Evaluate Sainsbury grocery retailers using two valuation models

Evaluate Sainsbury grocery retailers using two valuation models Essay example
Masters
Essay
Finance & Accounting
Pages 12 (3012 words)
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Topic: Evaluate Sainsbury grocery retailers using two valuation models: The purpose of this report is to Sainsbury's valuation analysis using the models of dividend growth and cash flow. This information is taken from the annual report of the Sainsbury grocery retailer…

Introduction

The company also has interests in banking and property. A.First valuation model is: Forecast dividend growth using financial statement information to arrive at the forecast or to adjust and validate a forecast based on historical trend data. A dividend is a payment of part of the company’s profit to shareholders. The Board of directors have agreed to pay its shareholders a final dividend of 10.8 percent per share (2009/10: 10.2 pence), which was paid on 15 July 2011 to shareholders on the Register of Members at the close of business. The dividend is covered by the underlying earnings. Dividend will increase only if the shares are high. Sainsbury’s has increased its market share in a crucial economic environment. The grocery has concentrated more on the supermarket sale. Net profit is increasing which means there is higher sale through good sales forecaste without increasing the cost. From the financial statement it is clear that the business is able to maintain a dividend payment and the dividend per share is increasing yearly from 7.8 %- 8%. This shows that the dividend paying by the company to its shareholders is increasing. The earning per share has also increased tremendously. The business can take a good place in the market by increasing the shares. The company’s profit and sale is increasing without increase in the cost. ...
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