rise and profits bulge with the three main contenders in mind being Sainsburys, Safeways and Tescos who now serve the whole of the UK between them and are the household names of the shopping world. The ICT input to these businesses is vital in that it provides speedy service; controls stock levels and will even allow bank balance transfers to be carried out with minimal difficulty or technical experience.