Own Determination from the data given Quick Ratio Similar to the Current ratio, the quick ratio, which shows the ability of the firm to meet its short-term debts by use of liquid cash without cash, the results from the calculations, does not show much to be desired from the two large scale supermarkets.
Better returns can be achieved when the company follows the criterions. In comparison to Sainsbury, receivable turnover ratio for Tesco is much better as it is able to collect cash from its debtors in much less time Zelman, McCue and Glick, Eventually the customers might lose trust in the supermarkets if products cannot be supplied in time.
The board of managers are responsible in control of the operations which includes hazard direction. Even though none of the two companies was able to achieve a current ratio of one in the food retail industry, Tesco showed a greater prowess in its results by having slightly better current ratio compared to Sainsbury.
From the diagram above it is evident that none of the companies was able to achieve a current ratio of 1 for the last three years. This is not an example of the work written by our professional essay writers. Cash flow statement includes information from the net income and loss Financial analysis of sainsbury plc essay and balance sheet both and all together it measures the flow of the money which is traveling out and coming in.
This ratio shows that the company has most favourable measure of its stock list which are truly fast moving. Balance sheet is a 2nd signifier of fiscal statement which gives item of assets, liabilities and the capital of the company: On this basis, it can be said that Tesco is expected to generate higher earnings.
This is an indication that the liquid cash at the disposal for the company is limited which might be attributed to the low level of collection of receivables. Hence increasing the level or quantity of profits is an indication of increased efficiency for the capital employed.
The Board of managers elect the members of the audit commission Braiotta, Help the board in monitoring The fiscal coverage procedure, internal controls and fiscal statements and studies of Company are covered by the commission.
Sainsbury has been recording low volumes of sales revenue compared to Tesco with numerous retail outlets in the United Kingdom to boost the sales revenue. This shows credit management of Tesco is better than Sainsbury.
Become a Freelance Writers Place an Order From the above diagram, it is evident that both companies have low level of leverage hence they are financed through equity finance.
In addition, Sainsbury low sales revenue can be linked to poor methods of products promotion, which lead to minimal sales revenues. Notably this increase in the profit margin is attributed to the efficient management of expenses and good strategies of marketing of its products to maximise on the sales.
Comparing the two businesses, the shares of the two companies have a fair value with a good and strong yield. This is because the firm can barely manage to cover or meet the costs on interest rates, which might easily lead into bankruptcy of the company.
Liquidity Ratios Liquidity ratios demonstrate the ability of the company to meet its short-term obligations with the available short-term assets.
Besides, it is an indication that its earnings or revenues are at risk given that it can be used to repay the full loan in case of default Ulwick, Market portion in the industry Social policy Ecological issues Fiscal accounting can be segregated in two different parts fiscal minutess with the elaborate analysis of fiscal statements, and direction accounting is concerned with the type of bing information and coverage direction.
Besides, it is also possible that the low current ratio is owed to increase in payables for the company which increases the amount of current liabilities to be payable. The chief ground for fixing these fiscal statements is to inform the company about the company state of affairs and its growing, mensurate the public presentation and make full the spreads if there are any, accumulate and optimal use of finance for the hereafter concern, finish the official issues and believe about liability for revenue enhancement.
Recommendation According to the observation, it is apparent that Sainsbury currently trades on Debt to asset ratio This is a metric used to determine the financial risk of a company by calculation the quantity of the assets by the company that has been utilised to finance debt Beyer, Gross saless of the company COGS Cost of goods sold in the concern It besides includes the operating expenses of the concern The equation of Net income And Loss Account is really easy it includes gross and disbursals.
For Tesco, this figure is coming out to be almost same for the last three year, whereas, Sainsbury has significantly improved in generation of sales. InPE ratio for Tesco was The equation of Balance Sheet is really simple which includes assets, liabilities and capital: Tesco on its hand, even though it has a better edge over Sainsbury, it has much to act on in connection to the management of its liquid assets.
Fiscal Statements are of four types: But these are worsening which is non good for the company. In other words the net incomes which company has received in a peculiar period of clip and the payments which are made. The companies can safely carry out their normal operations without concerns over the creditors.
Tesco is well diversified with strong financial records as well as management insight as noted from the results of the ratio analysis. This is not the same for Sainsbury as its shares has been shown to show a slight improvement.
This is determined by adding a long term and short-term debt and finally dividing the results by the total assets of the company.For Sainsbury, this figure was 11% in the financial year of and % in the year of (Sainsbury, Annual Report section).
Such a minor change doesn’t manifest a huge degree of progress. Analysis of Travis Perkins plc Essay. Analysis of Travis Perkins plc Executive summary This report intends to analysis the macro and internal environments and financial position of the Travis Perkins plc by conducting the PESTLE and SWOT analysis.
In the beginning of this report, it introduces the mission of Travis Perkins plc. This essay, Evaluate Sainsbury plc's Financial Strategy, stresses that the financial statements of Sainsbury Plc persuade the loan companies to eagerly approve the Sainsbury Plc loan requests.
The same financial statements easily encourage the current and future stock investors to put more funds into the Sainsbury Plc coffers. Financial Analysis Task 1 Matt Studebaker Western Governors University 1A: Evaluate the company’s operational strengths and weaknesses based on the following: 1A-a: Horizontal analysis results Horizontal analysis is the study of percentage changes using comparative statements from year to year.
This is done by taking the current year and. 3. Historic Performance Analysis. Sainsbury’s ratio analysis: Peter et al. () claims that “financial ratios provide a quick and relatively simple means of assessing the financial health of a business.” Hence, several profitability ratios, liquidity ratios and efficiently ratios will be used in the report.
In other words it is a comprehensive financial analysis for both companies Sainsbury and Tesco of both the years, and they are analyzed by investor, profitability, liquidity and working capital and gearing ratios.Download