Financial analysis of Sainsbury plc and Tesco Plc Essay

Financial analysis of Sainsbury plc and Tesco Plc - Essay Example The paper will highlight the Key features and the current strategies directed by the companies followed by the Calculation of financial ratios for each company, and Compare with earlier years, that allow to judge the financial performance and position for the company, and to interpret if the company's assessment of its own performance as shown in the Financial Highlights and Chairman's Statement a good representation. Then comparison of the two companies together, followed by comparison with the industrial average. The basic structure of this research essay will be divided to five sections: Firstly: Brief definitions of the company’s activities and their major business, when they operate as well as the current strategies directed by the company and also why choose these two firms; Secondly: The calculation of the financial ratios; Thirdly: Financial Analysis; Fourthly: the limitations of ratios; Finally summary and conclusions. This research essay will also make a research int o thedifferent type of stock price prediction models and will select the time series model to predict the stock price for two years and then compare them with the actual stock price of the above companies and present the reasearch findings and will make a detailed analysis of the same.A intercompany analysis between Tesco and Sainsbury will be carried over and also a comparison with the industry’s average will also carried over to know how these companies are performing as compared to the industry’s average. 1. Short Narration of the Activities of the Companies Sainsbury Plc Sainsbury being a supermarket chain, J. Sainsbury Plc is a renowned retailer operating from London and also ventured into construction activities, real estate and owning a commercial bank in UK. Established in the year 1869, Sainsbury is having around 337 convenience stores and 557 Supermarkets, and Sainsbury owns a floor space ranging from 15,000 to in excess of 40,000 square feet and has supermar ket branches throughout the UK and in the UK and about forty percent of these products are own brands of Sainsbury. Salisbury is having more than 5000 own brands in health and food sector. Apart from the grocery and food products, the majority of the Sainsbury stores offers fish and meat counters, a delicatessen, bread baked on the premises of Sainsbury, coffee shops, pharmacies, gas stations and restaurants. By sales value, Salisbury is the largest UK retailer of Fairtrade products as it sourced ethically and responsibly around ?280 million in the year 2011 alone. Under the brand names of Jackson’s and Bells Stores, Sainsbury manages its convenience stores and also offers a variety of the local brand mainly through the Shell franchise. Sainsbury also markets its own brands along with specialty and ethnic food products like Indian, American, Asian, Italian, low-priced products and organic products. Sainsbury also added house wares and clothing to its retail list of products. Sainsbury also owns a bank in collaboration with the Bank of Scotland, which was the first-ever bank owned by a supermarket in the UK, and its clients numbers have surpassed more than two million numbers as of date. With regard to land associated with the Sainsbury Supermarkets, it is being managed by Sainsbury Property Company and JS Developments, a Sainsbury’s real estate development company. State the different sectors in which saninsbury deals, % revenue In 2006, Sainsbury acquired 4 stores from Somerfield. (Plunkett 2008). As of 2011, Sainsbury is having in a week around 21 million customer transactions and have a market share around 16% in the UK. Sainsbury is offering employment to more than 150,000 individuals. During the year 2011, Sainsbury opened extra 47 convinient stores, and it had