Financial Research: Ocado Group Plc's Performance Over Ten Years

This report provides a comprehensive analysis and evaluation of the financial performance of Ocado Group Plc, a prominent UK-based online supermarket, over a ten-year period. The research delves into the company's operational activities and financial standing, aiming to understand the factors influencing its financial characteristics and competitive edge within the retail industry. The study examines both financial and non-financial factors, comparing Ocado's performance with other retail chains. The methodology includes an overview of the company, a review of relevant literature, and an explanation of the research philosophy, approach, strategy, and design. The report uses ratio analysis (profitability, liquidity, and efficiency ratios) to assess the financial health of Ocado Group Plc. The project also discusses the ethical considerations and limitations of the research and concludes with a summary of the findings.

ANALYSIS AND EVALUATION OF THE FINANCIAL PERFORMANCE OF OCADO GROUP PLC
PA304 FINANCIAL RESEARCH METHOD
SUBMITTED BY: TSHILONGO BANGAWA, 38335
GREENWICH SCHOOL OF MANAGEMENT

DECLARATION
I hereby disclose that the research paper entitled “ANALYSIS AND EVALUATION OF
THE FINANCIAL PERFORMANCE OF OCADO PLC OVER THE PAST TEN YEARS”
submitted by me to the university in partial and fulfilment of requirement for the degree of
Accounting and Finance. I hereby declare that the work provided is a work of my own and
does not have any resemblance with any other research paper.
Date: 14 December 2017
Signature: Bangawa
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ABSTRACT
This project paper involves discovering the financial performance of Ocado Group Plc, a
renowned supermarket chain that operates mainly in United Kingdom. The objective of the
paper has been to identify hoe the company has been functioning in the UK market and what
has been their financial performance for the past ten years. This has been done by
investigating the various events and functions that the company has been operating. On the
examination of such events it becomes clear and lucid that Ocado Plc has tried to operate
their company with the international and the domestic guidelines set forth by the government
and therefore, their financial performance has been in an ethical manner. This research
therefore highlights the factors that have an effect on the financial characteristic of Ocado Plc
and the strategies and policies that have been followed by the company in order to maintain
their competitive edge and in that manner maintain their level of profit. The paper has looked
to identify whether the company has been able to maintain profit or loss during the various
accounting years.
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ACKNOWLEDGEMENT
I would like to thank you my module leader Dr SeunOluwayi of the faculty of
Accounting and Finance at Greenwich School of Management. He has consistently
allowed this paper to be my own work, and guided me in the right the path whenever I
required assistance.
I would also like to acknowledge my kids Allegria, Elize and Dylan also my husband
Joao Pedro who have assisted me and has been by my side and keeping to strong in times
of array so that the paper could be completed within the stipulated time period.
Thanking you.
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Table of Contents
Chapter 1. INTRODUCTION...................................................................................................................1
1.1 Background.................................................................................................................................1
1.2 Aims and objectives....................................................................................................................1
1.3 Rationale.....................................................................................................................................2
1.4Scope............................................................................................................................................2
1.5Project Outline.............................................................................................................................2
Chapter 2.LITERATURE REVIEW............................................................................................................4
2.1 Introduction................................................................................................................................4
2.2 Overview of Ocado Group Plc.....................................................................................................4
2.3 Firm Performance.......................................................................................................................5
2.4 Non-financial performance.........................................................................................................6
2.5 Financial performance................................................................................................................6
2.6 Ratio Analysis..............................................................................................................................7
2.6.1 Profitability ratios................................................................................................................7
2.6.2 Liquidity ratios.....................................................................................................................7
2.6.3 Efficiency ratios....................................................................................................................7
2.7 Summary.....................................................................................................................................7
Chapter 3.METHODOLOGY...................................................................................................................8
3.1 Introduction................................................................................................................................8
3.2 Research Philosophy...................................................................................................................8
3.2.1 Research Approach..............................................................................................................9
3.2.2 Research Strategy..............................................................................................................10
3.2.3 Research Design.................................................................................................................10
3.3Variables Definition and Measurement....................................................................................10
3.3.1Measured variable.............................................................................................................10
3.4 Sample Selection and data collection procedures....................................................................12
The method of sampling explains the procedure in which the method of data collection in relation
to the topic of the research is selected from the concerned data set. There are two kinds of data that
are available for the purpose of completing a research. They are the primary data and secondary
data. The primary data comprises of the data that has been gathered for the first time and these data
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have not been used for any previous studies. The primary data is mostly collected from the
respondents who have been selected in order to conclude a research (Anand and Grover, 2015). On
the secondary data are the data that has been used previously in order to complete the data.
Secondary data has been gathered from various articles and journals with the help of which
information can be completed..........................................................................................................13
3.5Analytical Procedure..................................................................................................................14
3.6Ethical Issues..............................................................................................................................14
3.7Summary....................................................................................................................................14
4. Conclusion.......................................................................................................................................15
4.1 Limitation of the research.............................................................................................................15
5. Reference........................................................................................................................................16
Amaro, S. and Duarte, P. (2015). An integrative model of consumers' intentions to purchase travel
online. Tourism Management, 46, pp.64-79....................................................................................17
Anand, N. and Grover, N. (2015). Measuring retail supply chain performance. Benchmarking: An
International Journal, 22(1), pp.135-166........................................................................................17
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LIST OF FIGURES
Figures No Description Page
3.1 the honeycomb of Research Methodology 8
3.2 the different types of research philosophy 9
VI

LIST OF TABLE
Table No Description Page
3.3.1 Definitions and Measurement of Variable selected 12
VII

Chapter 1. INTRODUCTION
1.1 Background
In the modern era, there are serval companies that are functioning in the market with different
kinds of aims and objectives. With the advent of time and development of science and
technology there has been development of online stores and this has enhanced the lifestyle of
individuals. This paper concentrates on understanding the financial performance of an
organization and in that understands the aims and objectives of the company that has been
taken into consideration. The retail industry in United Kingdom is conquering the demands
that are in aspect to the regulatory and technological transformations during the time of
emphasising the transparency and bringing in innovation in the market as well as for the
customers (Pappas, 2016). The nature of retail industry in United Kingdom has the capability
to deliver products online over a distance and it comprises of logistics, distributors and
warehouses. This paper therefore has selected OcadoGroup Plc as the organization and their
financial performance for the past ten years would be assessed and analysed.
Ocado group Plc is a supermarket that operates in the UK. The firm like their rivals does not
have chain of stores and undertakes home deliveries from their warehouses. This organization
has been voted to be the best online supermarket in Unite Kingdom. The company is listed in
the London Stock Exchange and their headquarters in Hatfield, Hertfordshire in United
Kingdom. This firm primarily provides kitchen, pet and dining and beauty products under the
name of Ocado Group Plc, Sizzle, Fetch and Fable names. The organization even engages in
the monetization and development of intellectual technology and property that is utilised for
the online logistics, retailing, distribution of grocery and consumer goods. Furthermore, it is
associated in the insurance business as well. The firm was established in the year 2000. The
key strategic objective of the firm has been to align with the interests of their stakeholders,
investors and the customers in order to deliver long term value of the shareholders (Chang &
Tseng, 2013).
1.2 Aims and objectives
The aim of this research is to analyse and evaluateOcado Group Plc’s financial performance
over the last ten years by analysing few ratios to understand its overall performance and
financial standing and thereby assess the various activities that has an influence on the
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financial performance of a firm. The aims and goal of the research have been given as
follows:
 Understanding the financial and the non-financial factors that have an impact on the
performance of Ocado Group Plc.
 Analyse the operational activities of Ocado Group Plc with the help of which the
financial performance for the past ten years can be compared
 Undertaking a comparison of the financial performance of Ocado Plc with the other
retail chain business
1.3 Rationale
There are several companies in the retail sector that are operating in UK. There has been an
observation that most of the researchers have been taken place on the most renowned and
branded companies. However, this paper looks to assess the financial performance of a firm,
it is essential to select a firm on which very limited researches have been done so that a
comparison with the market leaders can even be undertaken.
Ocado Group Plc has been operating in the market for a long time and has been changing
their operational policies from time to time to the evolution and technology. The company
has even diversified themselves in the online retail services for the past few years and
therefore undertaking a comparison of their financial performance for the past ten years
would be fundamental to understand how changes have made in their profit level as well
(Ramanathan, Bentley and Pang, 2014).
1.4Scope
The scope of the study involves the development of an effective research that could be
influential for understanding the financial performance of Ocado Group Plc for the past ten
years. The scope of the research looks to understand the various changes that have taken
place during the course of ten years and how the operational activities have helped in the
development of the company. For this purpose, an analysis of financial performance of
Ocado Group Plc has been done from the past ten years published financial statement.
1.5Project Outline
This projectconsists of the course that would be followed in order to complete the research in
an effective manner and also consists of understanding the aims and goals of the research
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paper and the scope and limitations associated with this paper. The review of literature would
explain the various issues that have been answered by other researcher in the previous time.
The review of literature aids the researcher in following the process and understanding the
variables that are associated with the financial performance of an organization. The research
methodology explains the process in which the data are gathered and the variables that have
been used for the assessment of the financial performance of the firm. The sample selection
and the data gathering process and the assessment process of the financial data gathered from
the annual report is even vital for the completing of the paper precisely.
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Chapter 2.LITERATURE REVIEW
2.1 Introduction
This section of the paper mainly explains the researches done by previous researchers in
similar topic to online retail industry. This section will undertake a comprehensive
explanation on the practical and theoretical views of the earlier studies undertaken on online
shopping in the retail sector. This is inclusive of the attractiveness on the prices, saving of
time, risks that are perceived, excitement and enjoyment, increased interactivity and
tangibility. These factors will evaluate the purchasing intention of the customers that is seen
in online shopping.
Vlachos(2014)explained the purchasing intention as the encouragement of the purchase of the
products. It is anticipated that the shoppers are more likely to relate the price attractiveness
and time saving with their purpose to shop and on the other hand, in offline shopping the
customers are more likely to relate with tangibility, enjoyment, increase interactivity with
their purpose to shop. Therefore, the online retailers need to be aware of the issues faced by
the customers and the risks to raise their intention to shop online. The designers require
recording the needs of the consumers as the usability being the initial point to gain
confidence and assistance of the consumers. The company has been striving towards growth
and has their key strategies with respect to their various products and service offered by them.
2.2 Overview of Ocado Group Plc
Ocado Group Plc is an UK based online retailer and the principal operations of the company
has been retailing of the grocery, monetization and development of Intellectual Property and
the various technologies exploited for the intention of online retailing, distribution of grocery,
consumer goods and logistics that have been derived from the various aspect of UK. Some
various aspects have been explained as follows:
Grocery: in Ocado Group, the company has been concentrating on enhance every aspect of
the consumer business with the help of quality of their services and interface of the user, the
freshness of the product, the width and the availability of their level and competitiveness of
their product prices (Amora and Duarte, 2015).
General Merchandise: The centralised operating framework of the firm has assisted in
expanding their offer into the general merchandise categories (SafaeiGhadikolaei,
4