Morrison's Performance Analysis Report

Topics: Financial ratios, Profit margin, Financial ratio Pages: 19 (6333 words) Published: December 13, 2012
Table of Contents

Project Objectives and Overall Research Approach2
1.1Reason for Choosing the Topic2
1.2Choice of Company and History2
1.3Aims and Objectives2
1.4Research Questions3
1.5Research Approach3
2 Information Gathering and Accounting/Business Technique Used4
2.1Sources of Information4
2.2Description of Method Used to Gather Information4
2.3Limitation of Information from Different Sources5
2.4 Tools and Techniques used for Business/Financial Analysis5 3Business Analysis7
3.1 Porter Five Forces Analysis7
3.2SWOT Analysis8
4Financial Analysis10
Ratio Analysis10
4.1Turnover Growth10
4.2Profitability Ratio11
4.3Working Capital Ratios13
3.4Efficiency Ratios14
3.5 Gearing and Long Term Stability15
3.6Investor Ratio17
5 Conclusions19
5.1Business Performance19
5.2Financial Performance20

Project Objectives and Overall Research Approach

1.1 Reason for Choosing the Topic
Among many choices of topics I choose the above topic due to numbers of reasons. Firstly, it is easy to understand the topic and requirements that are expected. Secondly, I personally have a keen interest in conducting financial analysis of companies. Thirdly, In course of my studies towards ACCA I have learnt lot of tools to perform financial analysis of a company. These tools are covered in F7 (Financial Reporting), P2 (Corporative Reporting) and in P3 (Business Analysis). I have studied relevant subjects and this research will help me to apply my academic knowledge to practical use. 1.2 Choice of Company and History

I have chosen Morrisons Plc for my Research and Analysis Project because it is one of the biggest grocery retailers in the UK. I also have worked for Morrisons plc on a part time basis. I have knowledge about its competitors and company structure as well. Morrisons deals in food, grocery and other non food items. It was established in 1899 by William Morrisons by setting up a stall in Bradford market. Now Morrisons plc is fourth biggest food retailer in UK. Morrisons plc have over 400 stores all across UK employing over 132,000 people serving 9 million people every week. Morrisons plc holds 12.3% of the market share of UK grocery market (Kantar Worldpanel 12 week to 22 January 2012). Sales revenue for year ended 30 January 2011 was over 16 millions. I am using Sainsbury plc as competitor of Morrisons plc. I chose Sainsbury plc because it is third biggest supermarket in the UK while Morrisons plc is forth. Sainsbury market share of grocery industry for 2012 is 16.7 %(Kantar Worldpanel 12 week to 22 January 2012) while Morrisons is indicated above. So I think it would be much more realistic to compare Morrisons plc with its next close competitor rather than with big companies (Tesco plc) which have revenue figure in billions and also have international presence.

1.3 Aims and Objectives

In this research I will analyse the performance of Morrisons plc over three years from FY2009 to FY2011

* By looking at industry trends over the period and its impact on performance of Morrisons * Analyse the Morrisons plc performance by looking at its profitability by using profitability ratios. * Judging company liquidity to assess its ability to pay all its debts and remain solvent. * Looking cash position of Morrisons plc by analysing cash flow, Company ability to generate cash and ratio between cash and profitability. * Financing structure of Morrisons plc by looking at equity and debt structure of company using ratios such as debt equity ratio. * Carrying out investor analysis using dividend cover ratio, market value of share, and dividend per share. * Carrying out SWOT analysis. Corporate appraisal is a critical assessment of the strengths and weaknesses, opportunities and threats in relation to the internal and environmental factors affecting the entity in order to establish its...
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