The aim of this report will be to analyse the effects which the economic downturn had on Sainsbury financial market and performance over the years of 2008 and 2009.
The report will be dissected into four main areas. Firstly, an analysis and evaluation of Sainsbury financial performance using ratios as a tool will be obtained from the annual reports of 2008 and 2009. A trend analysis will be done to demonstrate the pattern of Sainsbury financial performance over the years 2005 to 2009. Furthermore, an analysis and evaluation of developments in the supermarket industry will be done for the years 2008 and 2009.
In addition, a ‘what if’ analysis of the probable financial performance of Sainsbury, had the downturn not ensued will be conducted. Finally, conclusions of the report will be discussed to reveal if the company was prepared and how well they handled the pressures of the downturn to minimise impact on their financial performance.
Table of Contents
1 Sainsbury Overview 1
1.1 Sainsbury Accounts 1
1.2 Sainsbury Financial Tools 1
2 Sainsbury Ratio Analysis
1. Sainsbury’s Overview
Sainsbury is the UK’s third largest supermarket. Their main competitors are Tesco, Asda and Morrison.
Presently, Sainsbury operates 504 supermarkets across the UK, employing approximately 150,000 employees.
1.1 Sainsbury Accounts
Sainsbury annual fiscal year ends in the third week of March each year. They previously used the UK GAAP accounting format up until 2005 and in 2006 they changed over to the IFRS. Their auditor is PricewaterhouseCoopers. The company uses the going concern concept.
1.2 Sainsbury Financial Tools
The financial tools used are the Income statement, Balance sheet, Cash flow statement and financial ratios. Table 1.2 below shows the important figures extracted from the financial tools.