Monday, January 27, 2020

Sainsburys Ratio Analysis

Sainsburys Ratio Analysis Accounting and Finance Assignment Sainsburys Ratio Analysis Nowadays, it is important for organizations to know how to survive in the competitive market in which they are involved, markets that require managers who understand and are aware of the internal and external factors that concerns to the company. Therefore, it is vital to know the existence of different techniques of measurement such as financial tools, which can give an idea on how the companys financial situation is going to affect its performance in the marketplace. One of these tools can be the used of financial ratios, which gives to managers the information to set up strategies in order to make decisions in the future. However, it is important to highlight that this ratios provide an overview of the businesss financial condition, but an analysis in depth is needed to know the reasons why certain changes have occurred (Maclaney and Atrill, 2002). Nevertheless, there are some limitations in the used of financial ratios, for instance, the information is out of date so it does not reflect the real situation of the company, hence it can lead to wrong decisions, also, the analysis made from the financial statements gives symptoms of such situations but not the causes of it (Berry and Jarvis, 1997). The purpose of this report is to analyze Sainsburys financial performance using the analysis of ratios as a financial tool. This information will be taken from the annual reports of 2003 and 2004. In addition, it will include external and relevant information of the company which adds value to the analysis and thus to the financial performance in the already mentioned period of time. This will also help to compare Sainsburys with its competitor Tesco, in order to identify and evaluate the performance of both companies. Finally, this report will give conclusions and recommendations to those investors who want to make an investment in a secure company. RATIO ANALYSIS Profitability Ratios According to Maclaney and Atrill (2002, p. 197), Profitability ratios provide an insight to the degree of success in achieving this purpose. For instance, the profitability ratios of Sainsbury plc are: Profitabiliy Ratios 2004 2003 Return on Capital Employed 8.53% 9.29% Return on Equity 7.64% 8.95% Gross Profit Margin 8.65% 8.14% Net Profit Margin 3.91% 4.25% Table 1. Profitability Ratios (Base on data contained in Appendix A) Regarding on this table, Sainsburys profitability ratios show a moderately deterioration in profit from 2003 to 2004 in a margin of 6%. This downward trend is due to several changes the company had such as, (1) the sell of JS Development and Shaws supermarket, this has an impact on the companys current assets (cash) and profit, in one hand it brings in cash for the sell but on the other hand it stops the daily cash input, consequently there were a decline in profit in 2.6%; (2) the purchase of Swan Infrastructure Holdings Limited, which consist of a whole modern IT system and it is part of a Business Transformation Programme, therefore, there was a rise in 6% of the capital employed (fixed assets and net debt), and also a significantly fall in cash in 27%. Because of all these reasons, there was a drop in profit, but as it is a long-term investment it is estimated to be an income generation in the future. Efficiency and Effectiveness Ratios These ratios are used to try and identify the strengths and weaknesses of a business using a variety of different ratios (Giles et al., 1994, p. 371). The following table illustrates the efficiency ratios used in Sainsburys case. Efficiency and Effectiveness 2004 2003 Fixed Asset Turnover 2 times 2.17 times Debtor Collection Period 1.51 days 2.48 days Creditor Payment Period 28.83 days 28.78 days Stock Holding Period 17.61 days 18.67 days Table 2. Efficiency and Effectiveness (Base on data contained in Appendix A) The fixed asset turnover has slightly decreased due to the acquisition of Swan Infrastructure Holdings Limited, which caused a rise of 7.73% on Sainsburys fixed assets in comparison with the year 2003. Moreover, sales have remained constant which have risen in 0.3%. The purchase of the IT systems will give opportunities to enhanced operational effectiveness, a stronger platform, low costs and an increased in sales. In what a debtor collection period concerns, although this ratio shows a very little period to collect debts from customers, it is logic for this kind of business to be like that owing to the fact that being a supermarket, sales are in cash, only a 8% of the current assets are related to debtors, which had a fall in almost 40% comparing with 2003. On the other hand, the creditor payment period has stayed constant and it shows good rates. The cycle of both debtor collection period and creditor payment period demonstrates that the company receive the money from their debtors before paying to their suppliers, which is good since they do not need to finance themselves but pay with the cash they get in from debtors. Regarding to the stock holding period, even though it has fallen in 1 day, it still is high for a business like supermarket in which the stock plays an important role because the rotation has to be in short periods of time to keep the food fresh. However, it is good to consider that Sainsbury also have a stock of electro domestics, entertainment, house-wares, etc., that the rotation is meant to be in long periods of time. Liquidity Ratios As Maclaney and Atrill (2002, p. 197) said, Certain ratios may be calculated that examine the relationship between liquid resources held and creditors due for payment in the near future. These ratios in Sainsburys company are as follow. Liquidity Ratios 2004 2003 Current Ratio 0.83:1 0.87:1 Acid Test (Quick Ratio) 0.67:1 0.70:1 Table 3. Liquidity Ratios (Base on data contained in Appendix B) The current ratio has a slightly fall, due to the current liabilities rising faster than the current assets. Looking at the current liabilities it can be seen that the company is using bank loans to finance the acquisition of the IT systems by the group, which increased in 63%. The current assets have also been affected by a decreased in 27% of cash account since a 10% of the purchase was made in cash. Similar situation happened with the acid test ratio with a slight fall in the rate. These ratios show a low rate, due to the fast stock rotation which produces cash sales. Although, it seems like the current assets do not cover the current liabilities, the liquid assets are used as productively by the growing of the business to make it more effective, thus profitable. Capital Gearing Ratios This is the relationship between the amount financed by the owners of the business and the amount contributed by outsiders (Maclaney and Atrill 2002, p. 197). For instance, Sainsburys capital gearing ratios are: Capital Gearing Ratios 2004 2003 Gearing Ratio 28.54% 25.97% Times Interest Covered 5.91 times 5.31 times Table 4. Capital Gearing Ratios (Base on data contained in Appendix B) The gearing ratio has increased by 9% due to the long-term debts rising faster than the capital employed during the period from 2003 to 2004. The long term debts went up by 14%, which is because the purchase of IT fixed assets and also the company resort to operations in the capital market and by operating subsidiaries to deal with the interest rate and current risk these finance involves. On the other hand, the times interest covered stayed constant and even though is a low rate, the company still can cover its interest with their profit. Investor Ratios Certain ratios are concerned with assessing the returns and performance of shares held in a particular business (McLaney et al., 2002, p. 197). In this case, the investor ratios for Sainsburys are the followings: Investor Ratios 2004 2003 Earnings per Share 0.20 0.23 Price Earnings Ratio 12.63 times 9.54 times Dividend Yield 6 6.89 Dividend Cover 1.32 1.52 Table 5. Investor Ratios (Base on data contained in Appendix B) The earning per share has fall by 13% mainly caused by the higher profits on business disposals that the company went through last year, so the return to shareholders was a lower rate per share. In contrast, the price earning per share growth by 24%, due to the increase in the market share price in 14%, this is a good new for Sainsburys since it reflects that the market confidence grew from 2003 to 2004. The dividend yield had a slightly decreased since the dividend per share only increased by 0.7% from last year. This was a decision from the company and it reflects the reduction in the earning per share already mentioned and the fall in the dividend cover by 13%. RECOMMENDATION TO POTENTIAL INVESTORS According to the information given by the ratios analysis in the last section, it can be said that even though the companys ratios showed a decreased rates from 2003 to 2004, the expectations of the business performance looks profitable. This is due to the Business Transformation Programme, which consists on the acquisition of IT systems and the sell of Shaws Supermarket and JS Development. The former will be a positive impact in the financial performance of the company in a long-term by increasing sales and reducing costs; and the latter will be used to develop and make more effective the financial and management resources, hence it will enlarge Sainsburys core UK business and strengthen its market position. Therefore, from the ratios analysis, it can be stated that Sainsburys is not a good company to, at present time invest in, since the company has not showed a significant growth in profit during the last financial year. To conclude, if Sainsburys finances start to grow, there is no doubt that investors should consider this company to invest in as it plans a better performance in the long-term. In the next part, it will be given some additional information about Sainsburys and also a comparison with Tesco. RELEVANT INFORMATION ABOUT SAINSBURYS The acquisition of IT system was an important contribution to lead Sainsburys strength its position in the high competitive marketplace. Whereas the group chief executive of Sainsburys said: The net reduction in costs will provide Sainsburys with additional resources to develop our customer proposition, by investing in quality and innovation and improving further our competitive offer, as we move towards trading our business harder from summer 2004 (http://www.j-sainsbury.co.uk/index.asp?PageID=19subsection=Year=2004NewsID=384), there are some opinions that contrast with the statement already mentioned, which states that this acquisition of sophisticated technology was too ambition and did the approach too quick, now Sainsburys is in a worst position than it was before (Smiddy cited OBrian, 2004). In addition, after have used the new IT system, Sainsburys realized that the supply chain system have failed and it did not work as they have expected, it did not increased productivity and the costs were higher than they were years ago (http://www.computerweekly.com). SAINSBURYS vs. TESCO The supermarket industry is very competitive nowadays, and even more when it comes to the customers satisfaction which is more and more demanding, so it is important for companies in this business to be focus in valued than in profitability, since the former leads them to the latter. Sainsburys and Tesco are two of the principles supermarket chains in UK. Both chains have similar things to offer, such as own label goods; have concern about consumers needs for example healthy and organic food; launched loyalty cards; expand their products such as clothing, electro domestics, etc. and others. On the other hand, they have some differences that make one stand out from the other. While Tesco have a good supply chains and a good strategy, which is having low prices and improving customer satisfaction by having the right products in shelf, Sainsburys is facing some problems in what a supply chain relates to the implementation of the IT system (http://proquest.umi.com), which causes the lack of products in the shops and also the customers find it more expensive than its competitors, where they can have equal quality products with lower price (http://proquest.umi.com). There are other differences between Sainsburys and Tesco, but there is an important question which is where to invest?. It is important to draw attention to the fact that Sainsburys financial situation does not attract investors, due to the decrease in the profit and sales. In addition, the company has being going through its first loss in 135 years of history (www.accountancyage.com). This reduction was mainly caused by the 554 million acquisition of IT system, and by the drop in profits for the financial year. Thus, it can be said that Tesco might be a better choice to invest in, but this is open to discussion. CONCLUSION Taking into consideration the ratio analysis applied to Sainsburys, it can be said that the company had some variation between 2003 and 2004. Whereas, most of the profitability, efficiency and effectiveness, liquidity and investor ratios demonstrate decline, the gearing ratios demonstrate a rise due to the growth in the long-term debts and the capital employed. Understanding the ratio analysis and the relevant information gathered looks like Sainsburys has gone through some difficulties in their supply chain and their financial and marketing management. Although they have invested in a long-term project and are positive in a potential growth in the coming years, to reach their aim they have to work hard and play in the same field its competitors (Tesco and Asda) are doing, by having low prices and good quality food always available in their shelf for all kind of consumers. Sainsburys still have a strong position in the retail sector in the UK. For this reason it is good for investors to wait and see its performance for the next years, currently is not a good moment to invest in. REFERENCES BERRY, A. and JARVIS, R., 1997. Accounting in a Business Context. 3rd Edition. London: International Thomson Business Press. GILES, R. and CAPEL, J., 1994. Finance and accounting. 3rd Edition. London: MacMillan. HARDING, D., 2005. Supermarket sweep-up for Sainsburys. Accountancy Age. Available from: [http://www.accountancyage.com/news/1139885] Accessed 22/Apr/2005. MARKETING WEEK, 2004. Reinvention is the only option left for Sainsburys. Marketing Week, pg. 30. Available from: [http://proquest.umi.com/pqdweb?did=727035691sid=8Fmt=3clientId=15517RQT=309VName=PQD] Accessed 20/Apr/2005. MARKETING WEEK, 2005. Sainsburys promises must mean business. Marketing Week, pg.22. Available from: [http://proquest.umi.com/pqdweb?did=792773011sid=9Fmt=3clientId=15517RQT=309VName=PQD] Accessed 20/Apr/2005. MCLANEY, E. and ATRILL, P., 2002. Accounting An Introduction. Second edition. London: Prentice Hall. OBRIEN, L., 2004. Sainsburys blames profit warning on supply failures. Supply Management, 9 (22). Available from: [http://proquest.umi.com/pqdweb?did=749826531sid=8Fmt=4clientId=15517RQT=309VName=PQD] Accessed 20/Apr/2005. SAINSBURYS WEBSITE, 2005. Annual Report and Financial Statements 2004. Available from: [http://www.j-sainsbury.co.uk/index.asp?pageid=20] Accessed 15/Apr/2005. SAINSBURYS WEBSITE, 2005. Sainsburys simplifies financing of IT contract with Accenture. Investor News. Available from: [http://www.j-sainsbury.co.uk/index.asp?PageID=19subsection=Year=2004NewsID=384] Accessed 20/Apr/2005.

Sunday, January 19, 2020

Othello and Family Guy Essay

QuagmireOthello Cast inspired by the characters of Michaela N Cleveland Brown as Othello Cleveland Brown is overall a kind person with a hot temper. He becomes jealous easily, especially in terms of his marriage and wife. Cleveland trusts his friends to a fault, and is dim-witted. All these traits strike a strong resemblance to Othello. Similar to Othello, Cleveland racially does not fit in among friends, and both are treated different as a result. Both men also are trusted by their friends, and care more about what is going to make them happy in the moment, rather than long term. Cleveland and Othello tend to speak coarsely and slowly, as opposed to those who they mingle with. Othello and Cleveland furthermore are laid back. The men usually are the puppets of their mates, going with the flow and believing the most ridiculous of things. Cleveland represents Shakespeare’s Othello quite perfectly. Brian as Iago Brian is extremely intelligent, logical, and rational character. He is trusted, but not loyal to those who trust him. His motivations are not always clear or obvious. Brian is thought of as â€Å"man’s best friend† but he doesn’t act that way. He is generally mean spirited, quick-tempered, and has a sarcastic, dry, yet hilarious, sense of humor. These traits bear resemblance to Iago, Othello’s enemy. Iago and Brian are also manipulative, deceptive, and untrustworthy. Both characters lack a sense of emotion and compassion, as they are willing to do things, like kill friends or a wife, easily. Brian has a crush on Louis, and Iago is taken by Desdemona. Together they have a love-hate relationship with women, enjoying them physically, but annoyed with femininity and emotional drama. Iago and Brian mirror each other perfectly. Lois as Desdemona Lois is a complex, sweet, yet dark, jealous, and somewhat cold-hearted woman. She is known to cheat, be devious, and be extremely flirtatious, which in turn gets her into trouble. She loves her husband, but doesn’t have a problem with being unfaithful to him. She is known to be a beauty, and to have left her father to pursue a crazy lifestyle. Lois is a strong, independent woman despite being a wife. She furthermore has a bewitching affect over men, and she uses this gift to get what she wants. Desdemona is very much like Lois in all this attributes. Desdemona seems innocent but is truly brilliantly mischievous. Both are smart, but don’t always think before they act. They are both comparable, thus match beautifully. Joe Swanson as Michael Cassio Joe makes a perfect Cassio. Joe is a police officer, just as Cassio is a lieutenant. Joe is devoted, loyal, moral, masculine, buff, admirable, and honorable. Cassio in ‘Othello’ is also very much like this. Glenn Quagmire as Roderigo Roderigo is rich, rather foolish, too trusting of Iago, and interested in Desdemona. Quagmire is also well off, acts unintelligently, and is interested in women to an extreme. Both men are so obsessed over a certain woman they will do whatever it takes. They trust their friends to a fault and lack compassion. Both men exemplify immaturity too. Therefore, Quagmire and Roderigo quite nicely pair up. Bonnie as Bianca Bianca and Bonnie were prostitutes, loved fame and a title. They spoke softly and meaningfully. ‘ Carter as Brabanzio Carter is fatherly, rich, over-protective of his daughter, self-important, powerful, devious, blustering, and gets angry with his daughter’s husband numerously. Brabanzio is also fatherly, a senator, very protective of his daughter, devious, blubbering, self-intelligible, and is upset when his daughter leaves him for Othello. Both men hate their sons-in-law with a fiery passion. They are two of a kind.

Saturday, January 11, 2020

Sports Day

Sports Day Sports Day Sport day is took placed in every school every year, seemed like just an ordinary day when all students come and do some activities together, but there are more interesting things when you take a look of sport day deeply. Fun, harmony, friendship between the senior and the junior are able to be seen from that day, Sport day. My duty was to do the equipments. My friends and I had to do try to sew it as quick as possible. One of my friend said we worked like the machine.Many of my friends came to help though it was not on their responsibilities. Finally, we had done. As a result of cooperation, everything can be done successfully. It made me and my friends spend the time with each other more and more. One day before sports day, many of my friends and I worked together until night. I have never gone home late like this before. Although very tired, I concentrated on my work. It made me and friends fun, have much more unity in the class, have the friendship between o ther classes. Releted essay –  An Empty Purse Frightens Away FriendsAnd my impression on this activity is when I saw everybody help each other do their work and in the real sport day that I saw everybody try to do their best. It’s very impressed me. These sport day activities gave me many lessons such as, make me has more patience, make me have to talk to each other before do everything to get the success work, make me have to do the work against time but the work must be in high quality, and the last it’s taught me that although we win or we lose, it’s doesn’t matter if we do our best.There are many people who think that sport day is ridiculous. However, if you don't come and see how superb the sport day is, you will never feel such a great experience like this. Thanks to Triamudomsuksa School for giving me and my friends this wonderful day. I am proud to be a part of this event. I will consider this day as the most memorable day in my life. Sports Day COMPETENCY LEVEL TEST Date: CHEMISTRY Grade:State true or false. The minimum number of carbon atoms in a ketone molecule is two. (1) 5. How does the number of valence electrons vary on moving from left to right in a period? (1) 6. The horizontal rows in a periodic table are called as   (1) 7. Name the property of carbon element responsible for a large number of compounds having carbon. (1) 8. On what basis did Mendeleev arrange the elements in his periodic table? On what basis are they arranged now? (2) 9. Three elements A,B & C have electronic configurations (2,7) ; (2,8,1) & (2,8,7).Which pairs of elements belong to the same group. Which of these is a metal. (2) 10. Five elements A,B, C, D & E have atomic numbers 2,9,11,12 &20. respectively. (i) Which pair of elements are in the same period? (ii) Which of these belong to same period? (2) 11. State two characteristics of homologous series . (2) 12. State any two changes in the properties of I group elements of modern periodic tabl e, if we move downwards. (2) 13. How does metallic character varies in a group and a period? (2) 14. What are structural isomers? Write two structural isomers of butane.