You should have used your knowledge of ratio analysis to assess the financial performance of the following 5 supermarkets;

  • Tesco
  • Morrisions
  • Sainsburys
  • B&M
  • Marks and Spencer

For each company you will have found the information that you needed in the Income Statement and The Statement of Financial Position. Remember that these documents will typically be found in the annual reports that are published on the internet. You need to ensure you are using the correct full version of the accounts and not any summaries that they could produce.

The answers to the calculations are shown below, along with the formula you should have been using.

2015 2014
Tesco -3.4% 6.3%
Morrisons 4.5% 6.0%
Sainsburys 5.1% 5.7%
B&M 34.6% 34.0%
Marks and Spencer 38.7% 37.5%

Gross Margin = (Gross Profit / Revenue) x 100

2015 2014
Tesco -9.3% 4.1%
Morrisons -0.53% -4.13
Sainsburys 0.34% 4%
B&M 8.1% 7.6%
Marks and Spencer 6.8% 6.7%

Net Margin = (Net Profit / Revenue) x 100

2015 2014
Tesco 0.5 : 1 0.6 : 1
Morrisons 0.5 : 1 0.5 : 1
Sainsburys 0.7 : 1 0.64 : 1
B&M 1.5 : 1 0.32 : 1
Marks and Spencer 0.69 : 1 0.58 : 1

Current Assets : Current Liabilities

2015 2014
Tesco 0.45 : 1 0.47 : 1
Morrisons
Sainsburys
B&M 0.82 : 1 0.09 : 1
Marks and Spencer 0.31 : 1 0.22 : 1

(Current Assets – Inventory) : Current Liabilities

2015 2014
Tesco
Morrisons
Sainsburys
B&M
Marks and Spencer

Asset Turnover = Revenue / Net Assets

2015 2014
Tesco
Morrisons
Sainsburys
B&M
Marks and Spencer

Payables / cost of sales x 365

2015 2014
Tesco
Morrisons
Sainsburys
B&M
Marks and Spencer

Receivables / revenue x 365

Cost of Sales / Average Inventory Held

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