IntroductionSainsbury is a retail giant. The company has a huge presence in UK and deals in “toiletries, stationery, non food items, clothing, furniture and similar other items”. (Sainsbury Website, 2010) The fact that the company deals in so many products and huge reach has given a wide market. The company has a presence in supermarkets, malls, departmental stores and provide the basic necessities for people thereby enabling them to grow. Marks & Spencer is also a retail giant. The company deals in “clothing, food items, furniture, toiletries and other household items”. (Marks & Spencer Website, 2010) The wide range of product and dispersion has made it a huge success.
The company with their policy to satisfy customers has grown and is able to capture a good market. CSL Limited is a drug manufacturer. The company has a huge presence and deals in “medicines, blood plasma derivatives, anti venom and other similar products”. (CSL Limited Website, 2010) The fact that the company deals in so many products and huge reach has given a wide market. The company has a presence in many countries due to the need served by the medicine manufactured by them which is used widely. Baxter International is also a drug manufacturer.
The company deals in “products to treat haemophilia, kidney, and other chronic and acute disease”. (Baxter International Website, 2010) The wide range of medicines and the ease with it relieves the patients from the pain has made it a huge success. The financial statement of all the four companies reveals so. Even the share prices shows improvement. With more consumers moving towards supermarkets and growth in patients suffering from different disease gives an opportunity to expand in overseas market.
Financial AnalysisFinancial analysis is very important for all business. Analyzing the statement helps in “planning, budgeting, monitoring, forecasting and improving the financial performance by taking vital decision”. (Micro Strategy, 2010) Proper analysing helps a long way to “understand the financial health”. (Micro Strategy, 2010) It helps to identify trends and compare with competitors and industry to gain advantage. The following is the ratios for Sainsbury, Marks & Spencer, CSL Limited and Baxter International Liquidity RatiosThis ratio plays an important part and helps “to identify the firms ability to meet its short term obligations and plays a huge role in the performance”.
(Financial Modelling Guide, 2010) The ratios for Sainsbury, Marks & Spencer, CSL Limited and Baxter International are asCurrent Ratio: “It measures the ability to pay the short term liabilities out of short term assets”. (Financial Modelling Guide, 2010) This ratio helps creditors, suppliers and investor to identify the liquid position. It is calculated as “Current Assets / Current Liabilities”. The current ratios for all the four companies are as followsComparing the retail giants we see that Marks & Spencer has a better liquidity position as compared to Sainsbury both in 2010 and 2009.
Both the companies still need to improve the ratio as it is a concern as the short term obligations are higher. This might make investors and suppliers stay away. When we consider the two companies together it shows that Marks & Spencer has better policies and strategies as compared to Sainsbury.