Financial Performance and Sustainability Reporting of Sainsbury and Morrison

COURSEWORK

Table of Contents
INTRODUCTION...........................................................................................................................3
ANALYSIS......................................................................................................................................3
Evaluation of financial performance...........................................................................................3
Sustainability reporting................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................1
APPENDIX......................................................................................................................................3
Calculation of financial ratios......................................................................................................3

INTRODUCTION
Morrison
It is one of 4th largest chain of supermarket in UK with a headquarter in Bradford (About
us, 2021). As per its history it was founded by William Morrison in 1899 with the starting of
business as selling of egg and butter It sales a large proportion of product that may include the
food and drinks, clothing, homeware, books and various other. The main purpose of the
Morrison is to make the availability of healthy food at affordable price.
Sainsbury
It is the 2nd largest supermarket chain in the UK. it was founded by John James Sainsbury
in 1869 with a shop in Drury lane. Its headquarter is in London, UK. The aim of the Sainsbury is
to provide food at the fair price (About us., 2021). It always works with the perspective of being
fair to suppliers and the environment. It sells its product through supermarket, convenience shop
and various other mode. Its main purpose is to sell the products to its customers at the reasonable
rates. It act as main competitor of the other firm.
Both the company operate in the form of physical stores as well as perform the business
operations in the form of online and digital or online website medium.
ANALYSIS
Evaluation of financial performance
Ratio analysis:
It is an important concept through which the financial performance of the company can
be evaluate and measured. With the aspect of financial ratio analysis, the performance of the
company and its financial aspect can be measured.
Evaluation of financial performance of Sainsbury and Morrison:
Net profit ratio:
The NP ratio measure the net profit earned by the company in the respected year
(Kusmayadi, Rahman and Abdullah, 2018). In case of Sainsbury the NP ratio in 2020 was 0.52
while in 2021 it declines and become (0.96). However, in case of Morrison the NP ratio in 2020
was 1.98 while in 2021 it become 0.54. This it be evaluated that the net profit ratio in case of
Morrison is high while making it compared with the Sainsbury. Thus it can be said that that the

Morrison shows the positive financial performance while making it compared with the
Sainsbury. The declining ratio can be related with them declining proportion of sales with an
increasing amount of expenses. This is also related with the negative impact of the covid which
have a direct impact towards the sales of the company and thus affect the NP ratio and the
profitability of the company.
Current ratio:
This is also called liquidity ratio which measures the liquidity of the company in respect
to payment of short term liability (Nuryani and Sunarsi, 2020). In case of Sainsbury the current
ratio in 2020 was 0.62 while in 2021 it become 0.60. However, in case of Morrison the Current
ratio in 2020 was 0.38 while in 2021 it become 0.47. Thus, it can be evaluating that the current
ratio in Sainsbury is high while making it compared with the Morrison. This need to be improved
because a persistence of high current ratio shows that the holding of liquidity and cash by
Sainsbury is high which restrict the funds in terms of making an investment and raising of
interest income.
Debtor collection period:
It refers to the period that is related with the collection of money from the debtors which
are due (Ibrahim, Usaini and Elijah, 2021). While analysing the financial performance of the
Sainsbury it is analysed that the Debtor collection period in 2020 was 10.20 while in 2021 it
become 9.10. However, in case of Morrison the ratio in 2020 was 7.34 and in 2021 it become
6.96. This also shows that the financial performance of Sainsbury is low in comparison of
Morrison because of the persistence of high collection period in Sainsbury which delay the
payment from the debtor and thus impact towards the availability of funds.
Creditor payment period:
It refers to the period of payment in respect to the company that how many days after the
company make the payment to its creditors (Tran, 2020). In case of Sainsbury the ratio in 2020
was 58.25 while in 2021 it become 60.27. However, in case of Morrison the ratio in 2020 was
66.07 but in 2021 it become 59.63. This shows that the financial performance of the Sainsbury is
better with an increase in the number of payment period. However, with a declining number of
days in case of the Morrison the company’s performance can also be counted as declining and
need to be improved. With the persistence of the high payment period the company can make