Financial Ratio Analysis - PDF

Added on - 21 Feb 2021

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TABLE OF CONTENTSINTRODUCTION...........................................................................................................................11. Financial analysis....................................................................................................................12. Outlining significance of the working capital for both the organization................................13. Critical analysis of cash flow report of both the companies...................................................2CONCLUSION................................................................................................................................4REFERENCES................................................................................................................................5
INTRODUCTIONThe financial analysis includes preparation, review and analysis of financial accounts andstatements for executing better economic decisions. Procedure of determining strength andweaknesses in context of finance through establishing of different strategic relationship inbetween balance sheet items, profit and loss account and other statements. The analysis infinance is associated with simplify the financial data of a financial statement. This report willcover details which will highlight about large Asian Manufacturing Food units. The report willlay emphasis on two big corporates that is Sainsbury group plc and Tesco group. Vertical,horizontal statement will be prepared for both the companies along with detailed ratio analysis ofthe two will be undertaken. The report will also highlight about analysing the importance ofworking capital for Tesco and Sainsbury plc to execute decision making. Along with this, thereport will critically analyse the annual cash flow statements for both the companies over the lasttwo years. The finding will also be assist in context of process of decision making.1. Financial analysisRatio analysis- It is the quantitative methods that is been used by the firm for gaininginsight within the liquidity, efficiency, profitability and the operational performance by makingthe comparison of the information that is contained in the financial statements (Ramiah, V. andet.al., 2016). This tool is used for establishing the trend analysis within different company.Horizontal analysis- It refers to the method that focuses on the assessing the financialstatement in order to compare the historical data, accounting periods, line items and the ratioover the number of periods. It is also known as the base-year assessment.Vertical analysis- It means the proportional analysis where each and every line item ofthe financial report is been listed as the percentage of the another item. It is the tool that makesthe comparison easy of one entity with that of another (Li, D. and Wu, W., 2017). It is been usedin for assessing the picture relating to finding out that whether the performance of anorganization is improving or been deteriorating.Ratio Analysis:
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