Boots Plc and Sainsbury Plc Essay Example | Topics and Well Written Essays - 2000 words

Boots Plc and Sainsbury Plc - Essay ExampleAt the terminus of the tale, the financial and non-financial factors that are critical to the future performance of both(prenominal) the companies are presented. Both the companies, Boots and Sainsbury are known names in retail industry. United Kingdom is the centre of the companies major business operations and although both the companies run their business outside the country also, but most of the companies sales are from the UK segment.The Boots Plc Groups major activities include retailing of chemists merchandise, the provision of opticians and other healthcare services, the development, manufacture and marketing of healthcare and consumer products. The themes major business segments include Boots The Chemists, Boots Opticians, Boots Healthcare International and Boots Retail International (Boots Plc Annual Reports, accessed 23/11/2005) Boots the Chemist operates over 1,400 stores, where in nearly every store there is a chemist to of fer guidance and help on healthcare matters. J Sainsbury Plc is a leading UK food retailer with interests in financial services. It consists of Sainsburys Supermarkets, Sainsburys Local, Bells Stores, Jacksons Stores and JB Beaumont, Sainsburys to You and Sainsburys Bank. It employs 153,000 people A large Sainsburys Supermarket offers around 30,000 products, 50% of these are Sainsburys own check including fresh produce. In addition to a wide range of quality food and grocery products, legion(predicate) stores offer delicatessen, meat and fish counters, pharmacies, coffee shops, restaurants and petrol stations (Company Overview, accessed 24/11/2005)The comparison and abstract of these two companies financial performance and position has been broken down into sections so as to be useable for various users of the companys financial statements. It will be of assistance to the companies management in assessing their performance over the novel year and making plans to overcome any fu ture risks and failures. The companies investors would find this comparison beneficial in evidence to decide on which company to choose for investment and which company offers better investment potential. The lenders would benefit from this report in terms of being aware of the companies solvency and liquidity position. PART BFINANCIAL ANALYSISdepth psychology From Managements ViewpointA companys management is concerned with the financial results of its performance over the year that shows the managements capability and might to generate sales and profit for the business effectively. The following ratios would be helpful in analysing both the companies from the managements point of viewReturn on Capital EmployedBoots PlcSainsbury Plc18.83%1.64%The Return on Capital Employed ratio shows how oft a company earns on the investment made in the assets. Boots Plcs return on capital employ ratio reveals a much profitable snapshot of the companys performance whereas Sainsbury Plcs fina ncial results exhibit a much weaker position of the company in utilising its assets towards profit generation as compared to Boots Plc. realize Profit RatioBoots PlcSainsbury Plc46.13%4.12%The Gross Profit ratio analyses the companys profit perimeter before accounting for various operating costs. Therefore, it represents the profit margin after accounting for cost of sales. Here, Boots Plcs financial results show that company is getting more profit on its sales after accounting