FINANCE

Finance

Finance

Introduction of the Company

I have selected J. Sainsbury Plc J. Sainsbury is committed in the procedure of nourishment and food shop retailing chains and economic services. Apart from nourishment and food shop goods, Co.'s shops offer beef and fish counters, complementary non-food goods for example apparel and homeward, pharmacies, coffee stores, bistros and gasoline stations. Co. furthermore functions banks. The banks' merchandise portfolio encompasses vehicle protection, life cover, dwelling protection, journey protection, favourite protection, Visa borrowing cards, Child Trust Fund, internet savings account, instant get access to savings account, direct hoarder account, individual borrowings and a vehicle buy scheme. Co. furthermore boasts internet-based dwelling consignment service.

Part 2:

Ratio

 

2009

%

2010

Best or Worse

Return on Equity

Profit after tax

0.135535175

 

0.082724627

Worse

 

equity

 

 

 

 

Dividend Yeild

Dividend per share

1.818181818

 

1.833333333

Best

 

Share price

 

 

 

 

Dividend Cover

Profit after tax

174.125

 

137.3529412

Worse

 

dividend

 

 

 

 

Earnings per Share

Profit after tax

0.002532727

 

0.002594444

Best

 

Number of share

 

 

 

 

Price Earnings ratio

Share price

35529.71576

 

25695.93148

Worse

 

EPS

 

 

 

 

Earnings Yield

EPS

0.909

 

0.00089

Worse

 

Share price

 

 

 

 

Return on Total Assets

Profit before interest

0.099663274

 

0.100732601

Best

 

Total assets

 

 

 

 

Sales per Employee

Sales revenue

0.088443665

 

0.091225619

Best

 

Average no of employees

 

 

 

 

No credit period

Current assets-stock

385.6666

 

360.1

Worse

 

Average daily cash usage

 

 

 

 

Current ratio

current assets

0.735544218

 

0.820075976

Best

 

current liabilities

 

 

 

 

Quick Ratio

current assets - stock

0.368941327

 

0.414527455

Best

 

current liabilities

 

 

 

 

Gearing

Debt

0.174963253

 

0.200631032

Best

 

Equity + debt

 

 

 

 

Debt to equity

Debt

0.212067225

 

0.250986766

Best

 

Equity

 

 

 

 

 

Operating profit

0.137538312

 

0.101995775

Best

 

____________

 

 

 

 

 

Total assets - current liabilities

 

 

 

 

 

Operating profit

0.065249

 

0.051617947

Worse

 

sales

 

 

 

 

 

sales

2.107899136

 

1.975975029

Worse

 

Total assets - current liabilities

 

 

 

 

 

sales

1.959465147

 

1.921334192

Worse

 

Fixed assets

 

 

 

 

Stock

Stock X 365

31.41244136

 

30.65011679

Best

 

Cost of sales

 

 

 

 

Trade Debtors

Debtors X365

0.644096362

 

8.101145647

Best

 

sales

 

 

 

 

Trade Creditors

Creditors X365

75.35707156

 

1.725032178

Best

 

Cost of sales

 

 

 

 

 

 

 

 

 

 

Part 3:

From the latest earnings declaration, next are the company's short period liabilities:

Trade payables 1,728,000  

Other payables 508,000  

Accruals & deferred income   252,000  

Trade & other payables 2,488,000  

B portions liability -   

Borrowings    154,000  

Derivative economic instruments 56,000   

Taxes payable 202,000  

Provisions    19,000   

Current liabilities 2,919,000

 

Long Term Liabilities

Other payables 92,000   

Secured loans -   

Obligations under investment leases -     

Borrowings    2,177,000

Derivative economic instruments 8,000    

Deferred earnings levy liability     95,000   

Provisions    57,000     

 Retirement advantage obligations   309,000  

Non-current liabilities 2,738,000

 

B) Equity

Debt Ratio= Total Liabilities              Total Liabilities + Equity

          5,657,000             5,657,000 + 4,376,000

          = 0.56383933

 

Debt to Equity Ratio= Total Liabilities

                   Total Equity

                   = 5,657,000

              4,376,000

                   = 1.29273309

Debt Ratio=Short Term Liabilities      Short Term Liabilities+ Equity

          =2,919,000          2,919,000+4,376,000

          =0.515997879

Debt to Equity Ratio= Short Term Liabilities

                   Equity

                   = 2,919,000

                      4,376,000

                   =0.667047532

Debt Ratio= Long Term Liabilities     Long Term Liabilities+ Equity

          =2,738,000         2,738,000+ 4,376,000

          =0.384874895

Debt to Equity Ratio= Long Term Liabilities

                   Equity

                   =2,738,000

                    4,376,000

              = 0.625686

 

Recommendations

The debt-equity ratio is another leverage ratio that compares a company's total liabilities to its total shareholders' equity. This is an estimation of how much suppliers, lenders, creditors and obligors have pledged to the business versus what the shareholders have committed. To a large stage, the debt-equity ratio presents another vantage issue on a company's leverage place, in this case, matching total liabilities to shareholders' equity, as are against to total assets in the liability ratio. Similar to the liability ratio, a smaller the percentage entails that a business is utilising less leverage and has a more powerful equity position. The Debt to Equity Ratio assesses how much cash a business should securely be adept to scrounge over long time span of time. It does this by matching the company's total liability (including short period and long period obligations) and splitting up it by the allowance of owner's equity ...