MORRISON AND SAINSBURY

Morrison and Sainsbury

Morrison and Sainsbury

Introduction

The study is related to the Morrison plc; Morrison is engaged in the grocery retailing in the United Kingdom. Through its subsidiaries, Morrison'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, Morrison plc had a total of 439 stores across the United Kingdom.

In the industry, the competitor of Morrison plc is the Sainsbury, which is engaged in grocery and related retailing. Sainsbury is organized into three operating divisions: retailing (supermarkets, convenience and online); financial services (Sainsbury's Bank joint venture); and property investments (British Land joint venture and Land Securities joint venture). Sainsbury jointly owns Sainsbury's Bank with Lloyds Banking Group and has two property joint ventures with Land Securities Group PLC and The British Land Company PLC. Company's stores offer around 30,000 products and company offers complementary non-food products and services in many of its stores. Sainsbury also offers internet-based home delivery shopping service to U.K. households.

Context

This paper focuses on the financial status of Morrison plc. This study will describe the importance of choosing the right strategy. Internal and external analysis of Morrison plc made in order to maintain the status in comparison to the Sainsbury. It includes the model of the strategy in use. The company has become an example in the strategic management because of its successful implementation of the strategy. Internal and external analysis of Morrison plc shows the set of managerial decisions and actions that determine the long run performance of the corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. Morrison plc is one of the leading supermarkets in UK along with the Sainsbury.

Overview of Morrison

The financial performance of Morrison plc shows that the major portion of the company's assets is not comprised of liabilities; which is a good indication for the company as the company's short term and the long-term debts are decreasing (Lawrence, 2008). However, the company's equity seems good or satisfactory but it should be high as compare to the liabilities. In addition to this, the total assets per share and net assets per share reflect that the Morrison plc's assets structure is in good shape which shows that the company can meet its financial obligations that is liabilities is some sort of financial loss occur (Aggarwal, 1996). In addition to this, past studies states that the financial analysis are to determine whether there are liquidity problems, the study of profitability determines the evolution of the company and return on invested capital, management and analysis of related variables involved in the short-term financing, obtaining rotations and time of collection and payment means.

Key Financials

(In GBP as of 01/30/2011)

Income Statement

Revenue

16,479m

Net Income

632m

EPS - Net Income - Diluted

0.23

Revenue per Share

6.26

Balance Sheet

Total Assets

9,149m

Total Liabilities

3,729m

Shareholders' Equity

5,420m

Total Assets per Share

3.44

Net Assets per Share

2.04

Cash Flows

Cash from Operations

898m

Cash from Investing

-582m

Cash from Financing

-333m

Cash Flow per Share

0.33

Ratios of Morrison and Sainsbury

The given ratio analysis of Morrison and Sainsbury will ...