Managerial Finance- Financial comparison between Morrisons and Sainsbury
Résumé de l'exposé
The ratio analysis is the way to find information about a company's financial organisation. Most of financial information are available on the website of companies. They are easily available by everyone.
Ratios are calculated in order to compare the company to an other company (same kind of company and direct competitors) and to compare these results to the previous years to see the health of it ; and they can also see in the company does better or not than before. We can also make forecasts with these ratios.
Ratios judges the company's capability to be succesful or not. Moreover, it can help investor to know to financial situation of the company to invest in. The differents ratios can predict the company's economic situation for the forthcoming years and can see if company's objectives are acomplished. We can divided the ratios analysis by 3 different steps as : the profitability analysis, the liquidity ratios analysis, and the investment ratios analysis.
I decided to compare Morrisons with its most look-a-like competitor : Sainsbury. Both of them are in UK and propose the same range of products anf have mostly similar finance.
Sommaire de l'exposé
Extraits de l'exposé
[...] Net Profit Margin = Net Profit before interest and Tax x 100 Sales Morrisons' net profit margin is in expansion since 2009. In 2009, Morrisons had a net profit margin of and in This increase means than Morrisons makes higher net profit per pound of sale. One of the reason of this growth is, their sales volume is increasing and they kept their costs as they were. For Sainsbury as well, net profit margin is increasing but less than Morrisons. [...]
[...] 10- Fuel price war Morrisons entered in a cost-cut on fuel. This result by a hard war in fuel retailing. Tesco started this war by giving vouchers to customers paying more an amount for shopping. Asda and Sainsbury followed this trend. Morrison had to do the same or something similar to follow the competion, and keep customers. Morrisons priced-cut the price of both petrol and diesel. Morrison sis the first to cut-price for diesel. There are several effects of these cut-prices for the company. [...]
[...] Critical discussion Every years, companies lunch its financial statement. It can be different relative to the company. In most of the case, the company lunch it financial statement with the company's strategic plan of the year, forecasts, assessements of the previous figures, explanations of these results. To financially analyse a company, you have to have this document. Moreover, it is easily available (on the company's website). Financial statements can not be used if the results are based on inaccurate statements. [...]
[...] A decrease in corporation tax rate In 2010, Morrisons had to pay £209m as corporation tax. In 2011, the company has to pay less : £191m. These can be explained by a change in the corporation tax rate to 27%). The company pays less tax because of UK's government cut in corporation tax. This decision was taken in order to stimulate growth (http://www.telegraph.co.uk/). This decision has for effect for Morrisons a reduce in deferred tax liabilities by m. The trend is like last year, a decrease in the corporation (for 4 years). [...]
[...] For this investment, Morrisons has to find money : Loans and investors. Online strategy Morrisons is trying to be present in all slots. Firstly, the company wants to be more integrated in south. Secondly, Morrisons wants to be in the convenience shops market by creating new kind of shoping places and buying Iceland, and then, to have an online market to follow and reach its competitors. To do that, Morrisons acquiered in 2005 the company Kiddicare for £70m. It was the first step to get in online shoping. [...]
À propos de l'auteur
Francis L.EtudiantMarchés étrangersManagerial Finance- Financial comparison between Morrisons and Sainsbury