FINANCIAL ANALYSIS

Morrison Plc

Morrison plc

Introduction

The study is related to the Morrison plc; Morrison is engaged in the grocery retailing in the United Kingdom. Through its subsidiaries, Morrison's business activities involve the manufacture and distribution of fresh food products including vegetables; captive insurer; fresh meat processor; product packaging and wholesaler; bakery operations; property development; property investment; and grocery retailing. As of Jan 30 2011, Morrison plc had a total of 439 stores across the United Kingdom.

In the industry, the competitor of Morrison plc is the Tesco, which is engaged in retailing and associated activities. Tesco's core UK segment consists of four different store formats that are express, metro, superstore and extra, as well as one trial format called Homeplus. Tesco's Non-Food segment includes merchandise such as including electrical, home entertainment, clothing, health and beauty, stationery, cook shop and soft furnishings, and seasonal goods such as barbecues and garden furniture in the summer. Company's retailing services segment consists of several operations, including Tesco Personal Finance, Tesco.com and Tesco Telecoms. Tesco's International segment operates in 13 markets outside the U.K., in Europe, Asia, including India, and North America.

Context

This paper focuses on the financial status of Morrison plc. This study will describe the importance of choosing the right strategy. Internal and external analysis of Morrison plc made in order to maintain the status in comparison to the Tesco plc. It includes the model of the strategy in use. The company has become an example in the strategic management because of its successful implementation of the strategy (Aggarwal, 1996, 12-36). Internal and external analysis of Morrison plc shows the set of managerial decisions and actions that determine the long run performance of the corporation. It includes environmental scanning, strategy formulation, strategy implementation and evaluation and control. Morrison plc is one of the leading supermarkets in UK along with the Tesco.

Overview of Morrison

The financial performance of Morrison plc shows that the major portion of the company's assets is not comprised of liabilities; which is a good indication for the company as the company's short term and the long-term debts are decreasing. However, the company's equity seems good or satisfactory but it should be high as compare to the liabilities. In addition to this, the total assets per share and net assets per share reflect that the Morrison plc's assets structure is in good shape which shows that the company can meet its financial obligations that is liabilities is some sort of financial loss occur. In addition to this, past studies states that the financial analysis are to determine whether there are liquidity problems, the study of profitability determines the evolution of the company and return on invested capital, management and analysis of related variables involved in the short-term financing, obtaining rotations and time of collection and payment means.

Key Financials

(In GBP as of 01/30/2011)

Income Statement

Revenue

16,479m

Net Income

632m

EPS - Net Income - Diluted

0.23

Revenue per Share

6.26

Balance Sheet

Total Assets

9,149m

Total Liabilities

3,729m

Shareholders' Equity

5,420m

Total Assets per Share

3.44

Net Assets per Share

2.04

Cash Flows

Cash from Operations

898m

Cash from Investing

-582m

Cash from Financing

-333m

Cash Flow per Share

0.33

Ratios of Morrison

The given ratio analysis of Morrison will provide ...