Annual Report - Financial Analysis|
Subject : Financial Analysis For Managers|
Course Leader: Prof. Richard West
Module Leader: Prof. Bijan Hesnib
Riyank Mehta - 140550891
Jay Sanghvi - 140248921
Anirudh Thakor - 140994501
Jigar Ajmera - 140249021
1. Executive Summary
This report is a summary of the comparison of ratio analysis of two companies Morrisons Plc. and Sainsbury Plc. for the accounting period 2010-2011 and 2011-2012. It focuses basically on various ratios such as Profitability Ratio, Liquidity Ratio, Gearing Ratio, Efficiency Ratio and Investors Ratio.
This ratios will give us an overview of the companys financial performance of Morrison and Sainsbury and will even help us to compare both the companys performance for 2011 and 2012. This comparision is usually made by investors to choose companies for investing by looking into its financial structure and by comparing its profit margins, sales growth, operating margin, dividend paid and many other such ratio. |
1. Executive Summary| 2|
2.1 Morrisons Plc.
2.2 Sainsbury Plc.|
3. Ratio Analysis3.1 Profitability Ratios3.2 Liquidity Ratios3.3 Efficiency Ratios3.4 Gearing Ratios3.5 Investors Ratios| 559101314| 4. Conclusion &Recommendations| 18|
5. Reference| 19|
6. Appendix| 20|
Table of Contents
2.1 Morrisons Company PLC.
Morrisons being UK’s 4th largest supermarket chain, has an annual turnover of more than £17 billion. It has more than 475 stores spread across UK. Morrisons has a 15.6% share in the UK’s grocery market and is one of Britain’s fastest growing supermarket chains. Amongst the large supermarkets, several features make Morrisons outstanding and differentiate it from competitors. Its ‘fresh approach’ and commitment to sustainability, customers become aware of the freshness of its food and its concern for the environment. (Morrison Case Study, 2009) Morrisons holds greater importance in its supply chain known as the ‘field to fork’ approach. Therefore has the power to control over the quality and freshness of its produce,this helps them to gain a competitive edge over its competitors. The company’s strategy basically revolves around satisfying its customers’ needs by being different and better than ever. Morrisons commits to provide its customers with an outstanding shopping experience and also creates a great atmosphere for people to work and is also been recognized with numerous industry awards. Nearly11 million people visit their stores every year and have about 131,000 trained employees to caterpeople’s demand. Morrisons has been awarded Employer of the Year Award at the 2011 Grocer Gold Awards. (Morrison Annual Report, 2012).
2.2 Sainsbury Company PLC.
Sainsbury is one of the Britain's longest standing food retailers that retails in both the UK and USA. It was founded in 1869 and today operates over 1,000 stores, including 440 convenience stores and employs around 150,000 colleagues (Sainsbury Supermarkets, 2009). Their strong, unique culture and values are integral to their success of becoming one of the giant supermarkets. Sainsbury’s goal is to focus on its customers by making their day easier by offering great quality and service at fair prices (Introduction to Sainsbury, 2010). It believes in quality in everything it does. They aim to deliver the best possible shopping experience by investing in their stores, colleagues and channels. They have achieved by understanding what their customers want and delivering universal appeal to help them Live Well for Less. (Sainsbury Annual Report , 2012)
3.1 Profitability Ratio
Profitability ratios is the most frequent tool used in financial analysis to determine the bottom line and its return to investors .These ratios are...