The Financial Management Policies and Practices of J Sainsbury Plc - Research Paper Example

Good performances that contribute to the success of the business is rewarded at J Sainsbury Plc. As regards distributors and customers, the company operates from a mutual benefit perspective for suppliers and ensures satisfaction to customers. Furthermore, the company is keen to fulfill its social responsibility to the society and environment.The capital structure of J Sainsbury plc is reviewed regularly. In the year 2007, the debt book was refinanced with low-cost property based securities. Consequent to the revision of plans, the company makes significant changes to the structural financing opportunities.

The restructuring of capital is ongoing based on improvements in business cash flows. The performance of the company is fair against the set targets and this indicates the pace with which the company is recovering. Performance improvement of the company is indicated by the 7.3 percent sales growth. The aim of the company to provide good financial returns for investors is supported by the ‘Making Sainsbury’s Great Again’ initiative started in October 2004. The momentum in sales growth has paved way for the company to move from the recovery phase to long-term growth which is envisaged till March 2010 which will be combined by business expansion.

J Sainsbury plc issues financial instrument to gather finance for its functions and to manage currency risks and interest rates related to the sources of finance. Finance is acquired by issuing financial instruments like trade creditors, trade debtors, accruals, and prepayments are also made in the business operation of the company. The financial operations of the company comprise commercial paper, bonds issued in the capital market, bank loans, share capital, notes, leases, and revenue generated by operating subsidiaries.

Borrowing is done by the parent company and provided to subsidiaries on business terms.