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Evaluate Sainsbury plc's financial strategy - Essay Example

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Evaluate Sainsbury plc's financial strategy

The same financial statements easily encourage the current and future stock investors to put more funds into the Sainsbury Plc coffers. Evaluation of Sainsbury plc’s financial strategy. 1. Evaluation of Sainsbury’s choice of sources of funds using appropriate theory: Accounting theory dictates that there are several sources of funds (Nikolai 222). In layman’s terms, the sources of funds include all amounts that flow into the coffers of the company, Sainsbury Plc. The sources of funds include the amounts paid by the customers for purchasing Sainsbury Plc’s products and services. The sources of funds include the amounts received from loans and other liabilities. The sources of funds include the amounts invested by the Sainsbury Plc’s current and future stock investors. The other sources of funds include the amount received for selling the company’s assets. The Sainsbury Plc assets include all other non-cash and cash equivalent properties. The noncurrent assets include the property, plant, and equipment, intangible assets, inventories, and derivative financial instruments (Sainsbury 51). Sainsbury’s acquires several sources of funds. ...
182 m in 2012 (Sainsbury 98), ? 105 m in 2011 (Sainsbury 98), and ? 101 during 2010 (Sainsbury 98). The company also generated cash inflows from proceeds from the disposals of the J Sainsbury Plc’s property, plant, and equipment activities amounting to ?314 m for 2012 (Sainsbury 71), ?282 m for 2011 (Sainsbury 71), and ?139 m for 2010 (Sainsbury 53). The disposals are classified as sources of funds under the investing activities. The company also generated cash inflows from disposal of 2012 financial assets ? 40 m. The also generated cash inflows from interest received ? 18 m during 2012 (Sainsbury 71), ? 19 m during 2011 (Sainsbury 71), and ? 18 m during 2010. The company also generated cash inflows from dividends received ? 1 m during 2011 and ? 2m during 2010 (Sainsbury 53). Further, the company generated cash inflows from the proceeds of issuance of ordinary shares of stocks distributed to the company’s current and new stock investors. The stock investments amounted to ? 14 m during 2012 (Sainsbury 71), ? 17 m during 2011 (Sainsbury 71), and ?250 m during 2010 (Sainsbury 53). Furthermore, the company generated cash inflows from the proceeds of long term borrowing (Fortune 22). The long term borrowings include long term bank loans. The loans amounted to ? 391 m during 2012 (Sainsbury 71), ? 45 m during 2011 (Sainsbury 71), and ? 235 m during 2010 (Sainsbury 53). 2. Evaluation of Sainsbury’s dividend policy by using appropriate theory: Sainsbury Plc distributed dividends during the 2010 to 2012 accounting periods. The stockholders generate dividends from their stock investments (Needles 639). The company paid ? 285 m dividends to its stockholders on record during 2012, ? 269 m during 2011, and ? 241 m during ...Show more

Summary

Sainsbury Plc Subject: Professor: November 20, 2012 Sainsbury Plc is one of the top grocery store chains of stores within the confines of the United Kingdom. The research delves on the company’s historical financial statements. The company’s head office is strategically located in Holborn, United Kingdom…
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