Posted: February 3rd, 2015

Financial Performance Analysis for Morrisons Supermarket

Paper, Order, or Assignment Requirements

 

 

Financial Performance Analysis

 

Select one company from the FTSE100 Index and access its Annual Report and Accounts for 2013 (and possibly 2012) . In most instances, you should be able to download it from the company’s website (look for a section called Investor Centre/Investor Relations or something similar on the site). If you prefer to choose a company listed in another major stock market, that is acceptable as long as the complete annual report is available in English.

 

Requirement:

 

You are working for an investment bank and you were asked to prepare a report for your boss to understand the financial performance of your chosen company in 2013. Potentially, your report will then be sent to clients.

 

In your report you need to address the following requirements:

 

1. A large number of companies currently claim “Maximization of Shareholder Value” as their main objective. Discuss whether this is an appropriate objective for companies to pursue.

 

1. Discuss the strengths and weaknesses of ratio analysis in determining the financial performance of a company.

 

1. Calculate for 2011, 2012 and 2013 the ratios you believe to be relevant to analyze the financial performance of your chosen companies.

 

1. Based on these ratios and the narrative information in the Annual Report, prepare a brief discussion and analysis of your chosen company’s performance, including identification of:
   • areas of good performance;
   • areas of weak performance;
   • key areas of activity or exceptional items relevant to judge the company’s performance but not reflected in the ratio analysis you conducted;
   • additional information (not contained in the annual report) that would improve your analysis and in what way it would be improved.

 

Notes

 

1. Maximum length 2,500 words. Detailed numerical analysis can be included in appendices to the report, which do not count towards the total words. However you should try to be concise. The report is being written for a busy executive who has limits on her time.

 

2. Summarise your broad conclusions and findings at the front of your report in an executive summary (this is not included in the word count).

 

3. Marks will be awarded under the following broad headings.

	%
Presentation and clarity of the coursework report	20
Executive summary	20
Ratio calculations	10
Discussion of exceptional items and of their treatment in the ratio calculations	10
Quality of references used and of the general discussion and analysis	40
	100

 

Note that these categories are a general guide. The final mark will be awarded after         considering the overall quality of the piece of work.

 

Some advice concerning the coursework

These notes are intended to help you avoid some of the more common mistakes.

 

• Although the key figures that lead to your conclusions/recommendations should be included in the report, use the appendixes for detailed calculations. You have to refer to any appendixes it in the main body of your report. Do not attempt to include additional narrative discussion in the appendix. It will not be marked and you might lose some of the presentation marks for exceeding the word limit.
• Don’t get bogged down in the ratio calculations. There is no single correct way of calculating some of the ratios. Apply your knowledge and use a logical approach to your calculations. Also note that the majority of marks are awarded for your discussion of the results of your own calculations.
• You must show the formulae and figures used for your calculations, especially if you have adapted the usual form of a formula for the purpose of your analysis.
• Don’t be afraid of stating the obvious or of quoting directly from the Annual Report and Accounts. You will have spent hours analysing the information but you must assume that your reader has never seen it before and needs you to summarise and explain the information available. Your objective is to identify the most salient information to enable your reader to understand your chosen company’s performance, without having to read the report herself.
• You can assume that your reader has a good level of accounting knowledge and does not need you to explain technical terms.
• It is not sufficient to state simply “This ratio has gone up, that ratio has gone down and that one has remained the same”, without any further discussion. The reader can easily see the changes (if you have presented the data in an appropriate way!) What is needed is your analysis of why the ratio may have changed, or the possible implications of the ratio changing or remaining the same.
• Arguments presented in the discussion questions need to be correctly referenced, using the Harvard Referencing System
• For choices regarding presentation, you should consider this assignment as a business report, where you are trying to make a case for what you are arguing for and presenting clear conclusion/recommendations. I don’t prescribe a specific format as you should present your report in your own style, but if you do a web search with the key words “report writing” you will be able to find a number of guides that can help you making your choice of style.

 

Some Notes from me:

 

• Please double check my uploaded files.. Morrison’s Annual Reports can be found here: http://www.morrisons-corporate.com/investor-centre/Financial-reports/#

 

• Report Style

 

• More points will be gathered if we compare figures with another supermarket within UK like Tesco Sainsbury or Asda

 

Books that it will be good to use some references:

 

Core Materials

 

Atrill, P. & McLaney, E. – Accounting and Finance for Non-Specialists, 8th Edition – Pearson, 2013, ISBN-10: 027377803X – ISBN-13: 9780273778035

 

Watson, D. & Head, A. – Corporate Finance: Principles and Practice, 6th Edition – Pearson, 2013, ISBN-10: 0273762745 – ISBN-13: 9780273762744

 

Optional Materials

 

Brealey, R, Myers, S. & Allen, F. – Principles of Corporate Finance,10th Edition – McGraw-Hill, 2010, ISBN-10: 1259009513 – ISBN-13: 978-1259009518

 

Collier, P. – Accounting for Managers, 4th Edition – Wiley, 2012, ISBN-13: 9781119979678

 

McKenzie, W – FT Guide to Using and Interpreting Company Accounts, 4th Edition – Pearson, 2009, ISBN-10: 0273723960 – ISBN-13: 978-0273723967

 

Ryan, B. – Finance and Accounting for Business, 2nd Edition – Cengage Learning, 208, ISBN-10: 1-84480-897-1 – ISBN-13: 978-1-84480-897-7