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Financial Management INTRODUCTION 3 MAIN BODY 3 Financial Ratio Analysis of Tesco and Sainsbury

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Added on  2020-02-12

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FINANCIAL MANAGEMENT CONCLUSION 3 MAIN BODY 3 Financial ratio analysis of Tesco and Sainsbury for the period of Five years ‘ 3 INTRODUCTION 7 RECOMMENDATIONS 7 REFERENCES 9 APPENDIX ] 10 SUMMARY Financial management is highly concerned with making suitable decision by making evaluation of the monetary health and performance. Hence, Tesco has maintained high profitability ratio from the period of 2012 to 2016 (Appendix 1 Sainsbury Gross profit ratio:From 2012 to 2016, GP ratio of Tesco declined from 8% to 0%.

Financial Management INTRODUCTION 3 MAIN BODY 3 Financial Ratio Analysis of Tesco and Sainsbury

   Added on 2020-02-12

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Financial Management
Financial Management INTRODUCTION 3 MAIN BODY 3 Financial Ratio Analysis of Tesco and Sainsbury_1
Table of ContentsINTRODUCTION...........................................................................................................................3MAIN BODY..................................................................................................................................3Financial ratio analysis of Tesco and Sainsbury for the period of Five years ‘...........................3CONCLUSION................................................................................................................................7RECOMMENDATIONS.................................................................................................................7REFERENCES................................................................................................................................9APPENDIX ].................................................................................................................................10
Financial Management INTRODUCTION 3 MAIN BODY 3 Financial Ratio Analysis of Tesco and Sainsbury_2
INTRODUCTIONFinancial management is highly concerned with making suitable decision by makingevaluation of the monetary health and performance. In the present times, effectual managementof fund is highly required to attain organizational aims and objectives. Hence, by using ratioanalysis tool business unit can assess the extent to which it has made optimum use of funds overthe time frame and as compared to the competitors. This project report is based on Tesco andSainsbury which are the leading retail organizations of UK. Both the firms are competing witheach other in terms of customer base and market position.Hence, in this, report will shed light onthe financial health and performance ofTesco over the period of five years. Besides this, it alsoentails the extent to which Tesco has generated enough profitability in against to the rival firm. MAIN BODYFinancial ratio analysis of Tesco and Sainsbury for the period of Five years ‘Profitability ratiosEnclosed in Appendix 2Tesco 20122013201420152016-10%-8%-6%-4%-2%0%2%4%6%8%10%Gross Profit RatioOperating Profit RatioNet Profit Ratio
Financial Management INTRODUCTION 3 MAIN BODY 3 Financial Ratio Analysis of Tesco and Sainsbury_3
Enclosed in Appendix 1 Sainsbury 20122013201420152016-2.00%-1.00%0.00%1.00%2.00%3.00%4.00%5.00%6.00%7.00%Gross profit margin Net profit margin operating profit margin Gross profit ratio:From 2012 to 2016, GP ratio of Tesco declined from 8% to 0%. At theend of 2016, GP margin accounts for 0% which is not good for the company’s financialaspects. Declining trend shows that direct expenses of the firm was high during theperiod of 5 years.It caused to high decrease inGP margin of the firm. In addition to this,sales revenueof Tesco also declined from £63916 to £54433 in the year of 2016. Hence,people believethat quality of products offered by Tesco is not good. Due to this, saleslevel of Tesco decreased over the time frame (Ritter, Schmidt and Vance, 2016).Outcome of financial statement analysis shows that in GP margin of Sainsbury increasedfrom 5.43% to 6.19%. This aspect shows that as compared to Tesco, Sainsbury hasmaintained effectual on expenses. However, sales level of Sainsbury also declined in theperiod of 2016as compared to 2014 &2015. Operating profit ratio:OP margin of Tesco was not good during the period of five years.In 2012, OP margin accounts for 4%, whereas it reached on 2% by the end of 2016.Itpresents that level of expenses increased significantly as compared to the before times. In2015, operating margin of the firm was negative which that profitability aspect of Tesco
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