A UK based company J Sainsbury plc a firm which is into grocery, retailing and financial services business. The research is mainly to do the financial assessment of Sainsbury and the performance in compared to its industry competitors. Looking at the last 2 years report the company is now recovering from its passed performances. In recent years there has been many changes in the management and the board which has adopted many different approaches like expanding on retail, renovating, re-engineering of supply chain, brand repositioning, quality improvement, coat reduction and also in IT devision, which gave a lot of sales and profit to the company.
If we look in the past ...view middle of the document...
The Group's share of results of its joint ventures are included in the income statement and makes use of the equity method of accounting. The Group's eradicate the profits and the losses interest in the joint venture. Joint ventures passes the investment in the Group balance sheet at the cost plus post-acquisition changes in the Group's net assets, less any difference in the value. (J Sainbury 2009).
Revenue can be described as the risks and rewards of the services and the products which have been sent to buyers which are efficiently measured.
Revenue is the sales of the retail outlets which do not include Value Added Tax. (J Sainbury 2009).
Fixed Assets and Depreciation:
The fixed assets like land and building are made on cost less accumulated depreciation and also include impairment losses. The cost involves borrowing and costs directly attributable which are prepared in accordance with the policy of the group.
To write off the cost of the assets depreciation is calculated to their residual values, on a straight-line method on the leasehold properties and freehold buildings - 50 years, or the lease term if the lease term is shorter and fixtures, equipment and vehicles - 3 to 15 years.
(J Sainbury 2009).
The value of inventories are lower of cost and net realisable value, first in , first out basis is used in the warehouse and in retail it is calculated by average cost prices. The cost consist of all direct expenses and other suitable attributable costs which are used to bring the inventories to their present location (J Sainbury 2009).
A huge sum of expenditure is put on Employees costs, which raised from (£m)1,957 in 2008 to 2,003 in 2009. Profits are high on sales (£m) 57 in 2009 as compared to 7 in 2008. Auditors remuneration has been greater than before to 1.7 million pounds in 2009 from 1.5 in 2008.
Property Plants and Equipments
The cost of plant and machinery has increased to 12,351 in 2009 than 11,745 in 2008 (£M), which indirectly increases the accumulated depreciation and impairment. The net book value of land and building is as follows: 2009 2008
Short leasehold 520 505
Long leasehold 951 938
Freehold land and building 4,777 4,502
The calculation of earnings per share can be done by the ongoing operations which is equal to earnings before deducting the interest payments, and income taxes, which is also called earnings before interest and taxes or operating income (J Sainbury 2009).
Provisions for Group proves to be tedious , the groups figures have increased from £73 m to £76m in 2009, but the sainsburys total provision has decreased by £28m to £29m in 2008.
The disposal provisions relate to indemnities rising from the disposal of subsidiaries, where the timing of utilisation is uncertain (J Sainbury 2009).
3. Evaluation of Financial performance of Sainsbury Plc
Ratio is a quantitative relation between two amounts showing the number of times one...