ANALYTICAL REVIEW

Analytical Review

Morrison's PLC

Introduction

This report aims to analyze the financial position of Morrison PLC. The analysis shall be based on the most recent audited annual financial statements available for Morrison PLC. The scope of analysis shall be limited to the financial strengths and weakness of the company through its financial statements of the last year and previous years.

Research Questions

The research answer the following questions

How effective is Morrison's business and financial strategy over the two year period under review?

How did Morrison fare in comparison to its competition?

Is the company positioned to meet future challenges/changes?

How do Morrison's financial ratios compare to its competitors?

How does the company's year on year performance measure over the 3 year period under review?

Information Gathering and Accounting/ Business techniques

Annual Reports and summary financial statements

The main source of information for this study is the published financial statements of WM Morrisons Supermarket Plc and its main competitors for the two year period. The financial statements form the basis of the figures required to compute financial ratios and carry out trend analysis (Elton, 2003, 56).

Methods used in collecting information

Information was collected mainly from secondary sources. Newspaper articles on Morrisons, Company profile from the London Stock Exchange, competitors and industry reports and industry position of respective retailers, company's annual reports were obtained online.

All the information gathered were obtained from different stakeholders to ensure that that a balance was achieved in terms of opinions and viewpoints. The annual report and financial review were generated internally so we used that to assess the business and financial position of the company from the company's point of view (Copeland, 1988, 97).

As a FTSE 100 company it was important for the author to understand the company's position from the point of view of the London Stock Exchange, the Media and market watchers. This was instructive in coming to a conclusion about the company's business and financial performance as well as making predictions about its future outlook. These sources give insight into Morrison's market share, industry position, market capitalisation, company strength, customer satisfaction, ethical issues amongst others (Thomas, 2001,143).

Limitations of information gathering

The main limitation of information gathering is that 100% accuracy cannot be guaranteed. There is a small chance that some information gathered are inaccurate or that the source is unreliable. The chance of this occurring is however insignificant. By and large information obtained may be considered to be significantly accurate (Vincent, 2002,432).

Another limitation of information gathering can be information overload. With the advent of the internet so much information is available online. This presents many authors with the challenge of sifting through the vast information available and extracting only the ones that are relevant and useful to the subject of the research project (Linda, 2008,23).

Finally, information available are substantially historical in nature, hence some situations may have been overtaken by events. One of the financial measurements that will be evaluated in the course of this research project is the trend analysis. This measurement is useful in projecting the future outlook of a ...