There a several techniques that can be used to evaluate the performance of a firm, but one of the most popular and effective techniques is the use of ratio analysis. Ratio analysis is relative simple to apply for any person if they know the formulas for the different financial ratios. The use of ratio analysis does have its limitations because it does not consider other qualitative factors that may affect the financial results of a company such as a pending lawsuit. This report is going to compare two public companies based in the United Kingdom. Ratio analysis is going to be the primary tool to compare the financial results of both companies. The two companies that are going to be compared are GlaxoSmithKline Plc and J Sainbury Plc. An inherent limitation of the use of ratio analysis to compare the results of these two companies is that the two companies participate in different industries. Different industries on many occasions have different expectations and industry standards, thus a ratio that might seem bad for a company might actually be good in comparison with the results of similar companies that participate in the same industry. Company Profile: GlaxoSmithKline Plc GlaxoSmithKline is a multinational organization dedicated to manufacturing pharmaceutical and healthcare products. The company’s headquarters is in the United Kingdom, but the firm has offices in over 100 countries across the world including major research centers in the United Kingdom, United States, Belgium, and China (Gsk). The firm is dedicated to helping the healthcare industry evidenced by the fact that the company is one of the few firms in the world that currently is developing both medicines and vaccines to battle the three diseases that the World Health Organization considers a top priority. These diseases are HIV/Aids, tuberculosis, and malaria. The scope of the medicines manufactured and developed by the company includes targeting treatment for diseases such as cancer. The company also develops medicines for diseases such as asthma, mental disorders, and cardiovascular conditions. The firm also makes a lot of money by selling a lot of branded over the counter drugs, skincare, nutritional drinks and hygiene products. Some of the leading brand products the firm manufactures include Sensodyne, Nicorette, and Panadol. The current value of the company’s common stock is $43.98 and the market capitalization of the company is $111.6 billion dollars (Yahoo). The firm is traded under the symbol GSK. During the past 52 weeks the lowest the price the common stock was traded is $34.85 and the highest price was $42.42. Company Profile: J Sainsbury Plc J Sainsbury Plc was founded in 1869. The company is located in the United Kingdom. The company operates one of the largest supermarket chains in the United Kingdom. The firm has 557 supermarkets, 337 convenience stores, a bank, and two property joint ventures (Sainsbury). The company’s market share in the UK supermarket industry is 16% evidenced by the fact the company serves 16 million customers weekly. Sainsbury is a very innovative company. One of its most innovative services is its online shopping service that is available to 93% of the UK households. The organization has over 150,000 employees. The common stock of the firm is traded in the open market under the symbol SBRY. The current market price of the common stock of Sainsbury is $312.40 and the market capitalization of the firm is $5.83 billion (Yahoo). During the past 52 weeks the lowest the SBRY common stocks have traded at was $307.20 and the highest p
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