Financial Performance Management

Financial Performance Management
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Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Question 1........................................................................................................................................3
Ratio Analysis:.................................................................................................................................8
Question 2........................................................................................................................................9
Evaluation of Kaplan and Norton’s Balanced Scorecard as a Strategic Management System9
Question 3......................................................................................................................................12
Brief description regarding benefits & challenges adopting integrated reporting...............12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
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INTRODUCTION
Financial performance management is mechanism of a business managing and
monitoring financial results around the board. Financial performance management's core goal is
to equate real outcomes to budgets as well as projections and make changes as required. The
primary aim of the Financial Performance Management, also recognized as the Corporate
Performance Management, is to assist organizations in maximizing sales and operating profits
while also increasing shareholder wealth by connecting strategy to strategies and implementation
through main processes such as goal-setting, modelling, preparing, estimating, close
management including financial reporting (Albuhisi and Abdallah, 2018).
In a nutshell, the adhesive that connects all of an organization's diverse financial as well as
strategic details to strengthen strategy as well as decision-making and illuminate the path
forward. Financial output is subjective indicator of a company's ability to produce sales from its
main mode of operation. The concept is often used as a broad indicator of a company’s overall
fiscal health over time. Financial output is used by analysts and stakeholders to compare related
companies in same industry or even to compare markets or sectors as a whole.
In this report, Sainsbury Plc has been chosen. Sainsbury Plc is UK based corporation
which is leading operator of supermarket of UK. Whereas in the study, second company chosen
is Mark and Spenser, which is one of top competitor of Sainsbury plc and leading supermarket
chain in UK. The study consists of three tasks, the first one covers application of ratio analysis
approach to analyse overall financial performance of these two corporations as well as a
comprehensive comparative evaluation. The second task covers evaluation of Kaplan and
Norton’s Balanced Scorecard as a Strategic Management System of Sainsbury plc. While the
third task of study covers critical analysis of key benefits and challenges of adopting Integrated
Reporting (IR) of Sainsbury plc.
MAIN BODY
Question 1
Sainsbury Plc Ratio 2018-2019
2018 2019
Liquidity ratios
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Current ratio: Current assets/current liabilities
Current assets 7866 7589
Current liabilities 10302 11417
Current ratio 0.76 0.66
Quick ratio: Quick assets/current liabilities
Quick assets 5975 5594
Current liabilities 10302 11417
Quick ratio 0.58 0.49
Profitability ratio
Gross profit ratio: GP/sales*100
Gross profit 1882 2007
Net sales 28456 29007
GP Ratio 6.61 6.92
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