J Sainsbury is involved in business of retailing, financial services, and property investment businesses in the UK. The company's retail stores and website offers a range of food and non-food products primarily under the Sainsbury's brand. In addition, it provides banking services like insurance, credit cards, savings products, and loans. The retailing segment of the company serves over 19 million customers weekly through a network of 872 stores including 335 convenience stores and 537 supermarkets. The supermarkets offer 30,000 varieties of food products, non-food products and services. The segment also operates internet-based delivery website, Sainsbury's online. The website reaches out to nearly 90% of UK households. Over 8,000 non-food products were also incorporated in the website recently.
Financial services segment consists of the operations of Sainsbury's Bank (trading as Sainsbury Finance). The bank is a joint venture between J Sainsbury and Lloyds Banking Group. According to the company's annual report, its segment revenues solely comprise of retail business and hence the financial reporting is based on one segment.
Ratio Analysis
J. Sainsbury PLC (NBB: JSAI Y)
Ratio Analysis
Profitability Ratios
03/19/2011
03/20/2010
03/21/2009
03/22/2008
03/24/2007
ROA % (Net)
5.77
5.62
2.88
3.35
2.92
ROE % (Net)
12.35
12.56
6.22
7.11
7.91
ROI % (Operating)
9.78
9.71
8.92
7.19
7.68
EBITDA Margin %
4.3
3.61
3.87
3.45
2.78
Calculated Tax Rate %
24.38
24.87
30.68
31.19
32.08
Liquidity Ratios
03/19/2011
03/20/2010
03/21/2009
03/22/2008
03/24/2007
Quick Ratio
0.29
0.38
0.28
0.36
0.48
Current Ratio
0.58
0.66
0.55
0.66
0.71
Net Current Assets % TA
(10.71)
(8.66)
(13.24)
(8.73)
(8.16)
Debt Management
03/19/2011
03/20/2010
03/21/2009
03/22/2008
03/24/2007
LT Debt to Equity
0.43
0.47
0.5
0.42
0.48
Total Debt to Equity
0.44
0.49
0.53
0.45
0.57
Interest Coverage
6.14
7.42
4.85
4.72
65.71
Asset Management
03/19/2011
03/20/2010
03/21/2009
03/22/2008
03/24/2007
Total Asset Turnover
1.9
1.92
1.88
1.82
1.54
Receivables Turnover
75.84
97.65
94.58
88.76
72.72
Inventory Turnover
26.34
27.15
26.09
26.49
27.41
Accounts Payable Turnover
11.7
11.41
11.05
10.49
11.01
Property Plant & Equip Turnover
2.49
2.5
2.49
2.45
2.42
Cash & Equivalents Turnover
31.63
27.35
28.18
19.37
15.95
Per Share
03/19/2011
03/20/2010
03/21/2009
03/22/2008
03/24/2007
Cash Flow per Share
0.46
0.55
0.53
0.47
0.44
Book Value per Share
2.9
2.67
2.49
2.82
2.51
The ratios are calculated for 5 year. The interpretations of different ratios of Sainsbury are as follows
Current ratio: the current ratio of the company has decreased from .66 to .58 which is a weakness for Sainsbury (Charles ,2006, 67).
Acid test ratio: the acid test ratio of the company has decreased from .66 to .58. Again it's a weakness, its means Sainsbury liquidity position is shaking.
Average collection period: the average collection period of the company has also changed from 97 to 75 which is a positive improvement and can be considered as strength).
Debt ratio: the debt ratio of the company has decreased from .47 to .43 which is a positive sign for the company that company's debt is reducing (strength).
Interest Coverage ratio: Interest coverage ratio has also been decreased from 7.42 to 6.14 which is a good sign, the reflection of which can be observed in debt ratio.
Operating profit margin: the operating profit margin of the company has significantly Increased from 3.61% to 4.3 (strength).
Cash flow per share: the cash flow per share ratio ...