Tesco Net Profit Analysis

Sainsbury’s have 157,000 employees and the amount of money that they profits per year is £25,632 million as 23 million customers come per week which demonstrates that it is a profit maker. The total sale of Sainsbury’s was +4.3% (including VAT, excluding fuel) in 2013, whereas the “like-to-like” sale was +1.8% (including VAT, excluding fuel) in 2013.

The gross profit margin measures the amount of profits that a company generates from its operations without consideration of its indirect costs. Thehigher thegross profit margin, the greater the efficiency of a company’s operations (Besley & Brigham 2007). It means that the company is generating enough income to cover its operating expenses. On the contrary, a lower gross profit margin indicates that the business is not generating adequate income to cover its operating expenses.

Net Margin is the ratio of net profits to revenues of a company. It is used as an indicator of a company’s ability to control its costs and how much profit it makes for every dollar of revenue it generates. Net Margin is calculated using the formula: Net Margin = (Net Profit / Revenues ) * 100 Net margins vary from company to company with individual industries having typically expected ranges given similar constraints within the industry. For example, a retail company might be expected to have low net margins while a technology company could generate margins of 15-20% or more. Companies that increase their net margins over time generally see their share price rise over time as well as the company is increasing the rate at which it turns dollars earned into profits.

This year Sainsbury had reported £581m in annual profits (Before tax) of which they awarded a 4.4% pay increase to 135,000 store employees.

Sainsbury’s have a long term goal to deliver their products and keep their customers happy. One of their objectives is to make life easier for their customers by offering products with good quality and service with a fair price. This also makes the customers happy and makes them want to shop

The purpose of this report is to critically analyse the financial ratio results of Morrison 2008 and 2009 as an equity analyst and compare it with like for like by using Tesco supermarket.

The purpose of this report is to analyse Tesco’s annual report. The reoprt consist of a sypnosis of Tescos, describing what it does where it does it, how many people it employs and whether it is growing or declining. It also consist of the main accounting policies used by the company; analyses of its financial performance for four years. It also shows the ratios for the performance analyses.

This measures the relationship between net profits and sales of a firm. The net profit margin is indicative of management’s ability to operate the business with sufficient success not only to recover revenues of the period, the cost of merchandise or services, the expenses of operating the business and the cost of the borrowed funds, but also leave a margin of reasonable

* DOM improves the key matric of the total profit it earns per pound of its total sales. They earned 19.3 pence per pound spent by customers in FY2009 but in FY2010 they

J Sainsbury plc (Sainsbury) is a retail chain based in the UK. Sainsbury is engaged in grocery retailing through its supermarkets and convenience stores principally in the UK. The company operates its business through three divisions, namely, Retailing, Financial Services and Property Investment. Sainsbury serves its customers through a chain of 537 supermarkets and 335 convenience stores under the brand Sainsburys, and financial services via Sainsburys Bank. Sainsbury offers around 30,000 food and non-food products and services. The company is headquartered in London, the UK J Sainsbury plc Key Recent Developments Mar 11, 2010: Sainsbury launches first bakery college in the UK Mar 08, 2010: Sainsbury to add

profit margin of 5% to a current net profit margin of 18% in 2012, lululemon is

In terms of industry profitability, it appears that profit margins have a tendency to fall. This is because competition is high and customers tend to buy low-priced high-value items. The average gross margin and net profit margin is 37.1% and 14.3%, respectively (MSN Money, 2010).

has worked for the financial year when compared to the sales of 2010 of £21,421m (Sainsbury,

As I have mentioned before, this research paper is being taken exclusively with the aim to evaluate the Tesco’s performance in both financial and business terms over a three years period. Since the financials will be compared with its three year

Operating profit margin figures in the table above show the return from net sales[13]. However profit margin ratios are high enough for the 3 years, there is a fall from 12.86% to 11.26% during 2011-12. Sales revenue increases with a higher rate than gross profit so there is a poor