In today's economic and industrial crises financial management is the most important issue. It is very difficult for an organization to survive without proper financial management. It enhances my interest to get in-depth knowledge and application in business and financial management. I also choose this topic because during my previous studies I have studied on different topics in depth such as management accounting, financial accounting management accounts, corporate reporting and performance management. On basis of my knowledge I am excited to find how different business and accounting models can be applied in actual business scenarios. I found this project is best opportunity to fulfil my desires. This topic relates to analysis the financial and business performance of organization which is very interesting and I have gained load of theoretical knowledge in this subject area. This is my also my main interesting topic because I am really interested to become financial analyst. So this project is my first step which provides me the actual guide to get in depth practical knowledge on key business analysis topics such as financial management, corporate reporting, financial analysis skills, gathering data and application of data and deriving a meaningful conclusion.
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Interest in choosing Organisation:
I choose the Sainsbury plc as an organization to apply financial and business analysis. J. Sainsbury is the parent company of Sainsbury's supermarkets Ltd. It is found by John James and Mary Ann in 1869. J Sainsbury is the third largest grocer after market leader Tesco and Wal-Mart Stores Inc.'s Asda Group Ltd. It has market share of 16.3% of UK's supermarkets and continuously making growth in its market share. In contrast Tesco and Asda losses their market share of 0.1% and 0.2% respectively in 12 weeks to September,6 ,2010.(Simon Zekaria, DOW JONES NEWSWIRES)*.It is the first supermarket in the UK to sell Fair trade products since 1994**.The extensive expansion of its growth attracts me to make analysis about the strategies and financial management of the company.
Aims and Objectives involve in this Research:
The aim of this research is:
To present a formal understanding about importance of financial and business performance of organization and its link to over all business success.
To present strategy applied by Sainsbury Plc for financial and business management.
To critically evaluate the financial and business management strategies of Sainsbury Plc in relation to other competitor Tesco plc.
On the basis of set objective following are the research questions criteria which is met in my research analysis.
What is the basis of Sainsbury's business growth strategy?
What is the Sainsbury's current financial position based on past three years financial data?
How the financial and business strategy linked to each other?
How the external environment and internal business environment effect the future of the Sainsbury's Plc.
The research approach can be quantitative or qualitative. Presenting quantitative information without qualitative information does not provide detail position about the organization. I used quantitative data such as income statement, statement of financial position to analysis the financial performance of Sainsbury's and qualitative data such as porter 5 forces, PESTEL, SWOT, Ansof Matrix.
Part 2 Information gathering Process:
In the following sections I stated the information gathering process and sources which are used to assemble data.
The data collection depends on the research objectives. I have used the following sources to compile the data.
Primary Data: Primary data is the information collected at first hand according to specific research approach and no one else has access to it until it is published. There are various ways of collecting primary data e.g. questionnaires, interviews, focus groups, observations case studies, diaries, portfolios etc.
The secondary data is data collected by someone other than user. Example of secondary data sources includes newspapers, magazines, financial portals, and different government websites. It is easily available and mostly used in business and research analysis. Secondary data is collected by relaying on the sources of the collected data.
As my chosen topic which is related to the financial and business analysis of the Sainsbury Plc. I gathered the data such as statement of financial position, Income statement to analysis the financial position of company.
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Sources of Secondary Data:
There are various sources of data collection but It is difficult to find the relevant and reliable data. Following are main sources of information collection sources.
Internal Data: The data collected from inside the organization is called internal information. Accounting record such as income statement, Employees record, inventory record is common examples of internal data. Internal data is used to assess the company's future planning, financial strength and relation to customer and suppliers.
External Data: As the term implies secondary data is obtained outside the organization. Following are main examples of external data.
Data obtained from market in which organization operates.
Financial Newspapers and online.
External data in used to analysis the overall business and financial performance, competitive position, forecast about future position of organization and market share of business.
Data Application in Research:
The data chosen in this research is secondary data. Data is applied in different context using different accounting and Management Models and on the basis of that i use data is such a way to get a meaningful conclusion. Examples of data analysis techniques are Porter's five forces model, PESTEL, SWOT, Ansof Matrix etc. Internal information (income statement, Balance sheet, cash flow etc) is used to analysis the financial performance of Sainsbury's Plc. External information is helpful to analysis the business strength weaknesses and competitive environment and how it effect on Sainsbury.