FINANCE FOR MANAGERS

Finance for Managers



Finance for Managers

Introduction

Sainsbury is a UK-based public limited company. It was founded in 1869, with the founding family retaining a great deal of power and influence over the company. Lord Sainsbury of Preston Candover is president of the company for life, and many other members of the Sainsbury family are on the company's board. Sainsbury Plc jointly owns Sainsbury's Bank with Lloyds Banking Group. The company also has two property joint ventures, with Land Securities Group Plc and The British Land Company Plc (Sainsbury Plc, 2012c).

Sainsbury is primarily a grocery retailer; however, like the other leading players in supermarkets, it also offers an extensive non-food offering. This includes clothing, petrol, pharmacy goods and services, financial services, telecommunications, electrical goods and books, as well as in-store consumer foodservice (Sainsbury Plc, 2012a). The company's network is said to serve over 18 million customers a week, whilst its internet retailing site offers home delivery on groceries to 88% of all UK households. The company plans to extend this coverage in order to cover most of the UK regions. The company's regional share of grocery sales varies, however, with a 25% value share in London, and just a 6% share of sales in Scotland in 2009 (Sainsbury Plc, 2012b).

Finanical Highlights

UK economic climate has been very challenging to Sainsbury, but they managed to post good financial results in 2012. During 2012, market share increased with 16.6% and UK grocery market increased to £138.2 billion. Beside this, Sainsbury profit before tax increased to 7.1% and Earnings per share increased to 28.1 pence i.e. 6% increased from 2011. In 2012, company has proposed dividends of 16.1p that is 6.6% from last year.

In this essay, there will be three sections, in first section the focus would be on Identify and critically assess the sources of long term finance that Sainsbury currently using. In the second section the focus would be on the role of the Management Accountant in Sainsbury and third section would be on Identifying one analytical technique that Sainsbury is using to assist decision making along with any suitable alternative (Sainsbury Annual report, 2012, pp. 68).

Question 2: The Role of Management Accounting in Sainsbury

Management accounting has been considered as essential methods for organization so that they can operate efficiently. The main areas of management accounting are related to the product costs. Hence, the purpose of the paper is to understand the nature and structure of their product costs. At this point, there are several costing methods devised and used in Sainsbury, that depending on the need of the business requirement. Since Sainsbury has been a part of many services, different management accounting methods has been adopted. Each costing method leads to a different unit cost for the same product or object cost. But the most important aspect to consider in choosing one or the other costing method is the quality of the information generated by each.

Scope of the Management Accounting in Sainsbury

This part aims to critically compare and contrast ...