Analysis of Sainsbury's Business Resources and Finance

The assignment provides a comprehensive analysis of Sainsbury's business resources and finance. It includes documentation required for recruitment and selection, internal and external sources of finance, and the importance of budgeting. The report also creates a financial statement for Sainsbury. The references section provides a list of books, journals, and online sources used in the research.

BUSINESS
RESOURCES

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
P1 Documents used in selection and recruitment activities........................................................1
P2 Employability, personal and communication skills..............................................................3
TASK 2 ...........................................................................................................................................3
P3 Physical and technological resources.....................................................................................3
TASK 3 ...........................................................................................................................................4
P4 Sources of internal and external finance ...............................................................................4
P5 Contents of a trading, profit & loss account and balance sheet ............................................5
P6 Significance of budget in financial control ...........................................................................6
P7 Financial state of the company ............................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business resources are anything and everything that helps a company operate and do
business. This can include the use of human capital, natural resources, tangible resources such as
property or production machinery, intangible resources such as brand image and knowledge,
financial resources and anything else a particular business may use to make a profit
(Montgomery, 2011). Sainsbury is one of the largest retailer of grocery products and services in
UK. The effective management and use of business resources is a strong indicator of the
financial success of a company. A company that efficiently uses all of its different business
resources will perform at a higher level and make more money than companies who do not.
TASK 1
P1 Documents used in selection and recruitment activities
Many documents are used in recruitment and selection process. These documents and
papers are required to form effectively because it provides complete information regarding the
vacancy to the candidate. It is required to provides correct information in it so that correct
candidate can apply for the job. In Sainsbury, there is vacancy of sales assistants. It is required
for company to form effective job advertisement so that best candidate can apply for this job.
Following are the documents that are required cited position as:-.
Job Advertisement:
SALES ASSISTANT
A well established retail organisation in grocery having opening for sales assistant. The
candidate must be holder of bachelor degree or any diploma in sales with minimum experience
of 5 years in this field with large organisation. Age limit 38 Years.
Apply with CV and recent photograph by 17th July 2017
Drop Your CV In
Sales manager
Sainsbury Private Limited.
Wash Barn, UK
Ph. 9876543210, 0141-987654
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Job Description:
Job Title: Sales Assistant
Working Hours: 35 hours per week. You will need to be very flexible, prepared to work on
weekends
Benefits: 31 days holiday pro rata (including bank holidays), profit share scheme after 12
months service and pension scheme after 6 months service.
Salary: £20,000 plus performance-related bonus
Contract: 1 year contract
Based at: Wash Barn, UK.
Reporting to: Sales Manager
Person Specification:
Key Competencies Essential
Experience Previous experience in a sales or events role.
Skills and Ability  Clear written and verbal communication skills, on paper, on
the telephone and face to face
 Excellent
 project planning and organisational skills
 Able to cope with the physical demands of moving and
setting up stands and show equipment
 Excellent sales skills
 Comfortable working on own initiative and independently.
 Analytical
Attitude  Willing and flexible on working hours as there will be
evening and weekend work involved.
 Enthusiastic,energetic, creative and motivating.
 Motivated by sales
Qualifications and Good competency – able to use database, spreadsheet and
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Training
word processing packages.
Personal Qualities  Enthusiastic and outgoing; able to enthuse, support, give
confidence.
 Comfortable with a wide range of audiences
P2 Employability, personal and communication skills
Employability skills:
It can be defined as a skills that a person need to have to get a job and/or be effective in
the job role he or she has. Such skills allow the employee or person to have a mutual and friendly
relationship with colleagues or the manager thus if there are any problems that arise they will be
resolved efficiently. There are many examples of employability skills that employees or people
applying for jobs should possess which include; qualification, product knowledge, effectiveness
in meeting targets, ability to raise standards and experience that are directly linked to the job that
is being applied for (Wahl and Prause, 2013).
Personal skills
It can be defined as a skills that a person may possess but doesn’t necessarily need when
applying for a specific job role. There are many examples of such skills which would benefit the
business including; speaking different languages, trustworthy, Time management, organisational
skills and having a sense a humour (Baxter, 2012). It is good if employees or applicants possess
such sills when applying for a job as it will make them more likely to get the job as it shows the
employer other skills that the employee/applicant have that can help the business; these skills are
useful for a lot of different jobs.
Communication skills
It can be defined as a skills that help a person convey information to another person
efficiently and with ease. Managers or employees with good written or verbal communication
skills will benefit the business; this is because they will be able to talk and understand each other
properly.
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TASK 2
P3 Physical and technological resources
Physical resources
Some of the main physical resources for Sainsbury are; their premises, machinery, equipment,
materials and their stock. These are the main resources required as they are huge factoring
reasons as to why and how Sainsbury makes such huge amounts of profit. Physical resources can
include; buildings and premises, machinery, materials (even waste) and equipment. Businesses
should manage its premises according to size, the environment and location of the organisation
and even according to its customer needs, wants and requirements as it needs premises to
operate. The management of the businesses machinery greatly helps increase performance of
Sainsbury. Equipment could be IT hardware and software that must both be managed extremely
carefully.
Technological resources
Sainsbury’s main technological resources include their intellectual property, their
copyrights/patents, and their experience and skill. Their intellectual property is, put simply, their
ideas; things that make them unique. This would include things such as their logo, their ‘
Sainsbury value’ range, and schemes such as the club card and the point reward scheme. The
management of these resources can greatly improve its performance (Ciabuschi, Perna and
Snehota, 2012). If the IP is kept up to date and fully modernised this will give them a
competitive advantage, as long as the ideas are original and not different versions of competitor’s
ideas. The IP of Sainsbury is what makes them Sainsbury, and will be how consumers recognise
the brand.
TASK 3
P4 Sources of internal and external finance
Internal Sources
 Retained Profit - It can be defined as the amount of money that is left over when the all
the overhead and costs of business have been deducted. Retained profit could be used by
a business to pay shareholders as a dividend or to invest in new equipment such as a new
state of the art tandoori oven to make the business more efficient (Zott, Amit and Massa,
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2011). This is a good source of finance for Sainsbury to use as it is there for them to use
and they don’t need to go to the bank or any other organisation to borrow money /loan.
 Sales of Assets can be defined as the amount of money that come from the sale of stock
or assets that belong to the business. This is a good source of finance for Sainsbury to use
as it will make space available within his restaurant that he can use for other purposes
such as storing stock or produce. Also, he will be paid for the sale of his assets so he will
be getting quick money that he can use on the running of his business or invest in a new
piece of kitchen equipment.
External Sources
 Debentures
Debentures are another common means of finance used by companies who prefer debt over the
equity. Debt is considered to be the cheaper mode of finance compared to equity. It does not
share control with investors. It is because the interest paid to debenture holders is tax deductible.
Rest of process of debentures issue is similar to equity issue. It is offered to the common public
and therefore necessary legislations need to be complied with. Debentures also involve some cost
of issuing and they are collateral by some assets of the company.
 Term Loan
The characteristics of a term loan is very similar to debentures except that it does not include too
much cost of issuing because it is given by some bank or financial institutions. The common
public is not involved in it. A rigorous analysis of company’s financials and future plans is done
by the bank to judge the debt servicing capacity of the company (Morgan, 2012). These loans are
also secured by some assets.
P5 Contents of a trading, profit & loss account and balance sheet
Such contents are as follow: - Opening Stock – It refers to the closing stock of the previous year, which has been
entered in the opening stock account through an opening entry. Therefore, it will be
found in the Trial Balance. This item is usually put as the first item on the debit side of
the Trading Account. Of course, in the first year of a business there will be no opening
stock. In case of a trader, the opening stock consists of different types of finished goods
(Ward, 2016). For the manufacturing concern, the opening stock consists of raw
materials; work - in - process and finished goods.
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 Purchases and Purchases returns - The purchases account will show a debit balance,
showing the gross amount of purchases made of the materials. This refers to the goods
purchased, both cash and credit purchases, for resale. Remember, the purchases of assets
which are meant for permanent use in business such as machinery, furniture etc., are not
included in the purchases. The purchases returns account will show a credit balance
showing the returns of materials to the suppliers. Financial Expenses - These are those expenses which are incurred in respect of
arranging Finance for business. Financial expenses include the following expenses,
interest on Loan, interest on Capital and discount allowed (Grönroos, 2011).
 Abnormal Losses - Abnormal loss such as stock loss by fire not covered by insurance,
loss on sale of fixed assets, loss by theft, cash defalcation, etc., may occur during the
accounting period. Abnormal losses are treated as extraordinary expenses and debited and
shown separately in the Profit and Loss Account.
P6 Significance of budget in financial control
The budgeting processes can be done through a top down or bottom up approach. It is
important that the CFO plays a role of capital efficiency builder in the budgeting exercise. While
budget is an annual exercise, it should have following features to act as a robust guide to control
financial tools for the period. Budget should be able to quantify business opportunities,
challenges and provide an effective map for navigating those challenges and converting them
into financial plan for effective cash flow management. For example- in Sainsbury preparation of
budget documents should be looked as an annual collaborative exercise among operating
business units head, support functions and sales/marketing head, so that it is easy to prepare and
administer (Huang and Lo, 2012). While drawing the annual budget, it is very important to
incorporate business strategy as discussed by the management. Keeping the company’s long term
strategy in mind, provisions should be made to achieve them within the available financial and
non-financial resources based on the annual budge. The CEO or sales head of Sainsbury should
direct the revenue trend with a top down approach. The budgeting exercise brings all
stakeholders including board of the company on single platform and CFO plays a lead role in
terms of influencing decisions.
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P7 Financial state of the company
Sainsbury has covered a large market share in global market. It financial statements of
recent years, is as follow: -
Assets (£m) 2016 2016 2015 2015 2014
Reporting Date 4 May
2016
4 May
2016
6 May
2015
6 May
2015
7 May
2014
Tangible Assets 9,764.0 9,764.0 9,648.0 9,648.0 9,880.0
Intangible Assets & Goodwill 329.0 329.0 325.0 325.0 286.0
Investments & Other Non-Current
Assets 2,436.0 2,436.0 2,059.0 2,059.0 2,005.0
Total Non-Current Assets 12,529.0 12,529.0 12,032.0 12,032.0 12,171.0
Inventory 968.0 968.0 997.0 997.0 1,005.0
Trade & Receivables 508.0 508.0 471.0 471.0 433.0
Cash & Receivables 1,143.0 1,143.0 1,285.0 1,285.0 1,592.0
Other Current Assets & Assets Held
for Resale 1,825.0 1,825.0 1,752.0 1,752.0 1,339.0
Total Assets 16,973.0 16,973.0 16,537.0 16,537.0 16,540.0
Liabilities (£m) 2016 2016 2015 2015 2014
Short Term Liabilities 6,720.0 6,720.0 6,923.0 6,923.0 6,765.0
Long Term Liabilities 3,884.0 3,884.0 4,075.0 4,075.0 3,770.0
Other Liabilities / Pension etc. 4.0 4.0 0.0 0.0 0.0
Total Liabilities 10,608.0 10,608.0 10,998.0 10,998.0 10,535.0
Net Assets (£m) 2016 2016 2015 2015 2014
Net Assets 6,365.0 6,365.0 5,539.0 5,539.0 6,005.0
Equity 2016 2016 2015 2015 2014
Share Capital 550.0 550.0 548.0 548.0 545.0
Minority Interests 496.0 496.0 0.0 0.0 2.0
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Retained Earnings 3,370.0 3,370.0 3,057.0 3,057.0 3,560.0
Share Premium Account 1,114.0 1,114.0 1,108.0 1,108.0 1,091.0
Other Equity 835.0 835.0 826.0 826.0 807.0
Total Equity 6,365.00 6,365.00 5,539.00 5,539.00 6,005.00
Cash flow (£m) 2016 2016 2015 2015 2014
Cash flow from Operating
Activities 392.0 392.0 911.0 911.0 939.0
Cash flow Before Financing ( 8.0) ( 8.0) 11.0 11.0 1,365.0
Increase / Decrease in Cash (136.0) (136.0) (303.0) (303.0) 1,075.0
Income (£m) 2016 2016 2015 2015 2014
Turnover 23,506.0 23,506.0 23,775.0 23,775.0 23,949.0
Cost of Sales 22,050.0 22,050.0 22,567.0 22,567.0 22,562.0
Gross Profit 1,456.0 1,456.0 1,208.0 1,208.0 1,387.0
Operating Profit 707.0 707.0 81.0 81.0 1,009.0
Pre-Tax Profit 548.0 548.0 (72.0) (72.0) 898.0
Profit / Loss for the Year 471.0 471.0 (166.0) (166.0) 716.0
CONCLUSION
Form the above mentioned report, it has been concluded that, business resources having
an important role in growth and success of any organisation. The present report is based upon
Sainsburry. The first task of the report involves documentation which are required in recruitment
and selection of company. There are many physical and human resource through a company
achieve its goals and objectives from target market. Along with this, the second task is described
internal and external sources of finance; and the importance of budgeting is also defined.
At last the financial statement of Sainsburry is created.
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REFERENCES
Books and Journal
Baxter, R., 2012. How can business buyers attract sellers' resources?: Empirical evidence for
preferred customer treatment from suppliers. Industrial Marketing Management. 41(8).
pp.1249-1258.
Chow, A. T. and et. al., At&T Intellectual Property Ii, LP, 2011. Broadband network with
enterprise wireless communication system for residential and business environment.
U.S. Patent 7,944,948.
Ciabuschi, F., Perna, A. and Snehota, I., 2012. Assembling resources when forming a new
business. Journal of Business Research. 65(2). pp.220-229.
Grönroos, C., 2011. A service perspective on business relationships: The value creation,
interaction and marketing interface. Industrial marketing management. 40(2). pp.240-
247.
Huang, H. C., Lai, M. C. and Lo, K. W., 2012. Do founders' own resources matter? The
influence of business networks on start-up innovation and performance. Technovation.
32(5). pp.316-327.
Montgomery, C. A. ed., 2011. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media.
Morgan, N.A., 2012. Marketing and business performance. Journal of the Academy of Marketing
Science. 40(1). pp.102-119.
Wahl, M. and Prause, G., 2013. Toward understanding resources, competencies, and capabilities:
business model generation approach. Entrepreneurship and Sustainability Issues. 1(2).
pp.67-80.
Ward, J., 2016. Keeping the family business healthy: How to plan for continuing growth,
profitability, and family leadership. Springer.
Zott, C., Amit, R. and Massa, L., 2011. The business model: recent developments and future
research. Journal of management. 37(4). pp.1019-1042.
Online
Sources of Finance Available to a Company: Internal and External, 2017. [Online]. Available
through: <http://www.yourarticlelibrary.com/financial-management/sources-of-
finance/sources-of-finance-available-to-a-company-internal-and-external/69262/>.
[Accessed on 17th July 2017].
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