Financial Analysis of Sainsbury PLC Essay

4585 Words Oct 27th, 2013 19 Pages
Financial Analysis Of
Sainsbury’s Plc
2010/2011

(Sainsbury supermarket, Blake 2012)

10105011

18/10/2012

Contents of Document
Section

Page

Contents.......................................................................................................................2
Introduction..................................................................................................................3
Subject company and history........................................................................................3
Profitability...................................................................................................................4
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The question is, how much has its expansionary policy supported its profits whilst maintaining equilibrium with costs? Profitability
Within this report, diligent focus will be shown to the financial year of 2010 and the final year of
2011 as the profitability, liquidity, efficiency, gearing ratios and working capital is examined. The profit from disposal of properties in 2010 was £27m and £108m in 2011 which shows a dramatic appreciation in profit when compared. Moreover, the company also showed an increase in combined profit from £585m in 2010 to £640m in 2011 (Sainsbury, Income Statement 2011 section). This shows that the company’s overall performance has improved over the course of 12 months by 9.4%.

Further to the aforesaid points, the greater percentage of revenue was derived from the sale of products and services, standing in at £22,943m in 2011 (Sainsbury, Income Statement 2011 section). This shows an increase in product purchases and an increase in market share (an increase of 16.1%, Telegraph, September 2011) leading to more sales, demonstrating that the firm’s strategy has worked for the financial year when compared to the sales of 2010 of £21,421m (Sainsbury,
Income Statement 2010 section).

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Return on Capital Employed can be defined as follows: “Return on capital employed is

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