Financial Performance Analysis Of Sainsbury
1.1 Executive Summary
The report on financial analysis of Sainsbury aims at examining the financial performance of J Sainsbury Plc for year 2015 and 2016. The main purpose of this report is to measure the financial performance of J Sainsbury Plc for helping the investors in their decision regarding investment in stock of Sainsbury. The financial ratios that will be used in analysis include profitability, liquidity, efficiency and investment ratios. For having better understanding of company performance, the company leading competitor Tesco plc in the retail market was selected and its financial ratios were also calculated. The findings of J Sainsbury ratio analysis are interpreted in relation to the findings of competitor’s performance.
The findings of Sainsbury financial and non-financial performance during the year 2015v and 2016 revealed that company has performed well for retaining its leadership in the UK retail market. J Sainsbury plc has earned high earnings for its investors through efficient utilizations of its assets and capital employed, reduction in production and operational costs. The company although liquidity position is weak but management has taken necessary steps for meeting the short term obligations on time. Due to company less reliance on debt, firm is less exposed to financial risks. The company positive earnings, increased profitability, less exposure to financial risk and offer of dividends make the company more attractive for investment purposes. The report suggest the investor to investment in shares of Sainsbury as the financial and non-financial analysis prove that company is strategically and financially strong.
The financial and non-financial information of the companies is usually analysed by the financial analysts for determining the company financial health and stability. The financial ratios are often calculated for examining the financial statements as it assists the potential investors of the company in determination of their investment value (Armstrong et al., 2015).