Financial Ratio Analysis of Morrison in Comparison with Tesco Essay

Words: 2119
Pages: 9
Open Document
Financial Ratio Analysis of Morrison in Comparison with Tesco

Introduction

The purpose of this report is to critically analyse the financial ratio results of Morrison 2008 and 2009 as an equity analyst and compare it with like for like by using Tesco supermarket. To achieve this report will be looked at in four main areas. Firstly, we will use financial ratios obtained from annual reports of 2008 and 2009 to analysis and appraise Morrison’s financial performance. This would be followed by a comparative analysis with Tesco, for the same period. In addition, a trend analysis will be done to show the pattern of Morrison’s financial performance over the years 2006 to 2009. Furthermore, a comparison will be made with industry average …show more content…
Although this number is insignificant, the low results for the two years are good and indicate that they have good policies in place at recovering debts even in the economic downturn when debtors may not have the finances to make disbursements There is an improvement in stock turnover by 0.04days from 2008 to 2009. Creditor days have increased from 2008 to 2009 by approximately 4 days

Tesco has gone down in stock turnover from 20 days to 19 which is an improvement.
Although Tesco had a fall in ratio as well, their ratio is not as good as Morrison’s. So based on these ratios Morrison has done better in shifting stock, however, if we look more closely it may be because Tesco sells more hardware and electrical gadgets than Morrison.

Overall the ratio is good when compared to the major players in the industry like Sainsbury and Tesco. This could mean that control over stock level is being managed better by Morrison. These ratios are a bit high for a supermarket but the fact that they also sell non-perishables and hardware should be taken into consideration.
Tesco has even better debtor days of 0. These figures have to be looked at very closely.

nclusion that the trade receivables is a smaller figure and may not be that useful as a performance indicator of Tesco/ supermarkets anyway, as credit sales are not part of their business
Show More

Related Documents: Financial Ratio Analysis of Morrison in Comparison with Tesco Essay

An Evaluation & Analysis of Tesco Plc Essay

Business and Financial Performance of Tesco Plc over three years THE BUSINESS AND FINANCIAL PERFORMANCE OF TESCO PLC OVER A THREE YEAR PERIOD Oxford Brooks University Submitted by: TAHIR GHAFOOR ACCA Registration # 1969183 Date Submitted: 21 Nov, 2011 Word count: 6495 approximately. 1|Page Business and Financial Performance of Tesco Plc over three years Table of Contents Table of Contents .................................................................................................. 2 .…

Words 7737 - Pages 31

J Sainsbury - Financial Performance of Last 5 Years Essay

1. EXECUTIVE SUMMARY J Sainsbury plc is a UK based company, into grocery, related retailing an financial services business. The study is primarily to do financial assessment of this company and its performance relative to its peers and industry. Seeing the last 5 years report, it is evident that company was in a bad share 3 years ago, and now its in the stage of recovery. Starting 2004, there has been a major change in the board, as well as management. Since then company has taken several large…

Words 2945 - Pages 12

Essay on Re: Ch. 11 Discussion

Antonio Humphrey Tesco's company analysis and e-business model essay Introduction The study conducts an audit of the internal and external environment of Tesco. Internal audit will be conducted through SWOT analysis. Analysis of the external environment will be done through PEST analysis. Once this is done, Tesco's e-business strategy will be discussed and examined in detail. Brief Company Overview Tesco is one of the biggest names in food retail across the world and is the biggest food retailer…

Words 3636 - Pages 15