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Essay / Research Paper Abstract
This 9 page paper uses a range of 10 ratios to examine the performance of Tesco and Sainsbury’s using their 2004 and 2005 annual group accounts figures, including financial performance, financial structure, liquidity ratios and working capital ratios. The bibliography cites 9 sources.
Page Count:
9 pages (~225 words per page)
File: TS14_TEtescosain.rtf
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Unformatted sample text from the term paper:
CAPITAL RATIOS 8 5.1 Debtors Collection Period 8 5.2 Stockholding period 8 5.3 Creditors Payment Period 9 5.4 Working Capital Cycle 10 1. Introduction The supermarket industry in the UK is very
competitive, Tesco has emerged as the dominant player with the development of competitive advantages such as the use of market information and market data and the way customer information has
been collected. However, this was not always the case, a decade ago Sainsbury was the leader and the level of the lead was much narrower. Now the tope three competitors,
Tesco, Sainsbury and Asda control more than 60% of the market (Euromonitor, 2005) Even were market share is lost the growth of the market size has increased from ?59.9 billon
in 1990 to ?80.4 billion in 2002 can indicate a large increase in sales (Hemple, 2002). With this increase in market size and the high level of concentration we would
expect two companies at the top of the industry to have similar performance figures and efficiencies, but that largest to have the price advantage (Thompson, 2005). To assess this we
can consider the way that Tesco and Sainsburys have performed in 2004 and 2005. In this paper all amounts, unless otherwise states are in millions and the currency is Stirling.
2. Financial Performance. 2.1 Gross Profit Margin The gross profit is the profit after only the cost of goods has been taken off of the income, with the gross profit
margin is the gross profit shown as a percentage of the revenue. Tesco Sainsbury 2005 2004 2005 2004 Income 33,974 30,814 15,409 17,141 Cost of goods sold
31,271 28,405 14,726 15,658 Gross profit 2,703.0 2,409.0 683.0 1,483.0 Gross profit margin 7.96% 7.82% 4.43% 8.65% If we look at the Tesco level there is a slight improvement in
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