FINANCIAL INFORMATION

Financial Information

Financial Information

Question 1:

What is/are the principal activity/activities of this business?

The Morrison's company is one of the largest food retailers that offer its customers with unique and high quality fresh food at suitable prices. The fresh food is mainly prepared by the retailers their self. The company mainly focuses on the quality, freshness and the attribution of the food that serves the individuals with great deal of taste on different occasions. The trade has been done by the Morrison Company for the food long time back now and has made them the experts in the food retailing in the whole world. The company is greatly renowned for its food services that provide excellent services to its customer by providing tasty and hygienic food at the reasonable prices. Morrison (Wm.) Supermarkets is engaged in the grocery retailing in the United Kingdom. Through its subsidiaries, Co.'s business activities involve the manufacture and distribution of fresh food products including vegetables; captive insurer; fresh meat processor; product packaging and wholesaler; bakery operations; property development; property investment; and grocery retailing. As of Jan 30 2011, Co. had a total of 439 stores across the United Kingdom.

Question 2:

Comment on the outcome of the auditor's report for Morrison Plc. Briefly discuss the importance the auditor's report with respect to financial information.

The auditor's report is of great help for the evaluation of the company's performance in the past years. There are lots of advantages associated with the usage of the financial statements. The security analysts can make use of the financial statements for forecasting the future rates of securities. The most important benefit that the financial statements are usually used for is the ideas that are taken by the investors through these financial statements. The financial statement provides the cost and benefit analysis to the investors whether they should invest in a specific firm or not.

Similarly, the government authorities that are made for regulating the financial and accounting standards also make use of the financial statements for checking whether the corporations are following the accounting principles and rules in their business operations or not. Moreover, the government authorities can also make use of the financial statements for analyzing the tax evasion activities among the firms. The tax that is due on the corporations can be greatly analyzed through the accounts in its financial statements. It will provide benefit to the government authorities to prevent the tax evading activities in the country.

The financial statements are also used by the corporations to evaluate the performance of the firm by taking into account different ratios. The profitability ratios and the liquidity ratios are of great help to the corporations for comparing their past and present performance. It also makes the firm to analyze the areas where they need improvement and where it is lacking behind. On the basis of these ratios of the financial statements, the firms can predict their future success or failure. The significance of income statement in term of application in personal life is quite ...