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Financial analysis of Morrison’s and comparison with Tesco - Coursework Example
Finance & Accounting
Pages 9 (2259 words)
One of the most famous ways to analyze the performance of an organization is to analyze its financial statements and calculate various financial ratios.The ratios can be analyzed over a period of time and compared to other companies in the same industry…
Ratio analysis of an organization presents facts on a comparative basis and enables the drawing of inference regarding the performance of a firm (Khan & Jain, 2006). This analysis gives a useful indication of the performance of the organization. Financial ratios are often used by shareholders, bankers, trade creditors, analysts, management and the general public at large to measure the performance of the company in various aspects such as liquidity, profitability, debt and market position (Stoltz et al., 2007). However, these ratios often should be analyzed keeping in mind the accounting policies and the principles used by companies and is dependent on the industries under consideration (Siegel and Shim, 2006). The objective of this report is to analyze the performance of Morrison’s. In order to do this, ratios will be calculated for the company over a period of two years: 2009 and 2010. The ratios will be compared to Tesco which is a leading competitor in the same industry. Four categories of ratio will be calculated for both the companies: 1. Profitability 2. Liquidity 3. Efficiency 4. Gearing ratios Analysis Profitability Ratios ...
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