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Commentaries on a company's performance over last 2 years - Assignment Example
Finance & Accounting
Pages 3 (753 words)
Morrison Supermarket PLC: Performance in 2011-12 and 2012-13 Morrison Supermarkets A Morrison supermarket PLC is the fourth largest retailer in U.K. with annual turnover more than ?18 bn. This paper analyses its performance in the financial years 2011-12 and 2012-13…
This means that the company’s inventory has been higher than the sales in the year 2012-13. This is not favorable position since inventory piling up indicates that money is tied up in inventory. Then, receivable days have been calculated, and this has reduced in 2012-13 from the previous year. This means that the company is in good position in respect to its debtors since lower receivable days indicates that the company takes less time to collect the receivable amounts. By faster receive of due, collection related problems get reduced, and also the company has improved its profitability and rate of return on investment by better management of funds receivable. Finally, payable days have been calculated which has increased in 2012-13 from the previous year. This means compared to previous year, Morrison has been delaying payment to creditors to conserve cash. This can happen because Morrison has good terms with vendors. Compared to the previous year, Morrison has been holding on to its cash for a longer period in 2012-13. In this section, horizontal analysis is done by measuring the amounts receivable and payable in the two concerned financial years. Amount receivable has reduced in 2012-13 which means that Morrison has shown a better performance in collecting debts this year. This means increased cash which can be used for operational purposes. ...
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