Financial resource management Assignment Example | Topics and Well Written Essays - 2000 words

Financial resource management - Assignment Example From the year 2010 the company has focused in launching range of its venture brands. For the first half of 2011 the company profits were ?1.9 billion, there followed a period of low growth of sales attributed by the changing consumer behavior switching to budget rivals. The market in which this company operates is considered to be competitive. Its major competitors being Asda, Sainsbury, the Co-operative Food Plc. and Morrison’s and as by 2011 the market share standings in the context of United Kingdom were as follows (Schuh 2012). Tesco Company 30.6%, Asda Company 17.3, Sainsbury plc. 16.6% and the Co-operative Food Plc. 7.3%. Tesco plc. Financial performance The financial year for Tesco comes to an end on 27 February, thus the financial year 2010 covers 2010/2011. In this financial year there had been a registered total sales increasing by 8.3% in its first half and 8.8% in the third quarter (Infinancials 2012). For the case of international sales it increased by 15.7%. The return on equity has also increased significantly putting into consideration the impacts of the financial crisis. The company has engaged on big expansive programs notably on international markets using both retained earnings and debt financing for these projects. As at August 2010 the company balance sheet indicated a short-term debt of ?1.6 billion, ?10.5 billion long term debts with an offset of ?1.977 billion cash position which gives a net debt of ?10.1 billion (Schuh 2012). Thus the company is committed in paying down the debts. The company has greatly diversified its property assets having a gained greatly in comparison with its book value. Attributing to this is that it has provided a buffer to the current company leverage position. Better financial position of this company is attributed by the predictable and reliable earnings as well as profitability. The major products that the company is consumer staples and personal goods and the implication of recession may not signifi cantly affect its sales and profits respectively. J Sainsbury plc. J Sainsbury plc is the parent company of a chain of supermarkets in United Kingdom also referred to as Sainsbury’s. The company is the third largest chain of supermarkets thus considered to have a significant market share in the United Kingdom domestic market. This company currently operates 1012 convenience stores, supermarkets and hypermarkets and a bank as well which sells financial services. In UK market the company is ranked third as it offers high quality grocery compared to its rivals. The company controls a market share of 16.4% coming fourth after its competitors Morrison’s, Asda’s and Tesco respectively (Infinancials 2012). Subsidiary businesses include Sainsbury’s local, Sainsbury’s online, Sainsbury’s Active Kids, Sainsbury’s Local and Sainsbury’s Bank. J Sainsbury plc. Financial performance For the past years the financial performance of this compan y has been characterized with increased turnover. From 1990 to 2010 the turnover has increased significantly from ?6.9 billion to ?21.4 billion with a fall in 2005 when the company way in the transition of restructuring itself (Schuh 2012). It is notable that for most of the years the company had a pre-tax profit of between ?500 million to ?700 million. The earnings per share have also increased significantly except in 2005 and 2006 (Infinancials 201