Financial Analysis for Morrison
Profitability ratios
Return on caplital employed:
Morison’s return on invested capital employed has declined from 11.7 to 10.58 (2008 to 2012). Compareatively Sainbury’s, Tesco’s and other grocery retailer, they all get decreased. Return on capital employed is an indication of the percentage of profit made on capital invested. Hence, a higher value of the ROCE, the better use of capital and vice versa with lover value. Morrison’s average ROCE from 2008 to 2012 is 10.5, higher than saintburry with 7.83% but lower than tesco with 10.8%. this somehow shows Morrison has done fairly well in managing their capital.
Gross profit margin
Morrison’s gross profit margin (GPM) was increased from 6.31% to 6.89%. The gross profit margin is an indication of profit margin achieved by Morrison;s on its sales revenue after deducting direct cost. However, Sainsbury’s GPM was reduced form 5.62 to 5.39, and the industry was the same decrease from 2288% to 21.65%. this shows that Morriosn;s has control their cost more stringent than other competitors.
Net profit margin:
In general, net profit margin has increased from 3.91% to 4.27% . This can be explained by the reduction of administrative expenses due to the improvement of waste minimization and efficicency maximization in individual cost centres
Explaination:
Profitability of Morrison has increased by years due to its market expansion from 11.9% in 2007 to 12.6% in 2010 with space growth of 4%. However, from 2011 until now, the retail grocery volumes were flat due to inflation approximately 3.2% this year. Especially, the depreciation of the Sterling unhedged imports reduce the british super market;s profict margin. In addition, more pressure on the inflation of food (4.2% in January). Also, Morison is not as strong as competitor in groceries online section upt from 10% in last 4 years ago.
(because I don’t have figure from thonpson so pls help me download them to analyze) liquidity ratio | current ratio |
Return on caplital employed:
Morison’s return on invested capital employed has declined from 11.7 to 10.58 (2008 to 2012). Compareatively Sainbury’s, Tesco’s and other grocery retailer, they all get decreased. Return on capital employed is an indication of the percentage of profit made on capital invested. Hence, a higher value of the ROCE, the better use of capital and vice versa with lover value. Morrison’s average ROCE from 2008 to 2012 is 10.5, higher than saintburry with 7.83% but lower than tesco with 10.8%. this somehow shows Morrison has done fairly well in managing their capital.
Gross profit margin
Morrison’s gross profit margin (GPM) was increased from 6.31% to 6.89%. The gross profit margin is an indication of profit margin achieved by Morrison;s on its sales revenue after deducting direct cost. However, Sainsbury’s GPM was reduced form 5.62 to 5.39, and the industry was the same decrease from 2288% to 21.65%. this shows that Morriosn;s has control their cost more stringent than other competitors.
Net profit margin:
In general, net profit margin has increased from 3.91% to 4.27% . This can be explained by the reduction of administrative expenses due to the improvement of waste minimization and efficicency maximization in individual cost centres
Explaination:
Profitability of Morrison has increased by years due to its market expansion from 11.9% in 2007 to 12.6% in 2010 with space growth of 4%. However, from 2011 until now, the retail grocery volumes were flat due to inflation approximately 3.2% this year. Especially, the depreciation of the Sterling unhedged imports reduce the british super market;s profict margin. In addition, more pressure on the inflation of food (4.2% in January). Also, Morison is not as strong as competitor in groceries online section upt from 10% in last 4 years ago.
(because I don’t have figure from thonpson so pls help me download them to analyze) liquidity ratio | current ratio |