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Sainsbury's Financial Ratios

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Sainsbury's Financial Ratios
The aim of this report is to analysis the financial performance of J Sainsbury plc by compare several ratios, in the view of an investor who seeking long term investment. Four sections will be illustrated, the background of Sainsbury, 10 ratio analysis, a suggestion of whether the company is worth to invest and a limitation of current financial statements and ratio analysis.
J Sainsbury plc is the third largest chain company of supermarkets in the UK, which is generally known as Sainsbury’s. It takes over around 16.5% in the UK supermarket sector and also has interests in property and banking (Bloomberg, 2011). Sainsbury’s was established by John James Sainsbury and his wife in London in 1869, and got a fast development during the Victorian era.

SWOT analysis
As one of the leading retailers in the UK, Sainsbury’s has a market share of around 16.1% and serves over 19 million customers per week (J Sainsbury plc annual report, 2011). It has strengths in offering various …show more content…
In the financial results of Sainsbury’s, it has a slight increase from 184% in 2010 to 185% in 2011. It means that the operating efficiency of total assets and marketing capacity in Sainsbury’s has become better, and then the company generated more profits. For example, Sainsbury's plans to open Whitchurch store and not only offer more jobs, but also get more profits (BBC, 2010).

Conclusion
In conclusion, J Sainsbury plc gets a great development in industries of supermarkets in UK, and it has an increase in its sales and higher profits. On the other hand, Sainsbury’s has utilized assets effectively and efficiently and had a strong management. However, compared to other competitors such as Tesco and Asda, it is lack of enough evident advantages such as profits of fast growth and strong capital turnover. The stable profit and lower risks can be provided if there are not better options.
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