International Financial Reporting: A Comparative Analysis of J Sainsbury Plc and The Go-Ahead Group Plc

Running head: INTERNATIONAL FINANCIAL REPORTING
International financial reporting
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1INTERNATIONAL FINANCIAL REPORTING
Table of Contents
Introduction......................................................................................................................................2
Analysis...........................................................................................................................................3
Performance factors.........................................................................................................................7
Conclusion.......................................................................................................................................8
Reference.........................................................................................................................................9
Appendix........................................................................................................................................11

2INTERNATIONAL FINANCIAL REPORTING
Introduction
The main objective of the report is to compare the financial performance of 2 companies.
Selected 2 companies for this report are J Sainsbury Plc and The Go-Ahead Group Plc. The
report will analyse and compare the performances of the companies through computation of the
concerned company’s financial ratios. Apart from analysing the financial ratios the report will
also discuss the relevant non-financial factors associated with the company. Though ratios
analysis is a popular approach for analysing and comparing performances of the companies, it
has some limitations (Brigham et al. 2016). The limitations are – (i) for improving the ratios the
entity may make some last minute changes in the financial data (ii) ratios do not consider the
changes in the price level owing to inflation. Further, various ratios are there those are computed
on the basis of historical costs and hence, ignore the changes in price level for different periods
(iii) it considers only the monetary aspects and ignores qualitative aspects of the entity
completely (iv) it only takes into account the past performance of the company and does not
consider the future prospects of the entity (Rakićević et al. 2016).
Supermarket of Sainsbury was formed in the year 1869 by Mary Ann Sainsbury and John
James and the entity is largest standing retailing chain for major foods. Together with the
subsidiaries the entity is engaged in the general merchandise, food, clothing retail and the
activities related to financial services in UK. Mainly the entity operates through 4 segments –
retail – general clothing and merchandise, retail – food, property investment and financial
services (Sainsburys.co.uk 2019). The entity is further involved in the operation in general
merchandise, online grocery and offers toy, clothing, home technology and electrical products
along with energy solutions and loyalty program. Till March 2018, the entity operated through

3INTERNATIONAL FINANCIAL REPORTING
815 convenience stores and 608 supermarkets. Further, the entity offers the groceries under
different categories including veg, fruit, fish, meat, dairy, bakery, frozen and chilled food items,
drinks, health, beauty, household, baby products and the banking segment provides wide range
of products including the credit cards, insurance, loans and savings (Sainsburys.co.uk 2019).
On the other hand, The Go-Ahead Group Plc is among the leading public transport
companies in UK that enables more than a billion journeys every year on rail and bus services.
At The Go-Ahead Group Plc the entity place the great importance on the partnership and adopts
collaborative approach with the local communities, governments and the strategic partners. It
develops and operates various services that generate long term value for the customers (Go-
ahead Corporate Website 2019). Since the establishment the entity has transformed itself from
the small bus operator in the north-east region of England to the organisation that provides more
than billion journeys every year in UK rail and bus services. The entity has a developed approach
to management of train and bus operating entities. Further they autonomously run the locally
branded train and bus services and the management are empowered for direct responding to the
requirements of local communities they are serving. Working this way assures that the entity
retains the local strong expertise and can focus on requirements of the customers along with
adapting the changes quickly in the local markets (Go-ahead Corporate Website 2019).
Analysis
Ratio analysis is the comparison of 2 numbers against each other. Under finance, ratios
are considered as the correlation among 2 numbers or to be specific, 2 accounts. Numbers are
derived from financial statements and the ratios provide more clear understanding regarding the
performance of the company. Various ratios those will be considered for comparing the