JSAINSBURY plc

Comperative and common sized Group income statement

for the 52 weeks to 19 March 2011
Revenue
Cost of sales
Gross Profit
Administrative expenses
Other income
Operating profit
Finance income
Finance costs
Share of post-tax profit from joint ventures
Profit before taxation
Income tax expense
Profit for the year

2011
m
21,102.00
19,942.00
1,160.00
417.00
108.00
851.00
32.00
116.00
60.00
827.00
187.00
640.00

% sales
100.00%
94.50%
5.50%
1.98%
0.51%
4.03%
0.15%
0.55%
0.28%
3.92%
0.89%
3.03%

2010
m
19,964.00
18,882.00
1,082.00
399.00
27.00
710.00
33.00
148.00
138.00
733.00
148.00
585.00

% sales
100.00%
94.58%
5.42%
2.00%
0.14%
3.56%
0.17%
0.74%
0.69%
3.67%
0.74%
2.93%

Thorntons PLC
Comparative and common sized consolidated income statement
52 weeks ended 25 June 2011
2011
Revenue
Cost of sales
Gross profit
Operating expenses
Other operating income
Operating profit
Finance income
Finance costs
Profit before tax
Taxation
Profit for the year

m
218.255
117.516
100.739
101.561
1.674
0.852
0.011
1.934
(1.071)
(0.818)
(0.253)

% Sales
100.00%
53.84%
46.16%
46.53%
0.77%
0.39%
0.01%
0.89%
0.00%
-0.49%
-0.37%
-0.12%

2010
m
% sales
214.553
100.00%
108.009
50.34%
106.544
49.66%
100.348
46.77%
1.386
0.65%
7.582
3.53%
0.212
0.10%
1.657
0.77%
0.00%
6.137
2.86%
1.783
0.83%
4.354
2.03%

atement

Change
% Change
1,138.00
5.70%
1,060.00
5.61%
78.00
7.21%
18.00
4.51%
81.00
300.00%
141.00
19.86%
(1.00)
-3.03%
(32.00)
-21.62%
(78.00)
-56.52%
94.00
12.82%
39.00
26.35%
55.00
9.40%

e statement

Change
% Change
3.70
1.7%
9.51
8.8%
(5.81)
-5.4%
1.21
1.2%
0.29
20.8%
(6.73)
-88.8%
(0.20)
-94.8%
0.28
16.7%
(7.21)
-117.5%
(2.60)
-145.9%
(4.61)
-105.8%

J Sainsbury plc
COMPARATIVE AND COMMON SIZED BALANCE SHEETS AS AT 19 March 2011 and March 2010
2011
m
Non current assets
Property, plant and equipment
Intangible Assets
Investments in subsidiaries
Investment in joint ventures
Available for sale financial assets
Other receivables
Derivative financial instruments
Deferred income tax asset
Current assets
Inventories
Trade and other receivables
Derivative financial instruments
Cash and cash equivalents
Non current assets held for sale
Total assets
Current Liabilities
Trade and other payables
Borrowings
Derivative financial instruments
Taxes payable
Provisions
Net current Liabilities
Non current liablilities
Other payables
Borrowings
Derivative Financial instruments
Deffered income tax liability
Provisions
Retirement benefit obligations
Net assets
Equity
Called up share capital
Share premium
Capital redemption reserve

2010
m

% of Total assets
2011
2010 Change

8,784.00
151.00

8,203.00
144.00

502.00
176.00
36.00
29.00

449.00
150.00
36.00
20.00

9,678.00

9,002.00

77.06%
1.32%
0.00%
4.40%
1.54%
0.32%
0.25%
0.00%
84.90%

812.00
343.00
52.00
501.00
1,708.00
13.00
1,721.00
11,399.00

702.00
215.00
43.00
837.00
1,797.00
56.00
1,853.00
10,855.00

7.12%
3.01%
0.46%
4.40%
14.98%
0.11%
15.10%
100.00%

76%
1%
0%
4%
1%
0%
0%
0%
83%
0%
6%
2%
0%
8%
17%
1%
17%
100%

(2,597.00)
(74.00)
(59.00)
(201.00)
(11.00)
(2,942.00)
(1,221.00)

(2,466.00)
(73.00)
(41.00)
(200.00)
(13.00)
(2,793.00)
(940.00)

-22.78%
-0.65%
-0.52%
-1.76%
-0.10%
-25.81%
-10.71%

-23%
-1%
0%
-2%
0%
-26%
-9%

(120.00)
(2,339.00)
(172.00)
(62.00)
(340.00)
(3,033.00)
5,424.00

(106.00)
(2,357.00)
(2.00)
(144.00)
(66.00)
(421.00)
(3,096.00)
4,966.00

-1.05%
-20.52%
0.00%
-1.51%
-0.54%
-2.98%
-26.61%
47.58%

-1%
-22%
0%
-1%
-1%
-4%
-29%
46%

535.00
1,048.00
680.00

532.00
1,033.00
680.00

4.69%
9.19%
5.97%

5%
10%
6%

% Change

581.00
7.08%
7.00
4.86%
53.00
11.80%
26.00
17.33%
0.00%
9.00
45.00%
676.00
7.51%
110.00
15.67%
128.00
59.53%
9.00
20.93%
(336.00) -40.14%
(89.00)
-4.95%
(43.00) -76.79%
(132.00)
-7.12%
544.00
5.01%
131.00
5.31%
1.00
1.37%
18.00
43.90%
1.00
0.50%
(2.00) -15.38%
149.00
5.33%
281.00
29.89%
14.00
13.21%
(18.00)
-0.76%
(2.00) -100.00%
28.00
19.44%
(4.00)
-6.06%
(81.00) -19.24%
(63.00)
-2.03%
458.00
9.22%
3.00
0.56%
15.00
1.45%
0.00%

Other reserves
Retained earnings
Total equity

(213.00)
3,374.00
5,424.00

(242.00)
2,963.00
4,966.00

-1.87%
29.60%
47.58%

-2%
27%
46%

29.00
411.00
458.00

-11.98%
13.87%
9.22%

THORNTON PLC
COMPARATIVE AND COMMON SIZED BALANCE SHEET FOR 2010 AND 2011
Assets
Non-current assets
intangible assets
Property, plant and equipment
Investment in subsidiaries
Deferred tax assets
Current assets
Inventory
Trade and other receivables
Cash and cash equivalents

2011
m

2010
m

2011

2.792
52.667

55.459

2.792
26.76
27.368
4.826
61.746

2.53%
47.77%
0.00%
0.00%
50.30%

2.39%
22.89%
23.41%
4.13%
52.81%

37.018
16.017
1.752
54.787
110.246

37.01
16.72
1.452
55.182
116.928

33.58%
14.53%
1.59%
49.70%
100.00%

31.65%
14.30%
1.24%
47.19%
100.00%

0
0.00%
25.907
96.81%
-27.368 -100.00%
-4.826 -100.00%
-6.287 -10.18%
0
0.008
0.02%
-0.703
-4.20%
0.3
20.66%
-0.395
-0.72%
-6.682
-5.71%

6.20%
12.49%
-1.18%
17.51%

5.85%
11.77%
4.90%
22.52%

0
0.00%
0
0.00%
-7.024 -122.63%
-7.024 -26.67%

29.44%
20.76%

27.98%
19.57%

-0.257
0

-0.79%
0.00%

0.88%
51.08%

0.83%
48.38%

0
-0.257

0.00%
-0.45%

3.04%
0.54%
22.92%
2.45%
2.46%
31.41%
82.49%
100.00%

2.87%
0.00%
21.61%
2.31%
2.32%
29.10%
77.48%
100.00%

0
0.599
0
0
0
0.599
0.342
-6.682

0.00%

Total Assets
Equity and liabilities
Shareholders' equity attributable to owners of the parent
ordinary shares
6.837
6.837
share premium
13.768
13.768
Deficit/Retained earnings
-1.296
5.728
Total equity
19.309
26.333
Liabilities
Current Liabilities
Trade and other payables
32.457
32.714
Borrowings
22.886
22.886
Current tax liabilities
Provisions for liabilities
0.967
0.967
56.31
56.567
Non-current liabilities
Borrowings
3.355
3.355
Deferred tax liabilities
0.599
Retirement benefit obligations
25.264
25.264
Other non-current liabilities
2.699
2.699
Provisions for liabilities
2.71
2.71
34.627
34.028
Total liabilities
90.937
90.595
Total equity and liabilities
110.246
116.928

2010 Change

% Change

0.00%
0.00%
0.00%
1.76%
0.38%
-5.71%

March 2010

ANALYSIS OF RATIOS
1. LIQUIDITY ANALYSIS

NET WORKING CAPITAL

Current Ratio

Total current Assets - Current liabilities

Current assets/Current liabilities

J Sainsbury plc
2011
(1,221.00)
0.58

Quick ratio
Current assets - Inventory/current liabilities
0.31
The liquidity position of the two companies can be analised as follows: J. Sainsbury plc liquidity positions has futher declined b
million pounds in 2010. the current and quick ratios are both below one this indicate short term liquidity problems for the com
also has shown a decline in their liquidity position up to 9% from 1.39M pounds. The current ratio is a lotbetter compared to v
also signifies liquidity problems for the company. The post financial crisis effects can be visible in both companies as they both
liquidity.
2. PROFITABILITY ANALYSIS
Gross profit margin
Gross profit/sales
5.50%
Operating proft margin
Operating Profit/sales
4.03%
Net profit margin
Net profit/sales
3.03%
Return on Equity
Net income/Total Equity
11.80%
Return on Assets
Net income/Total assets
5.61%
J Sainsbury has shown improvements in their profitability from 2010 with gains in their profit margins and Returns to shareho
Thornstons PLC has mixed profitability concerns. The current restructuring of the Thorntons business has led to a number of ex
impairment and onerous lease charges; provision to cover the costs associated with the outsourcing of the warehousing and d
bank refinancing. Pre-tax profit before exceptionals for the period was 4.3 million (2010: 6.9 million). The combined total of
amounts to 5.4 million for the period (2010: 0.8 million) resulting in an overall pre-tax loss for the period of 1.1 million (20
million).

3. EFFICIENCY RATIOS
Asset turnover
Annual Sales Revenue/Total Assets
1.85
Inventory turnover
cost of goods sold/average stock
26.34
Receivable turnover
Annual sales/average receivables
75.63
Average collection period
average debtors/annual sales * 365
4.83
Average payment period
Average payables/annual purchases* 365
46.33
Invetory days
Average stock/cost of sales * 365
13.86
The financial activity of the two companies can be seen as follows: J Sainsbury has a sizeable inventory turnover compared to T
shows a low invetory turnover. The asset turnover is above one for the two periods in all companies. The two companies seenm
payment terms compared to their average collection days.
4. LEVERAGE ANALYSIS
Debt to equity ratio
Total debt/equity
1.10
Total Debt ratio
Total debt/total assets
0.52
Long term debt to Equity
Longterm debt/equity
56%
Long term debt to total assets Longterm debt/total assets
0.27
Times Earned ratio
Operating profit/Finance costs
7.34
Cash coverage ratio
Cash from operations/Finance costs
7.36
J SAINSBURY gearing has declines slightly to 56% from 62%. Thornston's gearing ha significantly increased due to its current re
causing it to incurr long term debts. The gearing has inreased from 129% to 179%. Thornston plc is heavily funded by debt this
they efficiently utilize these resources over time but in the short run leverage costs and obligations pull down the company pro
service long tem debt as evidenced by the Times Earned ratio above. The company was barely able to cover its finace costs fro
times.

J SAINSBURY gearing has declines slightly to 56% from 62%. Thornston's gearing ha significantly increased due to its current re
causing it to incurr long term debts. The gearing has inreased from 129% to 179%. Thornston plc is heavily funded by debt this
they efficiently utilize these resources over time but in the short run leverage costs and obligations pull down the company pro
service long tem debt as evidenced by the Times Earned ratio above. The company was barely able to cover its finace costs fro
times.

5.MARKET RATIO ANALYSIS

Net income available to common
shareholders/Number of Outstanding Shares of
Common Stock
Earnings per share
34.4 pence
Dividend per share
15.2
Dividend yield
9.80%
The market ratios favor J Sainsbury PLC, the company has increased its earnings to shareholders plus dividinds as observed ab
improved in the stock market.Thornston PLC on the other end has dissapointed shareholders with its recorded loss. The earnin
dividends hav dropped and also its dividend yield.
6. OTHER KEY PERFORMANCE INDICATORS
cash flows from operations
854
Cash flow from operations in millions of pounds which are all positive cash flows.
Sales Growth
6%
Total sales of J.Sunsbury has increased to 6% for 2011 compared to only 2% from Thornston plc
SUMMARY OF KEY RATIOS
2011
5.61%
R.O.A
R.O.E
11.80%
Net profit margin
3.03%
Asset turnover
1.85
Equity multiplier
2.10
Net working capital to total assets
-10.711%
Retained Earnings to Total Assets
29.60%
Market value of equity to book value of debt
0.62
Operating profit to total assets
7.47%
Multiple Discriminant analysis

Z= 0.012X1 + 0.014X2 + 0.033X3+ 0.006X4 +

0.010X5
Discriminant function
2.75%
The MDA tries to identify ratios that can predict bankrupty. The bechmark is 2.675 and firms above that are assumed to be fin
below that level the possibility of bankruptcy increases. J. Sainsbury PLC above that hence financially sound while Thornton PL
posible bankuptcy risk.

Earnings per share

PENCE

Jsansbury
Thornston

Basic Earning per share 2011 - 2007

30
25
20

2011
26.5
-0.4

20
Jsansbury

15

Thornston
10
5
0
2011
-5

2010

2009
YEARS

2008

2007

OS

S
J Sainsbury plc
2010
(940.00)
0.66

Thorntons PLC
2011
(1.52)
0.97

2010
(1.39)
0.98

0.41
0.32
0.32
iquidity positions has futher declined by almost 30% from 940
ort term liquidity problems for the company. Thornstons PLC
rrent ratio is a lotbetter compared to very low quick ratios this
visible in both companies as they both exibit signs of low

SIS

5.42%
46.16%
49.66%
3.56%
0.39%
3.53%
2.93%
-0.12%
2.03%
11.78%
-1.31%
16.53%
5.39%
-0.23%
3.72%
profit margins and Returns to shareholders. However
tons business has led to a number of exceptional costs:
outsourcing of the warehousing and distribution functions; and
10: 6.9 million). The combined total of these exceptional items
x loss for the period of 1.1 million (2010: pre-tax profit of 6.1

1.84
1.98
1.83
26.90
3.17
2.92
92.86
13.33
12.83
3.93
27.37
28.44
47.67
101.21
110.55
13.57
114.96
125.07
eable inventory turnover compared to Thornston PLC which
l companies. The two companies seenms to have favourable

1.19
4.71
3.44
0.54
0.82
0.77
62%
179%
129%
0.29
0.31
0.29
4.80
0.44
4.58
6.80
6.95
7.87
nificantly increased due to its current restructuring efforts
nston plc is heavily funded by debt this ha its advantages when
obligations pull down the company profits and its ability to
barely able to cover its finace costs from 4.58 times to .44

nificantly increased due to its current restructuring efforts

nston plc is heavily funded by debt this ha its advantages when
obligations pull down the company profits and its ability to
barely able to cover its finace costs from 4.58 times to .44

SIS

32.1 pence
(0.4) pence
6.5 pence
14.1
2.2
6.1
8.10%
3.70%
7.40%
eholders plus dividinds as observed above. Its yield has also
lders with its recorded loss. The earnings to shareholders and

DICATORS
1,006

13.445

6%

13.045
2%

ston plc
2010
5.39%
11.78%
2.93%
1.84
2.19
-8.660%
27.30%
0.68
6.54%

2011
-0.23%
-1.31%
-0.12%
1.98
5.71
-1.381%
-1.18%
0.12
0.77%

2010
3.72%
16.53%
2.03%
1.83
4.44
-1.184%
4.90%
0.16
6.48%

2.74%
2.04%
2.20%
firms above that are assumed to be financially sound and
ce financially sound while Thornton PLC is below and hence a

2010
23.9
6.5

2009
21.2
5.4

2008
17.4
9.1

2007
13
8

Jsansbury
Thornston

ROE
2011 11.80%
2010 11.78%

ROA

EQUITY MULTILIER

2011 5.61%

2011 2.10%

2010 5.39%

2010 2.19%

SALES MARGIN

ASSET TURNOVER

2011 3.03%

2011 1.85 TIMES

2010 2.93%

2010 1.84 TIMES

ROE
2011 (1.31)%
2010 16.53%

ROA

EQUITY MULTILIER

2011 (0.23)%

2011

2010 3.72%

2010

SALES MARGIN

ASSET TURNOVER

2011 (0.12)%

2011 1.98TIMES

2010 2.03%

2010 1.83TIMES

EQUITY MULTILIER
2011 5.71
2010 4.44

JSAINSBURY
Group income statement
for the 52 weeks to 19 March 2011

Revenue
Cost of sales
Gross Profit
Administrative expenses
Other income
Operating profit
Finance income
Finance costs
Share of post-tax profit from joint ventures
Profit before taxation
Income tax expense
Profit for the year

2011
% sales
100.00%
94.50%
5.50%
1.98%
0.51%
4.03%
0.15%
0.55%
0.28%
3.92%
0.89%
3.03%

2010
% sales
100.00%
94.58%
5.42%
2.00%
0.14%
3.56%
0.17%
0.74%
0.69%
3.67%
0.74%
2.93%

Thorntons PLC
Consolidated income statement
52 weeks ended 25 June 2011

Revenue
Cost of sales
Gross profit
Operating expenses
Other operating income
Operating profit
Finance income
Finance costs
Profit before tax
Taxation
Profit for the year

2011
2010
% sales
% Sales
100.00%
100.00%
-53.84%
-50.34%
46.16%
49.66%
-46.53%
-46.77%
0.77%
0.65%
0.39%
3.53%
0.01%
0.10%
-0.89%
-0.77%
0.00%
0.00%
-0.49%
2.86%
0.37%
-0.83%
-0.12%
2.03%