Financial and competitive analysis of company .

Britain’s fourth largest grocer delivered a worse than expected 1. 6 percent decline in like for like sales in the six months to August 4 3013. In comparison Ginsburg has 5. 79% gross profit margin in 2014 . Which is better than previous year 5. 48% in 2013 and 5. 43% in 2012 . However MM Morrison has better performance than Ginsburg. Return on Capital Employed Source Appendix 1 MM Morrison has (1. 20%) return on capital employed in 2014 . Which is worse than previous year 1 1. 58% in 2013 and 12. 88% in 2012. An 2013 financial year Morrison has argue investment in store and online business expansion .

Therefore ROCK is negative in 2014. But this kind of investment will increase ROCK in near future . (Tremor Strain , 2014) added that during the period opened a further 18 core stores ,one of which was replaced ,and 90 new Morrison M local convenience stores . We also refurbished a further 100 stores in cooperating fresh format concept. In comparison Ginsburg has 10. 61% return on capital employed in 2014 . Which is better than last year 9. 46% in 2013 and 9. 80% in 2012 . Therefore Ginsburg has better performance than Morrison.

We Will Write a Custom Essay Specifically
For You For Only $13.90/page!

order now

Operating profit margin MM Morrison has operation profit of (0. 54%) in 2014 which is lower than previous year 5. 24% in 2013 and 5. 51% in 2012 . Len financial year Morrison sale was decline due to high competition in supermarket industry . However this kind of situation will change in near future when the company change their strategy to tackle the situation . (Aldrich Phillip ,2014) added that inflation fell too near five year low in May as a price war between British and German supermarket delivered in windfall for shoppers . The customer price index dropped toll . Percent . Len May ,its lowest level nice October 2009 ,from 1. 8 percent in April according to the office for National Statistics . Let was driven down by the first decline in food and non alcoholic drink prices in eight years as the likes of Tests and Ginsburg cut price to complete with discounters Laid and Lid. In comparison Ginsburg has operating profit of 4. 21% in 2014 . Which is better than last year of 3. 78% in 2913 and 3. 92% in 2012 . However Morrison has better performance in 2013 and 2012 than Ginsburg but in 2014 Ginsburg has better operation profit .

Return on equity: Morrison has (5. 07%) of return on equity in 2014 . Which is worse than previous year 12. 37% in 2013 and 12. 78% in 2012 . Len this financial year Morrison has business expansion via online and in store . Therefore its net income is decline and return on equity in negative . Afford Kashmir ,2013) wrote that Morrison is to begin delivery groceries to online customers in Warehousing from January which year before eventually reaching Londoner doorsteps this summer as the supermarket plays catch-up with rivals.

This includes software that allows customers to import their favorites products list from other online grocery sites including Morrison partner Coda . Morrison which already sells non-food items online, had held back from selling food because of doubts over the profitability of delivering groceries to customers home . Let initially spent Meme trying to develop its own online business before agreeing to a Emma deal with Coda earlier this year. In comparison Ginsburg has return on equity of 11. 93% in 2014 which is better than 10. 31% in 2013 and 10. 45% in 2012 .

Therefore Ginsburg has better performance than Morrison. Net Profit Margin. Morrison has net profit margin of (1. 35%) in 2014 which is worse than previous year of 3. 57% in 2013 and 3. 1% in 2012. MM Morrison has large expense in Administration and recurring exceptional cost . Let is difficult to improve ration when the company has this kind of unexpected expense explain more about ratio movement. Why Morrison net profit decrease from 2012 to 2013 and improve from 2013 to 2014 . However this types of expense can be control in future by good management system. Strain Tremor ,2014) explained that the challenging economic environment and the important steps we are to re shape the business resulted in exceptional non recurring cost of Emma . If this ,IEEE relates to their new space pipeline which has been reassessed as part of their property review . In comparison Ginsburg has 2. 99% of net profit margin in 2014 which is better than previous year of 2. 58% in 2013 and 2. 68% in 2012 . However Morrison has better net profit margin in 2012 and 2013 . But in 2014 Morrison net profit margin has gone done than Ginsburg .

Current ratio Morrison has current ratio of 0. 49 in 2014 which is lower than previous year of 0. 57 in 2013 and 0. 57 in 2012. Because of huge short term borrowing company current ratio has fallen . However this situation will improve in future form strong company credit management. The chief financial officer (Tremor Strain,2014) explained that net debt at the end of the year was EH. Ban ,an increase of Emma over the previous year ,driven by strategic investment in growth opportunities in multi channel, increased dividend payment and completion of their equity retirement program .

During the year they have taken steps to increase and diversify the funds and facilities available to the Group. In June they issued Euro bond to institutional investors which provided (Emma) of funding through to June 2020. An December 2013,they concluded a Emma term loan ,maturing in December 2014. In comparison Ginsburg has 0. 65 current ratio in 2014 which I s better than last year of 0. 61 in 2013 and 0. 65 in 2012 . However Ginsburg has better performance than Morrison. Quick ratio Morrison has 0. 20 quick ratio in 2014 .

Which is worse than previous year of 0. 24 in 2013 and 0. 24 in 2012. Because of expansion of business and online sales Morrison has lower quick ratio in this financial year. (Fourier Elizabeth,2013) wrote that super market chain Morrison yesterday snapped up 49 stores from defunct video chain Blockbuster proving its commitment to the I-J high street as it seeks to expand it offering of smaller shops. Morrison which earlier this month bought seven stores from collapsed camera retailer Aesop, will use the new sites to grow its Morrison M Local convenience business .

The Asks fourth largest grocer has been lagging behind rivals in recent months(Fourier Elizabeth ,2013) In comparison Ginsburg has 0. 50 quick ratio in 2014 which is better than previous year of 0. 30 in 2013 and 0. 35 in 2012 . Therefore Ginsburg has better quick ratio than Morrison. Gearing MM Morrison has 64. 64% gearing in 2014 . Which is worse than previous year of 46. 50% in 2013 and 29. 65% in 2012 . MM has sales decline in recent years . This kind of situation affects company gearing because the debt is higher due huge amount of short term borrowing .

However this situation will change in short term period when the economy has recovery of recession and public earning is rise . (Ping SKU,2014) wrote that supermarket price was and cheaper air fares pushed the rate of inflation down sharply in May ,as food prices fell for the first time in more than eight years . Lamination ,as measured by the Consumer Price Index(Cop),eased to 1. PC in May from 1. PC in April, when the timing of Easter travel price higher ,Mays rate is the sweet since October 2009 and well below analysis expectation of 1. PC. Morrison cuts price of 1200 products accords its store by an average of APPC this months .

Supermarket have stepped up their efforts in recent months fend off competition from discount retailers such as Laid and Lid. In comparison Ginsburg has gearing of 46. 37% in 2014 which is better than previous year of 48. 53% in 2013 and 49. 16% in 2012 . However Ginsburg has better performance in gearing than Morrison. Interest Cover Morrison has interest cover of (1. 08) in 2014 which is worse than previous year of 12. 65 in 2013 and 20. 0 in 2012. Due to sales decline and high competition in this financial year . However this kind of situation will be change accordance with company policy and procedure. Shah Oliver ,2014 ) has written that Morrison is poised to unveil aggressive price cuts and IEEE m of property sales this week as it struggles to fend off discount rivals and placate anxious shareholders . Britain ‘s fourth biggest supermarket is expected to trump recent reduction announced by promising to spend hundreds of millions of pounds lowering prices on its core ranges . Morrison has become under intense strain as Laid and Lid . So -called “hard discounters” form Germany ,have invaded its heartland in northern England and lured a way customers . According to data from the research company Nielsen sales at Morrison dropped 3. % year -on -year in the 12 weeks to February 1. In comparison Ginsburg has interest cover of 6. 52 in 2014 which is better than previous year of 5. 92 in 2013 and 5. 96 in 2012 . However Morrison has better interest cover in 2012 and 2013 but in 2014 Ginsburg has better interest cover . Earnings per share Morrison has (10. 23) pence earnings per share in 2014 which is worse than previous year of 26. 5 in 2013 and 26. 68 in 2012 . Because of decline on net profit during this financial year Morrison earning per share is negative . However this situation will solved in near future when company changes their policy about market.

Afford Kashmir ,2014) wrote that share in Morrison plunged 12 percent to their lowest level since 2008 after it revealed it would invest El ban in slashing prices over the next three years to win back customers defecting to hard discounters . The retailer which has fared the worst from the rise of Laid and Lid ,warned the profits would more than halve this year . Share in Morrison online partner Coda fell 6. 77 percent while bigger rivals Tests and J Ginsburg share fell 5 percent and 8. 5 percent respectively . In comparison Ginsburg has earnings per share of 37. 7 in 2014 which is better than previous year 32. In 2013 and 32. 0 in 2012 . However Ginsburg has better earnings per share than Morrison. Price Earnings ratio Morrison has 23. 32 pole ratio in 2014 which is better than previous year of 9. 38 in 2013 and 1 1. 06 in 2012 . Because of decrease of earning per share because sales decline the price earnings ratio is higher even though the share price is not very gig . This will change when earning per share will increase . (Thompson Susan , 2013 ) wrote that sales and profit of Morrison have fallen once more as the supermarket warned that its customers had yet to benefit form the improving economic picture .

Britain ‘s fourth largest grocer delivered a worse than expected 1. 6 percent decline in like for like sales in the sis month to August 13. In comparison Ginsburg has pole ratio of 9. 15 in 2014 which is worse than last year of 10. 36 in 2013 and 9. 22 in 2012. However Morrison has better pole ration than Ginsburg. Average Inventory period Company Inventory period 17. Days in 2014 compare to 16. 62 days in 2013 and 15. 50 days in 2012. MM Morrison has new expansion and new online sales operation during recent financial years . When company has this kind of expansion it is difficult to clear inventory quickly .

However this investment can lead inventory period reduction in near future . (Spence Peter ,2014) wrote that coda group pal confirms that it is in discussions with MM Morrison supermarket pal which may lead to an agreement to license certain of Coda’s existing and future intellectual property (P) and operating knowledge for the purpose of Morrison commencing an online grocery cuisines in the I-J . These negotiation do not involve any discussion of Morrison acquiring either the whole of or any equity stake in Coda . In comparison Ginsburg average inventory period is 16. 11 days which is worse than previous year of 15. 5 days in 2013 and 15. 15 days in 2012 . However Ginsburg has better performance in inventory period. Business Analysis of the MM Morrison. To analyze the Morrison SOOT and Porters Five Forces are used . Strength Strength are those on which is good at. Strength of MM Morrison. Morrison is very good at its own brand . Therefore own brand is Morrison strength. Similarly Morrison has its own production of seafood, vegetables and meats from which it can attract customers than its rivals. ( Shakespeare Stephan ,2013 ) wrote that for food supermarket brands we have some signs of a “knock on” effect .

Morrison have been vocal about the fact that it sources direct from farmers, and as a result it is the only I-J supermarket to see its perception among consumers actually improve in the wake of the horseman scandal. Another strength of Morrison is getting award in this financial year. The Chief Executive of Morrison (Phillips Dalton,2014) explained that Morrison was awarded by Employee Engagement Award, Enhancing Livelihoods Award ,Must sustainable Retailer of the year and European CROSS Award in this 2013/14 financial year . In comparison Ginsburg does not such kind of own brand popularity even though they have their own branded product .

Weakness Weakness are those on which company needs to be fixed by themselves . Weakness of MM Morrison Morrison has the weakness of its own internal management control system . (Ralph Alex ,2014 ) wrote that a Morrison employee has been arrested as part of the investigation into the theft of the supermarkets staff payroll . The data ,which is included bank account details ,was stolen on Thursday -on the day MM Morrison warned on profits -and is the latest cause of embarrassment for the company. Morrison has the weakness of its corporate social responsibility by which its rivals can win the race . Ruddier Graham ,2014 ) wrote that financial conduct Authority Charged former Morrison treasurer and head of tax with insider trading . 1 the latest scandal to strike one of the “big four” supermarkets, the financial conduct authority has charged Paul Coyly, the former group treasure and head of tax at Morrison ,with two counts of insider leaning . The FCC confirmed in a statement that the charges relate to trading in Coda shares between February and May 2013 . The value of Coda rocketed last year after it announced a tie -up with Morrison to create a new online service for the Bradford -based retailer.

However this kind of situation can be solved by good governance and internal control within the company. In comparison Ginsburg has better internal control system and good governance than Morrison. Opportunity Opportunity are those which makes company better than its rivals . However these are beyond the company control. Opportunity of Morrison MM Morrison has opportunity of cooperation with different financial organizations which helps indirectly to increase the consumer’s attraction toward it. (Christie Sophie ,2013 ) wrote that putting all your spending on a credit card sounds risky .

But choose the right deal and use it in the right way and it can be financially rewarding . There are number of enticing reward and cash back cards are available to reliable borrowers . The card offers 10,500 freedom point worth EWE when we spend at least IEEE within the first three months of opening the account . Points are earned everything we use our Freedom Reward Card ,with one point given for every El on general spending and double points at UK supermarket ,petrol station and on TFH. In comparison Ginsburg has the similar opportunities like Morrison form financial organizations.

Threats Threats are those which make company difficult to achieve organizational goal within the industry . However those are beyond with company control. Threats of Morrison Morrison sale is decline day by in recent year . This is the main threat of supermarket . (Walla Harry ,2014 ) wrote that this not a good time to be a big supermarket . Many may struggle to shed a tear for Tests, Ginsburg, Morrison and USDA . But after a generation of dominance ,of being blamed for many of society ‘s ills -the demise of the high street ,binge drinking and obesity -the big four are suddenly finding life pretty tough.

Morrison has threat of price cut of product in recent years. (Parkinson Gary ,2014) wrote that the day after Morrison unveiled price cuts to 1200 products ,brokers ran the numbers on what it meant for all the supermarkets . Their consensus was that the reductions by as much as 60 percent and 17 percent on average would hurt the wounded industry still further . Like the other big four supermarkets ,Morrison has struggled as the German discounters Lid and Laid eat their lunch. The El billion it is throwing at prices over the next three years is the attempt by Dalton Phillips,Morrison embattled chief executive to fight back.

In comparison Ginsburg has facing similar threats within the supermarket industry. Porter Five Forces To analyze the business aspect of MM Morrison Porters Five Forces are used. Threat of New Entrants: Threat of new entrants of Morrison is very low. In I-J supermarket there are lots of entry barriers for new entrants. (Sammie , 1989)wrote that threat of potential new entrants in the supermarket industry is limited . Most of the large chains have built their power due to operating efficiency, one stop shopping and major marketing mix expenditure. In comparison Ginsburg has low threat of new entrants like Morrison.

Bargaining Power of Supplier: The bargaining power of supplier of Morrison is low . Because in supermarket industry most of the companies are not depend on only one supplier. (Khan Moorhen ,2014) wrote that Britain’s food producers have become the latest victims of the country’s raging supermarket price wars, according to a survey of the I-J ‘s food and drink company . Profit margin among Britain’s grocers are flat lining at already historic lows and have little room to be report by CO &C strategy consultants in Partnership with the Grocer magazine .

In comparison Ginsburg ‘s supplier have not strong bargaining power as well. Bargaining Power of Buyers: Bargaining power of buyers for Morrison is high . Because if a group of customers are diverted by rivals than company sales will be affected negatively. (Clerk Andrew , 2014) wrote that Morrison has fired a fresh salvo in Britain’s supermarket price war by creating a loyalty card that guarantees to match prices at Laid and Lid ,the card ladled “Match & More”. Under the scheme shoppers holding the card will automatically be credited with points if their purchases would have been cheaper at any competing chain . N comparison Ginsburg has the similar bargaining power of buyers. The threat of substitutes products or services: The threat of substitutes products of services Morrison is high . Len supermarket industry there are “big four” are already and Lid and Laid are coming in very close competition in recent years . An the other hand off license and organic food distributors are also the substitutes of products of Morrison. Tests Sunburst’s and Morrison end during slumps in sales with price of average shopping basket the same as a year ago for shoppers .

More than El ban wiped off the stock market value of Britain ‘s grocery retailers . After new data revealed their sales are growing at the slowest rate on record with the “big four” struggling to grow sales the discounters Laid and Lid continued their rapid growth Laid sales rose by 29. 1 PC during 12 weeks and Lid up by 17. PC (Ruddier Graham ,2014) In comparison Ginsburg has the similar threat of substitutes products of services. Rivalry Among Existing competitors: The rivalry among existing competitors for Morrison is very high.

Because of high competition within supermarket industry specially Morrison has the rivalry of Laid and Lid and other three USDA , Tests and Ginsburg form “big four”. (Ruddier Graham ,2014 ) wrote that the I-J bosses of Laid say the discount retailer is benefiting form a “lack of trust” in traditional supermarkets and that its sales have actually been boosted by the price war among the “big four” . Laid reported that sales grew 35. PC to EH. Ban in 2013 ,with like for like sales up APPC ,driving pr tax profit up 5. 2 PC to mm .

The company said it paid EWE. Mm of corporation tax in the UK ,a rate of 24 PC . The rise of Laid highlights the pressure on the “big four” , Tests USDA, Ginsburg and Morrison . In comparison Ginsburg has facing the similar threats within the industry. Conclusion of this research project. From this research project the following findings are concluded. MM Morrison profit has gone down in this financial year due to big extension in store and online sales expansion. Because of economic recession reduced their price of goods and services . Therefore the profit