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Financial Analysis and Management Assignment Sample

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Added on  2021-02-19

Financial Analysis and Management Assignment Sample

   Added on 2021-02-19

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Financial AnalysisManagement & Enterprise
Financial Analysis and Management Assignment Sample_1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1MAIN BODY...................................................................................................................................11. Financial statement of Sainsbury and Tesco...........................................................................12. Importance of analysing working capital in the organisation...............................................113. Evaluation of cash flow of last 2 year of the company.........................................................13CONCLUSION..............................................................................................................................15REFERENCES..............................................................................................................................16
Financial Analysis and Management Assignment Sample_2
INTRODUCTIONFinancial analysis is an effective process of analysing the financial statement such asincome statement, balance sheet and cash flow of the company in order to assess the viability,performance and profitability of the company. It is an effective process as it helps in determiningthe cost of the project, budget and various other expenses. The aim of this study is to make a detailed horizontal, vertical and ratio analysis of thefinancial statements of the company. This study also outlines the value of examining the workingcapital of the Sainsbury and Tesco in order to make strategic decision. This study will alsocritically analyse the annual cash flow statements over the last 2 years. Sainsbury's is one of the second largest retail company, which was founded in the year1869 by John James Sainsbury. It mainly deals in groceries, food products, forecourt shop, etc. Tesco plc. is a multinational British retail company which was founded in the year 1919by Jack Cohen. It mainly deals in furniture, groceries, petrol, software, telecom services,electronics, financial services, etc. MAIN BODY1. Financial statement of Sainsbury and Tesco.Profitability ratio analysis GP ratioYear / companiesSainsburyTesco20166.19%5.24%20176.23%5.19%20186.61%5.83%20196.92%6.48%NP ratio Year / companiesSainsburyTesco20162%.25%1
Financial Analysis and Management Assignment Sample_3
20171.44%-0.07%20181.09%2.10%2019.75%2.07%InterpretationProfitability ratios of the company helps in assessing the ability of the company togenerate various earnings to the company for the particular period. It helps company show howthe existing assets of the company are performing. Higher profitability ratio of the company ismost favourable as it helps in effectively comparing the results from others. The gross profit ratioof the Sainsbury and Tesco states that the Sainsbury company is generating higher profit and alosimproves its performance and productivity in comparison with Tesco. The net profit ratio of Sainsbury and Tesco states that in the past 4 years, Tesco generateshigh profits as compared to Sainsbury. The NP of Saisaburty is declining every year from the2016. On the contrary, the NP of Tesco is increasing which helps them in maintainingcompetitive position in the market. Liquidity ratio analysisCurrent ratio Year / companiesSainsburyTesco2016.66.752017.74.792018.76.712019.66.61Quick ratio Year / companiesSainsburyTesco2016.52.612017.53.682018.59.602019.50.49Interpretation: Liquidity ratio is very useful as it helps in determining the liquidityposition of the company and also determine the current debt position of the company in order toattain higher operational standards. It helps in determining the capability of the company pay offits debt. 2
Financial Analysis and Management Assignment Sample_4

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