Financial Analysis of Three Supermarket Chains Essay

Introduction The purpose of this report is to undertake financial analysis of the position of the three major supermarket chains (Tesco plc, Morrison plc and Sainsbury plc) in the UK, using the financial tools such as Horizontal and Vertical Analysis and Ratio Analysis. The calculations done are considering the figures from the income statement and balance sheet of these three companies for the last 2 years (2008 2007). Doing these calculations is an effort to find out the current position and if any forecast on their performance. Tesco Plc *Interpreting the Horizontal and Vertical *Analysis The balance sheet’s horizontal analysis reveals the first worrying statistics about the company- the fact that stock level has increased by†¦show more content†¦This clearly shows that minimum resources were applied to credit control. Efficient businesses collect there debt quickly (Black, 2000). From the trend analysis of the earnings per share one can see that earning per share has increased over period of 5 years and so has dividend per share. It would be interesting to see that where the share price value of Tesco plc stands with that of the share markets in last 5 years. The following graph illustrates the share price value of Tesco plc in comparison with FTSE all shares in the last five years. It can be seen that apart from the year 2006, the share price value of Tesco has always been above the FTSE all share market index. {draw:frame} (www.hemscott.com) Morrison Plc The Company was founded by William Morrison in 1899, initially as an egg and butter merchant in Rawson Market, Bradford, England operating under the name of Wm Morrison (Provisions) Limited. At that time Morrisons for many years focused only in north of England. However after acquitting Safeway group of stores in 2004, the company started to expand southwards. Today it has a total of 375 superstores across UK and is fourth largest in the chain of Supermarkets in the United Kingd om. (www.morrisons.co.uk) *Interpreting the Horizontal and Vertical *Analysis Interpreting the Ratio Analysis Ratio Analysis Profitability Ratios Return on capitalShow MoreRelatedWalmart vs Tesco1000 Words   |  4 PagesWal-Mart and Tesco | A Comparative Analysis | | Table of Contents Background and History 2 Culture of Organization 3 Core Values for Wal-Mart 3 Core Values for Tesco 3 Two Powerhouses Globally 4 Existence in current markets 4 Expansion 4 Industry Analysis 4 Strengths 4 Weakness 4 Opportunities 4 Threats 4 Porter’s Five Forces for Wal-Mart 4 Porter’s Five Forces Model for Tesco 5 Financial Analysis 5 Balance Sheet 5 Income Statement 5 Strategy 6 MissionRead MoreThe Grocery And Supermarket Chain Essay1643 Words   |  7 Pagescustomers’ needs (Geunes 2004, p.218). The grocery and supermarket industry develops quite fast in the UK for the past few decades. 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