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Title: An Analysis & Evaluation of Financial Performance of J.Sainsbury PLC
Introduction:
J.Sainsbury plc is second largest food and retail chain supermarket in the United Kingdom. The provide convenience shopping facilities, online home delivery services and financial services through its Sainsbury Bank. Their banking facilities provides, loan, credit card, mortgages and insurance products to the customers. It was founded by John James Sainsbury in the year 1869 as a small grocery store. It slowly enhanced the products and services business and became the largest grocery in London by 1922.
Presently, due to Brexit and slowdown in the economy and due to increase in competitors, J. Sainsbury is facing tough competition and their sales growth and net profit margin is not reflecting sound. Also, the increase in online delivery & services has increased the competition among the various retailers in London. Sainsbury has showed a good performance in terms of proposed dividend and retaining the market share in the retail industry. They also saw a positive cash inflow in the current year 2019.
Hence, we will discuss the financial statements and the ratios of J.Sainsbury which will help us to determine how they have performed in the year 2019 and is are expected to do to enhance their sales and net profit in the next years.
Financial statement
Income statement
    Fiscal year is March-February. All values GBP Millions.
    2019
    2018
    2017
    Sales/Revenue
    29,007
    28,459
    26,231
    Sales Growth
    1.93%
    8.49%
    11.65%
    
    
    
    
    Cost of Goods Sold (COGS) incl. D&A
    27,088
    26,593
    24,721
    COGS excluding D&A
    26,351
    25,863
    24,073
    Depreciation & Amortization Expense
    737
    730
    648
    Depreciation
    636
    641
    594
    Amortization of Intangibles
    101
    89
    54
    COGS Growth
    1.86%
    7.57%
    11.85%
    
    
    
    
    Gross Income
    1,919
    1,866
    1,510
    Gross Income Growth
    2.84%
    23.58%
    8.32%
    
    
    
    
    Gross Profit Margin
    6.62%
    -
    -
    SG&A Expense
    1,602
    1,319
    1,164
    Other SG&A
    1,602
    1,319
    1,164
    SGA Growth
    21.46%
    13.32%
    63.48%
    
    
    
    
    EBIT
    317
    547
    -
    Unusual Expense
    137
    121
    -38
    
    
    
    
    Non Operating Income/Expense
    136
    66
    252
    
    
    
    
    Non-Operating Interest Income
    3
    14
    18
    Interest Expense
    84
    109
    114
    Interest Expense Growth
    -22.94%
    -4.39%
    -5.00%
    
    
    
    
    Gross Interest Expense
    90
    116
    121
    Interest Capitalized
    6
    7
    7
    Pre-tax Income
    235
    397
    540
    
    
    
    
    Pre-tax Income Growth
    -40.81%
    -26.48%
    -3.40%
    
    
    
    
    Pre-tax Margin
    0.81%
    -
    -
    Income Tax
    20
    100
    126
    Income Tax - Current Domestic
    81
    107
    113
    Income Tax - Current Foreign
    -
    -
    -
    Income Tax - Deferred Domestic
    -61
    -7
    13
    
    
    
    
    Equity in Affiliates
    4
    12
    -37
    
    
    
    
    Other After Tax Income (Expense)
    -18
    -18
    -18
    
    
    
    
    Consolidated Net Income
    201
    291
    359
    
    
    
    
    Net Income/ Profit
    201
    291
    359
    
    
    
    
    Net Income Growth
    -30.93%
    -18.94%
    -21.79%
    
    
    
    
    Net Margin
    0.69%
    -
    -
    Net Income After Extra-ordinaries
    201
    291
    359
    
    
    
    
    Net Income Available to Common
    201
    291
    359
    
    
    
    
    EPS (Basic)
    0.09
    0.13
    0.18
    
    
    
    
    EPS (Basic) Growth
    -31.20%
    -24.00%
    -26.78%
    
    
    
    
    Basic Shares Outstanding
    2,198
    2,186
    2,049
    EPS (Diluted)
    0.09
    0.13
    0.17
    
    
    
    
    EPS (Diluted) Growth
    -30.24%
    -23.09%
    -26.46%
    
    
    
    
    Diluted Shares Outstanding
    2,469
    2,430
    2,280
    EBITDA
    1,054
    1,277
    994
    EBITDA Growth
    -17.46%
    28.47%
    -21.48%
    
    
    
    
    EBITDA Margin
    3.63%
    -
    -
    EBIT
    317
    547
    -
Balance Sheet
    Fiscal year is March-February. All values GBP Millions.
    2019
    2018
    2017
    2016
    Cash & Short Term Investments
    1,332
    1,943
    1,277
    1,242
    Cash Only
    1,121
    1,047
    842
    1,143
    Short-Term Investments
    211
    896
    435
    99
    Cash & Short Term Investments Growth
    -31.45%
    52.15%
    2.82%
    -8.27%
    
    
    
    
    
    Cash & ST Investments / Total Assets
    5.63%
    8.81%
    6.40%
    7.28%
    Total Accounts Receivable
    4,299
    4,104
    3,260
    2,096
    Accounts Receivables, Net
    144
    117
    106
    96
    Accounts Receivables, Gross
    391
    249
    195
    175
    Bad Debt/Doubtful Accounts
    -247
    -132
    -89
    -79
    
    
    
    
    
    Other Receivables
    4,155
    3,987
    3,154
    2,000
    Accounts Receivable Growth
    4.75%
    25.89%
    55.53%
    6.34%
    Accounts Receivable Turnover
    6.75
    6.93
    8.05
    11.21
    Inventories
    1,929
    1,810
    1,775
    968
    Finished Goods
    1,929
    1,810
    1,774
    967
    Progress Payments & Other
    -
    -
    1
    1
    Other Current Assets
    21
    9
    10
    149
    Miscellaneous Current Assets
    21
    9
    10
    149
    Total Current Assets
    7,581
    7,866
    6,322
    4,455
    Net Property, Plant & Equipment
    9,708
    9,898
    10,006
    9,764
    Property, Plant & Equipment - Gross
    15,711
    15,669
    15,529
    15,259
    Buildings
    10,558
    10,245
    10,150
    9,773
    Construction in Progress
    -
    328
    299
    342
    Leases
    -
    98
    83
    82
    Other Property, Plant & Equipment
    5,153
    4,998
    4,997
    5,062
    Accumulated Depreciation
    6,003
    5,771
    5,523
    5,495
    Buildings
    2,805
    2,622
    2,461
    2,283
    Other Property, Plant & Equipment
    3,198
    3,112
    3,029
    3,182
    Total Investments and Advances
    859
    789
    682
    684
    LT Investment - Affiliate Companies
    205
    232
    237
    327
    Other Long-Term Investments
    654
    557
    445
    357
    Long-Term Note Receivable
    3,382
    2,367
    1,975
    1,741
    Intangible Assets
    1,044
    1,072
    803
    329
    Net Goodwill
    396
    397
    250
    138
    Net Other Intangibles
    648
    675
    553
    191
    Other Assets
    967
    9
    10
    -
    Deferred Charges
    959
    -
    -
    -
    Tangible Other Assets
    8
    9
    10
    -
    Total Assets
    23,648
    22,046
    19,961
    17,050
    Assets - Total - Growth
    7.27%
    10.45%
    17.07%
    2.39%
    Asset Turnover
    1.27
    -
    -
    -
    Return On Average Assets
    0.88%
    -
    -
    -
    Liabilities & Shareholders' Equity
     
     
     
     
    All values GBP Millions.
    2019
    2018
    2017
    2016
    ST Debt & Current Portion LT...