Introduction The purpose of this report is to undertake financial analysis of the position of the three major supermarket chains (Tesco plc, Morrison plc and Sainsbury plc) in the UK, using the financial tools such as Horizontal and Vertical Analysis and Ratio Analysis. The calculations done are considering the figures from the income statement and balance sheet of these three companies for the last 2 years (2008 & 2007). Doing these calculations is an effort to find out the current position and if any forecast on their performance. Tesco Plc *Interpreting the Horizontal and Vertical *Analysis The balance sheet’s horizontal analysis reveals the first worrying statistics about the company- the fact that stock level has increased by 25.84% in the year, even though net assets have increased by only 12.59%. The vertical analysis of the balance sheet again highlights the increase in amount of stock held by the company at the end of 2008 and increase in current assets. Interpreting the Ratio Analysis By looking at the ROCE* ratio it is clear that the business has not generated any higher return in the period 2007-2008. Though there is a marginal decrease in the returns (0.14% from 0.16%), however when compared with returns of other competitors Tesco plc has performed much better. Drop in asset utilisation ratio in the year 2008 indicates that the company did not use its assets efficiently to generate sales. As a result profit margin dropped down to 5.91% in 2008 from 6.21% in the year 2007. The Acid test ratio also doesn’t meet the ‘ideal’ ratio of 1:1. In other words Tesco had only 38p of quickly realisable assets to meet each £1 of current liabilities. Stock turn shows the effect of increased stock at the end of 2008 as it s... ... middle of paper ... ...To check how successful it has been, we calculate debtor collection period ratio. (Dyson, 2004) Fixed Asset turnover: In this ratio, we seek the amount of sales that can be generated (or the amount of fixed assets necessary to achieve a level of sales) from a given level of fixed assets. (Klein, 1998) Total asset turnover: This ratio determines that how efficiently a firm is utilizing its assets. If the asset turnover ratio is high, the firm is using its assets effectively in generating sales. If this ratio is low, the firm may not be using its assets efficiently and shall either increase sales or eliminate some of the existing assets. (Argenti, 2002) Solvency Ratio Gearing: Gearing reflects the relationship between a company’s equity capital (ordinary shares and reserves) and its other form of long-term funding (preference share, debenture, etc.) (Black, 2000)
To create a sound piece of writing it is imperative to develop skills that make the piece both enjoyable and understandable to the reader. By doing so we become academic writers who acknowledge the importance of careful and concise writing. The piece of writing that I found best exemplifies an academic piece in its use of Craft tips is “The Supermarket: Prime Real Estate”, by Nestle. I believe this because of its meta-commentary, outstanding framework while quoting, and use of transitional phrases. This particular essay pulls together ideas about a modest subject, the grocery store and its’ setup, in a way that is intriguing to the reader by the expansion of simple ideas,
Analyzing Wal-Mart's annual report provides a positive outlook on Wal-Mart's financial health. Given the specific ratios and its comparison to other companies in the same industry, Wal-Mart is leading and more than likely continue its dominance. Though Wal-Mart did not lead in all numbers, its leadership and strong presence of the market cements the ongoing success. The review of the current ratio, quick ratio, inventory turnover ratio, debt ratio, net profit margin ratio, ROI, ROE, and P/E ratio all indicate an upbeat future for the company. The current ratio, which is defined as current assets divided by current liabilities, is a measure of how much liabilities a company has compared to its assets. Wal-Mart in the year of 2007 had a current ratio of .90, and as of January 2008 it had a current ratio of .81. The quick ratio, which is defined as current assets minus inventory divided by current liabilities, is a measure of a company's ability pay short term obligations. Wal-Mart in the year of 2007 had a quick ratio of .25, and as of January 2008 it had a ratio of .21. Both the current ratio and quick ratio are a measure of liquidity. Wal-Mart is not as liquid as its competitors such as Costco or Family Dollar Stores Inc. I believe the reason why Wal-Mart is not too liquid is because they are heavily investing their profits for expansion and growth. Management claims in their financial report that holding their liquid reserves in other currencies have helped Wal-Mart hedge against inflationary pressures of the US dollar. The next ratio to look at is the inventory ratio which is defined as the cost of sales divided by average inventory. In the year of 2007, Wal-Mart’s inventory ratio was 7.68, and as of January 2008 it was 7.96. Wal-Mart has a lot of sales therefore it doesn’t have too much a problem of holding too much inventory. Its competitors have similar ratios though they don’t have as much sales as Wal-Mart. Wal-Mart’s ability to sell at lower prices for same quality, gives them the edge against its competition. As of the year 2007, Wal-Mart had a debt ratio of .58, and as of January 2008, it had a debt ratio of .59. The debt ratio is calculated by dividing the total debt by its total assets. Wal-Mart has a lot more assets than it does debt so Wal-Mart is not overleveraged.
The first method we will review is the accounting method. Through this accounting approach we will analyze specific ratios and their possible impact on the company's performance. The specific ratios we will review include the return on total assets, return on equity, gross profit margin, earnings per share, price earnings ratio, debt to assets, debt to equity, accounts receivable turnover, total asset turnover, fixed asset turnover, and average collection period. I will explain each ratio in greater detail, and why I have included it in this analysis, when I give the results of each specific ratio calculation.
Since January 31, 2004, the investment banker for Wal-Mart has been Moody's investor services. Wal-Mart plans to refinance for their long term dept with Mood's Investor Services and also a few other investment banking for other corporate purposes that are not mentioned. Wal-Mart also plans to bowwow 3.3 billion dollars and an additional 1.1 billion for commercial paper By January 31, 2004 the, Wal-Mart had already established a 5.1 billion dollar lines of credits from 77 different banking industries and investment and used up approximately 145 million in the production of commercial paper. During the same time period Wal-Mart had 6 billion dollar debt of securities under a shelf registration regulation which derived from the SEC. Wal-Mart sold 1.25 billion in notes and maturity. The notes bear an interest of 4.1.25 % and mature by February 2011. The total quantity of notes allowed to be sold to is up to 4 billion.
Ford’s impressive total asset size is $225 billion (Ford, 2015a). The fixed assets turnover ratio (FATR) illustrates the effectiveness of using fixed assets to generate sales. Ford’s average fixed asset turnover ratio for 2013-2015 is (0.33 for 2015 + 0.32 for 2014 + 0.28) / 3 = 0.31 (Ford, 2015a; Ford, 2015c). Although the number is small, one can compare Ford’s FATR with a competitor during the same period to determine which one uses their fixed assets better. GM’s average FATR for the same period was (0.28 for 2015 + 0.18 for 2014 + 0.14 for 2013) / 3 = 0.2 (GM, 2015a, GM, 2015c). Therefore, one can conclude that Ford’s usage of fixed assets was more productive than GM’s. I will give GM some credit, because of their increasing
“If you live in a free market and a free society, shouldn’t you have the right to know what you’re buying? It’s shocking that we don’t and it’s shocking how much is kept from us” (Kenner). For years, the American public has been in the dark about the conditions under which the meat on their plate was produced. The movie, Food Inc. uncovers the harsh truths about the food industry. This shows that muckraking is still an effective means of creating change as shown by Robert Kenner’s movie, Food Inc. and the reforms to the food industry that followed its release.
In analyzing the common-size balance sheet for Applebee’s, it is noted that the total current assets has jumped from 11% to 14% of the total assets. The total assets for Applebee’s has jumped 6% from 2000 to 2001 driven by increased in the total current assets of 28%. Of those 28% increase, they consisted of 88% increase in the Cash & Equivalents (increased of $10.6 millions) caused by the decreased in the Capital Stock repurchasing in 2001 by Applebee’s. The repurchase of capital stock has decreased by 31% as noted from the year-to-year percentage changes of the Statement of Cash Flow which equivalent to about $11 million dollars. The other current assets increased was from the other Current Assets category; there was an increase of 92% from 2000 to 2001. Due to the higher earnings for Applebee’s, there was an increase in income tax due. A significant component of the increase of other Current Assets was from increased in prepaid income taxes with net deferred income tax asset of $6.7 millions dollars.
In this report, we will analyze the financial performance of two companies: Kraft and General Mills. They are global consumer foods companies that develop different packaged food products. The main goals of these companies are to meet consumers’ needs and preferences while generating superior returns by delivering consistent growth in sales and earnings, coupled with an attractive dividend yield. This report shows how each company meets their goals and which one is in better standing.
Supermarket chains are one of the most complicated business's to open in the United States of America. In my town of Hillsborough, New Jersey we have 3 supermarket chains called Shop-Rite, Weis, and Super Stop & Shop. Each supermarket has their strengths and weaknesses. Shop-Rite has three large strengths: Customer Service, stock availability, and pricing. When you walk into shoprite you can tell every cashier/worker loves to be there and enjoys their job throughly and are extremly polite and helpful to their customers. Shoprite stocks up on their food/supplies they sell everyday to have maxiumum capacity so customers can find what they want when they want. Next their pricing is next to none. They offer pletnly of price reductions if you are
Tesco is one of the biggest grocery retailors in the world, it is one of the top five stores, it was founded in early nineties in UK, and now it is well known company around the global and very famous because of their successful strategies in marketing and how they manage any problem that they are facing. However, in recent day Tesco are facing some problems that may threat their career life, and make them loose their market position. This report will cover these problems, how the competitors are doing to take Tesco’s place, and what Tesco are doing to overcome these problems.
Ratio analysis are useful tools when judging the performance of a company by weighing and evaluating the operating performance (Block-Hirt). There are 13 significant ratios that can separate by four main categories, profitability, asset utilization, liquidity and debt utilization ratios. The ratio analysis covered here consists of eight various ratios with at least one from each of these main categories. These ratios were used to compare and contrast the performance of Verizon versus AT& T over the years 2005 and 2006.
To be the world's largest low cost store that carries all types of merchandise for all possible consumers.
Allen Ginsberg’s “A Supermarket in California” exhibits stark contrasts in tone. It begins downtrodden and disheartened as the speaker wanders the dark streets alone at night under the trees. The tone soon transforms, becoming more magical and whimsical as the speaker enters the “neon fruit supermarket.” By the end of the poem we experience a shift toward a more reverent tone. Ginsberg exemplifies Whitman’s influence on his own poetry, and emulates Whitman’s rambling style. (Kriszner & Mandell, 534) I intend to explore the varying tones and themes present including an adoration for Walt Whitman by the speaker and a general sense of embracing life in all its wonder in “A Supermarket in California.”
hole Foods Market monopolies green foods with minimum processing, without genetically modified foods as well as artificial coloring and preservatives. Whole Foods Market is one of the leading retailers of organic and natural foods in the world. Main appropriate type or resident group and optimal location for Whole Foods Market will be introduced based on concepts of Whole Foods Market, theories of urban business location and concrete commerce conditions of Toronto. Therefore, somewhere with a little distance from affluent downtown neighborhood such as 777 Bay Street is a best place for new Whole Foods Market in Toronto with wealthy, educated middle-class consumers as its main consumers.
Asset turnover ratio is used to calculate the efficiency to utilizing total asset for the sales. Use your assets in produce your product productivity and rise the sales to earn more profit. The asset turnover ratio of Nestle and Duty Lady Milk are similar in these 3 years. But, the two asset turnover ratio is considered as a low ratio (unproductive capacity). A low ratio means there will be less efficient of firm in total asset for employed. Nestle does not efficient in using firm’s asset to produce more