Sainsbury's Financial Analysis

Sainsbury’s have 157,000 employees and the amount of money that they profits per year is £25,632 million as 23 million customers come per week which demonstrates that it is a profit maker. The total sale of Sainsbury’s was +4.3% (including VAT, excluding fuel) in 2013, whereas the “like-to-like” sale was +1.8% (including VAT, excluding fuel) in 2013.

Research and development – totaled $98,280.00 in year 7, and in years 7 to 8 decreased -16.3% or $15,996.00. This is weakness in sales and performance, but a smart decision because of the cut in R&D saved -16.3% or $15,996.00 that would have been looked at as profit. They were able to use the previous year’s investment on R&D.

Past five years of retailing in UK is assumed as decline for the industry as this graph is showing that from 2009 to 2014, both the companies have experienced profitability in fluctuation. In 2009, both the companies increased its profitability massively after recession period, which went down slowly and gradually. Later, in 2010, Tesco faced a good reputation and a new come back after recession but for Sainsbury, 2010 was not much good but the last months of that year went remarkably good, which remain consistent till mid of 2011. However, Tesco was with constant fluctuation of increase and decrease of profitability in market but the last month of 2011 was bad for Tesco when company got bad reputation because of some food related scandals like scandal of horsemeat etc. This aspect gave benefit to Sainsbury and for that reason; the company has attained attention of customers of Tesco as well, which gradually went down till last month of 2014. On the other hand, when Tesco wrapped up its horsemeat scandal, the company faced the light of profitability, which also went down in end of

Sainsbury’s incentivise in making lives easier by delivering fair prices and quality services; location being key focus for both convenience and discount stores increasingly growing, enticing more consumers every day. J Sainsbury’s plc (2015) Strategic Report is divided in two sections; the non-financial KPIs are: Product Quality, Like-for-Like Transactions, Price perception, Sales growth, Service growth by Area/Channel, Availability and Customer Service that focuses on social responsibility as Fredrick (1960) and Friedman (1970) agrees in taking opportunities to fulfil the needs of stakeholders be it efficiency, that too ensuring the management follows governance, codes and compliance to minimise risks which enhances the socio-economic

Total profit show a positive increase from 18% in 2013 to 31% in 2015, far reaching the brothers’ preference of $1.1 M in 2015, Appendix 3 showed $1.4 M net profit

* This increase is mainly because of the 26.74% increment in PBIT but the assets went up only by 21.66%.

J Sainsbury's aims and objectives Their business is now focused very much on Sainsbury’s Supermarkets and Sainsbury’s Bank following the sale of Shaw’s

a. What is the nature of General Mills' business? That is, based on what you know about the company and on the accompanying financial statements, how does General Mills make money?

There is no doubt that the contribution of each of the group members is equal.

Sainsbury is engaged in grocery and related retailing. It is separated three segments: Retailing (Supermarkets and Convenience); Financial services (Sainsbury's Bank joint venture), and Property investments (The British Land Company PLC joint venture and Land Securities PLC joint venture). In 2012, this company has operated over 1000 stores comprising 572 supermarkets and 440 convenience stores (Sainsbury company information, 2013). In the current competitive food retail market Sainsbury has focused on its clear strength: providing shoppers with an easy alternative to the larger out-of-town supermarkets whilst maintaining a commitment to fresh quality foods (Sainsbury,

Operating Profit Margin (OPM) – this ratio gives the Sainsbury’s management a lot of important information about the firm profitability, mainly with respects to cost control. A high operating profit margin means that a company has a good cost control or/ and that sales are increasing faster than costs, which is the objective of every company. Sainsbury’s operating profit margin increased in 2014 by 0.43% to 4.21% (2013, 3.78%). This means that every £1 of sale earns a profit of 0.0421 pence in 2014 and 0.0378 in 2013. Sainsbury’s increased in profit margin beats rival Tesco which has seen its operating profit margin at 4.14%, 3.76% respectively.

* Net sales increased 11.5% to $97,062, driven by a 7% increase in comparable sales, sales at warehouses opened in 2011 and 2012 to the extent that they have been excluded from comparable warehouse sales and the benefit of one additional week of sales in 2012. Net sales were favorably impacted by increases in the price of gasoline, partially offset by the weakening of certain foreign currencies against the U.S. dollar;

Scenario Free Cash Flow to Equity Aggressive Neutral Conservati ve Expected return Neutral Prob. 0.25 0.5 0.25 1 N/A Predicted price £ 0.99 0.90 0.83 0.91 1.30 1/31/2010: £ 092 underpriced overpriced overpriced overpriced

In this report I will be analysing and evaluating the financial performance of Tesco PLC over the past 5 years (2010 to 2014).

* Earning per share is increasing and its specify that Net Income of the company is increasing.