FINANCIAL ANALYSIS AND

MANAGEMENT

REF: 201902-PDIB1-FME-HX5V04
ID NUMBER OF THE STUDENT: 15DKEDKE1018
NAME OF THE STUDENT: DENESH DHAMMIKA DISSANAYAKA
Table of Contents

1.0. Introduction...................................................................................................................................1

1.1. Introduction, Main Business Activities and Position of Waitrose PLC.................................1

1.2. Introduction to Major Competitor to the Waitrose................................................................2

2.0. Evaluation of Financial Performance of Waitrose and Sainsbury..................................................2

2.1. Evaluation of Profitability ratios...................................................................................................3

2. Analysis of Working Capital Ratios.................................................................................................4

2.3. Analysis of Gearing Ratios.............................................................................................................6

2.4. Analysis of Solvency ratios.............................................................................................................7

3.0. Strategic and Operational Issues with Recommendations...............................................................8

4.0. Limitations and Assumptions with the given task..........................................................................11

4.1. Limitations....................................................................................................................................11

4.2. Assumptions..................................................................................................................................12

5.0. Identification and Evaluation of External Finance modes............................................................12

5.1. Significant Factors to Be Considered When Choosing Mode of Finance.................................14

6.0. Weighted Average Cost of Capital (WACC)..................................................................................14

7.0. Conclusion.........................................................................................................................................15

8.0. References.........................................................................................................................................16

8.0. ANNEXURES...................................................................................................................................19

1
1.1. Introduction

1.2. Introduction, Main Business Activities and Position of Waitrose PLC

It is a chain of super market based in UK and largest employee owned retailer in England. Waitrose

partners got 353 retail shops throughout the country including 65 little Waitrose convenience retail

supermarkets with 5.1% market share. Moreover, Waitrose can be identified as sixth largest retail

network in the UK.

Their main business strategy is to improve the lives of people who grew, picked and packed help them to

reduce their poverty and establish a great income source to uplift their living conditions. In addition to

that their main aim is to provide more convenient supermarket experience with the expertise and high-

quality food shop. Therefore, Waitrose has been differentiated marketing strategy by aiming the upper

market by high quality food and services with more convenient facilities and creating a good ambience

within the supermarket.

The main competition comes from the supermarket channel called Marks and Spencer and also from the

Sainsbury who mostly aim to cater for the upper level rich customer segment. Even though how much

competition comes from the competitors, Waitrose doesn’t want to change their marketing strategies by

attracting upper economic crowd while ensuring green image, environmentally friendly packing and bag

for life (Waitrose & Partners, 2019).

1.3. Introduction to Major Competitor to the Waitrose

Sainsbury PLC is among one of leading and largest retailers in United Kingdom. Their main

business strategy is do the right thing for customers, communities, colleagues, suppliers and also

for the planet. Therefore, they are mainly concern about their sustainability plan and how can

they make positive impact to the environment, economy and society. They are highly concern

about customer healthy eating habits, by providing quality of foods and excellent services. Their

2
main business strategy is to be the most trusted retailer where people love to shop. Apart from

the retail industry they are catering clothing, general merchandising and financial services.

Providing foods can be seen their heartland and their strategies are to meet the challenges of

catering reasonable prices, excellent quality more enjoyable and inspiring nutrition to the society

(Sainsbury, 2019).

2.0. Evaluation of Financial Performance of Waitrose and Sainsbury

Business evaluation by using ratios is a quantitative technique and one of the significant

techniques for business evaluations from aspects of liquidity, gearing, efficiency and also

investor and shareholder indexes. Therefore, the importance of reviewing financial

information’s by using ratios will benefit to the organizational management, investors, suppliers,

bankers and lenders, investors and all other stake holders.

2.1. Evaluation of Profitability ratios

Evaluating profitability ratios between Waitrose and Sainsbury are follows and by analyzing

these ratios mainly focus on how effectively and efficiently manage their trading operations and

how productively they have generated profits from limited resources.

Profitability Ratios of Waitrose PLC

Year 2014 2015 2016 2017 2018
GP Ratio 33% 34% 34% 34% 33%
Net Profit Ratio 4% 4% 4% 5% 2%
ROCE 24% 30% 26% 32% 11%
Return on SH Investment 6% 9% 12% 17% 3%
Return on Total Assets 8% 8% 9% 10% 4%
Net asset turnover 5.07 6.39 4.72 4.88 4.41

3
 Profitability Ratios of Sainsbury PLC
Year 2014 2015 2016 2017 2018
GP Ratio 6% 5% 6% 6% 7%
Net Profit Ratio 4% 0% 2% 2% 1%
ROCE 17% 1% 11% 9% 7%
Return on SH Investment 12% -3% 8% 6% 4%
Return on Total Assets 6% 0% 4% 3% 2%
Net asset turnover 3.99 4.29 3.69 3.82 3.84

Note – Refer Annexure I, II, III, IV for the detailed P&L and Balance sheet of two companies.

There are certain profitability ratios have been calculated in order to evaluate two competitive

organization’s named Waitrose and Sainsbury’s operational efficiency and profitability.

Profitability ratios are crucial to top management for evaluating their progress with the budgeted

figures, banks and financial institutions to evaluate credit worthiness and investor to make their

investments with a return.

By evaluating both entity GP and NP ratios, Waitrose indexes are quite safer and their

operational efficiency is considerably higher compared to Sainsbury. Sainsbury is having low GP

and NP margins and indicate weaknesses in operational management. Moreover, gross profit of

Sainsbury may not enough to cover their general administration cost and interest payments due

to less GP margin and this might lead to decrease their business value and credit worthiness.

Furthermore, since Sainsbury had recorded a low GP ratio, their NP also had recorded a very low

index during the five-year period, which could result in working capital issues (Wahlen,

Baginski & Bradshaw, 2010).

2. Analysis of Working Capital Ratios

4
Working capital ratios refers to ability to settle their current liabilities with available current

assets. Generally, organizations are used to settle their current liabilities by cash and cash

equivalent balances and also if there are any marketable securities that can be quickly liquidated

to settle their current liabilities. Firms don’t want to struck liquidity funds unnecessarily by

having them in cash and cash equivalent due to opportunity cost for the stagnating funds are

higher and there is a cost of funds.

There are several working capital ratios are calculated pertaining to the Waitrose PLC and

Sainsbury PLC with the available data are as follows (Preve & Sarria-Allende, 2010). 

Working Capital Ratios of Waitrose PLC

Year 2014 2015 2016 2017 2018
Current Ratio 67% 69% 83% 89% 91%
Quick Ratio 34% 35% 49% 55% 55%
Stock Days ratio 11.25 11.33 10.71 10.62 10.61
Stock Days 32.44 32.22 34.07 34.38 34.40
Debtor Days 9.13 7.85 8.38 8.84 9.36
Creditor Days 91.10 85.97 91.64 90.16 87.41
Current asset T/O ratio 7.92 8.27 6.35 6.16 6.04

Working Capital Ratios of Sainsbury PLC

Year 2014 2015 2016 2017 2018
Current Ratio 64% 64% 66% 74% 76%
Quick Ratio 50% 49% 51% 53% 59%
Stock Days ratio 22.65 22.54 22.44 17.93 14.83
Stock Days 16.11 16.19 16.26 20.36 24.62
Debtor Days 6.60 7.23 7.89 7.99 9.54
Creditor Days 43.55 47.89 50.93 55.53 59.36
Current asset T/O ratio 5.49 5.38 5.33 4.15 3.62

Note – Refer Annexure I, II, III, IV for the detailed P&L and Balance sheet of two companies.

5
Both entities current asset ratio is not a good position throughout the period of 2014 to 2018,

However there is an increasing trend of ratio getting better when it comes to year of 2018. And

also, current asset ratio calculation by removing inventory from current assets Vs current

liabilities are in a moderate percentage of both companies. Sainsbury PLC stock movement is

high compared to Waitrose PLC during the period means they are making quick cash form their

inventories and this leads to sound working capital management practices. Both entities debtor

days are very less leads to have excellent working capital management practices and less

liquidity problems. In order to settle trade creditors Waitrose is taking more than three months

whereas Sainsbury is taking less than two months. This depicts a Waitrose is taking some extra

time to settle their creditor and it could be a good working capital management practices as well

as Sainsbury also having a moderate time period of settling creditors. Making revenues from

their current assets are in a good position by Waitrose compared to Sainsbury PLC (Ambrose

and Seward, 1988).

2.3. Analysis of Gearing Ratios

Gearing is used to evaluate financial fitness and it shows the relationship between owner’s

capital and debt equity of the entity. High gearing shows company is having a larger amount of

debt capital than equity and it is not a healthy index to the entity and balance between debt and

equity capital is appropriate to any firm. With respect to the both Waitrose and Sainsbury PLC’s

financial information’s some of gearing ratios are calculated as follows.

Gearing Ratios – Waitrose PLC

Year 2014 2015 2016 2017 2018
Gearing Ratio 53% 63% 53% 54% 47%
Interest Cover 4.34 4.39 5.27 5.92 2.91

6
 Debt Equity ratio 1.14 1.74 1.11 1.17 0.90

Gearing Ratios of Sainsbury PLC

Year 2014 2015 2016 2017 2018
Gearing Ratio 39% 42% 40% 40% 38%
Interest Cover 6.35 0.45 4.23 4.72 3.70
Debt equity ratio 0.63 0.74 0.61 0.62 0.58

Compared to Sainsbury, Waitrose is highly geared from 2014 and in the year of 2018, it had

been neutralized by bringing its gearing ratio into just less than 50%. On the other hand, both

entities are having a moderate rate of interest cover during the period, except 2015 Sainsbury’s

sudden drop in operational profit. Debt equity ratio of Waitrose is slightly higher than 1 and it

shows more debts had been funded than equity which is not a good sign for the entity’s long last,

whereas Sainsbury depicts a healthy debt equity rate and compared to Waitrose also their capital

structure is safer (Zimmerman, 2010).

2.4. Analysis of Solvency ratios

With the solvency ratio it can be measured that company’s ability to settle its total financial

commitments in due course. Both Waitrose PLC and Sainsbury financial figures are evaluated

and followings solvency rations are being calculated.

Solvency Ratios- Waitrose PLC

Year 2014 2015 2016 2017 2018
Equity ratio for assets 32% 26% 33% 33% 37%
Financial leverage 2.96 3.45 3.37 3.03 2.87
Total Debt ratio 210% 286% 201% 206% 170%

Solvency Ratios- Sainsbury PLC

Year 2014 2015 2016 2017 2018

7
 Equity ratio for assets 36% 33% 38% 35% 34%
Financial leverage 2.47 2.87 2.82 2.77 2.92
Total Debt ratio 175% 199% 167% 187% 197%

Equity ratio for assets represents percentage of assets for equity. By evaluating this ratio both

entities are having less assets compared to equity. And also, financial leverage depicts average

financial assets against average equity and both entities are having a moderate amount of

financial leverage. Total debt ratio is much higher in Waitrose PLC and also it is considerably

higher in Sainsbury PLC as well. That leads to high dependency on outside lenders and increase

in finance commitments.

3.0. Strategic and Operational Issues with Recommendations

1) Lack of Financial Management Planning

When analyze financial figures by using ratios, it can be seen that both organization’s

financial management planning is not in a strong position. Some of planning weaknesses

are illustrated herewith. Waitrose PLC that have marked just above 30% average gross

profit margin hadn’t been unable to maintain an enough net profit margin which is less

than 5% throughout the period. On the other hand, Sainsbury’s had gained a lesser

amount of gross profit margin and very poor net profit margin. Main reasons could be

lack of planning on supply chain management, resource wastages, extra employees

deployed for the operations and lack of policy and procedure controls. In addition to that

the Waitrose PLC is highly geared with debt capital refers to lack of capital management

planning on fund sources.

8
 Therefore, steps should be taken to have excellent planning on working capital

management, increase operational efficiency, restructure of capital structure will be

worthwhile to both organization’s continuous succession (Wahlen, Baginski &

Bradshaw, 2010).

2) Lack of Budgeting controls, forecasting and monitoring

With the financial management planning budgeting, forecasting and continuous

monitoring of figures should be in place in order to have a smooth operation in the

business. Since there are ample fluctuations in financial figures in both entities,

management should have a proper budgeting and performance monitoring mechanism to

maximize organizational goals. Identification of weaknesses, deviations and loopholes of

business processes also should be taken into account to have a healthy financial

background.

3) Lack of performance monitoring mechanism

If there are changes in key performance indicators during previous years, immediate

actions should be taken to identify those and rectify with immediate effect in order to

maintain and uplift organizational performances. When we analyze both company ratio

indexes such as fluctuation in GP and NP ratios, fluctuations in ROCE, decreasing trend

in net asset turnover and reducing percentage of gearing ratio throughout the five years,

9
 there is no strong upward trend for those key performance indicators which might lead to

get things worsen in due course.

Therefore, early detection of risks and business threats by continuous monitoring of

financial progress of both entity top managers will be extremely worthwhile for

organizational success (Berk, Jonathan and Harford, 2009).

4) Significant operational management issues

There are declining indexes of both entity operational performances, especially Sainsbury

PLC had recorded a lesser GP margin throughout the period may result they hadn’t got

enough funds to bear their administrative cost and this leads to huge working capital

issues such as unable to pay committed payments and interest payments to lenders.

Therefore, both entities have to uplift their operational management efficiency in order to

gain higher GP margin and NP margins. Moreover, maximizing of resource utilization

and allocation proper staff at different levels are more beneficial to reach set goals.

4.0. Limitations and Assumptions with the given task

There are some of obstacles were there, when calculating and evaluating both organization’s

financial reports and when ever necessary some of assumptions were made in order to carry out

the task.

4.1. Limitations

 Non availability of enough financial information’s – basically all the information’s are

not available with the annual reports and it hinders to get correct data for analyzing and

10
 comparisons. Due to that some of key ratios especially important for investors were

unable to calculate such as EPS, P/E ratio and Dividend yield.

 Budgeted information’s and forecasts were not available for get a clear picture about

where things could have gone wrong.

 There is no break up for Cost of Sales and administration and distribution cost for

evaluating for what expenses company had beard a significant amount.

 Historical data are used to evaluate financial progress and performance is not a strong

technique for business evaluation.

 Annual inflation hasn’t been taken into account for the financial figures

 Entire interest cost had been considered as interest for fund sourcing

 Financial figures can be manipulated badly with the discretion of management and ratios

might not give a clear picture about the organization performances.

 Changes in business strategies and business restructuring can be badly affected for data

comparisons.

 Qualitative factors as value of human capital, cooperate social responsibility activities,

value of brands is totally disregarded with the ratio analysis.

 Different accounting policies could have been adopted by both companies and because of

that comparability of financial figures will not be a fruitful technique.

4.2. Assumptions

 Total sales revenues derived from credit sales

 Finance cost includes only borrowing cost

11
  There is no operational changes or business restructuring in both organization’s during

the period

 There is no impact to the financial figures from inflation throughout the period

 Trading inventories will be sold out with the lead time

5.0. Identification and Evaluation of External Finance modes

1. Equity Shares – this is the main source of business finance in public limited companies

and private limited companies. Public listed companies can raise required capital by

issuing shares to the general public whenever they required. This a considerably high cost

mode of business finances and by issuing shares current ownership of owners tend to

dilute and for that management of the organization can decide a reasonable share price

with the evaluation of market conditions and business performances.

 Advantages of Issuing Shares – the main advantage of raining funds from

issuing share is there is no committed return payment to shareholder’s and only

profits are distributed to them with the declaration of shareholder at an annual

general meeting.

 Disadvantages of Issuing shares – there is a huge operational cost pertaining to

issuing shares and higher number of legal requirements are to be fulfilled before

issuing share to the public. Moreover, dividends are not considered as a tax-

deductible expense.

12
2. Preferred Stock – source of preferred stock of raising funds is attributed both equity and

debt capital features.

 Advantages – less legal requirements and low cost of issuing compared to issue

of equity shares and whenever there are business losses respective dividends can

be postponed to future.

 Disadvantage – dividends for preferred stock holders can be delayed for future,

whenever company had made losses and it will affect negatively to the cash flow.

Furthermore, organization is committed to pay them an agreed rate of return even

there are issues in cash flows and preference dividends are not tax-deductible

expense.

3. Issue of Debentures – this is a source of debt capital and an agreed rate of interest

payment is liable to pay regularly.

 Advantages – this is a considerably quick and convenient way of raising finance

to the entity and the particular interest payment is a tax-deductible expense.

 Disadvantages – if it is highly geared, there could be some influences to the

business operation from debenture holders and based on the performance of the

organization investors could have rejected to purchase debentures.

4. Term Loans – obtaining long term and short-term loan facilities are come under this type

of finances. Usually bank and financial institutions are dealing with this type of finance

modes.

 Advantages – more convenient and very quickly can raise funds and if the

finance service provider just agrees without fulfilling other requirements, they can

obtain the facility. And also interest for the term loan is a tax-deductible expense.

13
  Disadvantages – there may be strict conditions to be fulfilled with the term loan

and confidential information has be given upon request by the service provider.

(Higgins, 1977)

5.1. Significant Factors to Be Considered When Choosing Mode of Finance

 Weighted average cost of capital in the organization.

 Effects of dilution to ownership

 How quickly and conveniently can get the service

 Additional conditions and requirement to be fulfilled

 What sort of confidential information’s are requesting by the service provider?

 Legal requirements to be fulfilled

 Cost of obtaining funds

 Applicable interest rates

(Chowdhry, 2007)

6.0. Weighted Average Cost of Capital (WACC)

By giving a proportionate weightage on organisational current source of funds WACC can be

calculated. Basically, this is important for organisation to decide the minimum of margins that

has to be earned in order to cover their cost of funds and make additional profits and also to

evaluate best finance options with cheaper rates. In addition to that investors can make an

assessment on return to their investment.

With the rate of WACC organisations can structured their capital structure and with the changes

in market scenarios organisation can clearly plan their short-term borrowings and long term

14
borrowing in order to minimise cost of borrowings a maximize profits. In addition to that

allocation of resources based on the WACC is highly beneficial to have an excellent credit

worthiness to the organisation (Atrill, 2012).

7.0. Conclusion

Waitrose PLC and Sainsbury PLC are leading retailer networks operating in UK by providing

good quality products and services to the customers. Financial performance of Waitrose PLC

was compared with the Sainsbury PLC for a period of five years starting from 2014, by using

accounting ratios and certain outstanding performances and deviations were reported in order to

recognize the best performing entity.

With respect to the business evaluation, certain strategic and operational issues and gaps were

identified best recommendations were given in order to line up those issues and make corrective

actions. When carrying out the task there were several limitations which hindered quality of the

task and some of assumptions had to make due to the unavailability of required information’s.

Finally, importance of WACC was evaluated in order to find best finance options for

organizational short term and long-term fund requirements.

15
8.0. References

1) Baskin, J. and Paul, J. (1997), A History of Corporate Finance. New York: Cambridge

University Press.

2) Waitrose & Partners, (2019), https://www.waitrose.com/. [Electronically accessed 16th

April, 2019.]

3) Sainsbury, 2019, Live well for less, says SAINSBURY. https://www.sainsburys.co.uk/.

[Electronically accessed 16th April, 2019.]

4) Brealey, R. (1999), Principles of Corporate Finance. 6th ed. New York: McGraw-Hill.

5) Lee, A., Lee, J., & Lee, C. (2009), Financial Analysis, Planning & Forecasting: Theory

and Application, 2nd ed. Singapore: World Scientific.

6) Subramanyam, K. & Wild, J. (2013), Financial Statement Analysis, 11th ed. New York:

McGraw-Hill.

7) Tennent, J. (2008), Guide to Financial Management, 1st ed. London: Profile Books.

8) Albrecht, W.S., Stice, E., Stice, J. & Swain, M. (2010), Accounting: Concepts and

Applications, 11th ed. Mason-OH: South-Western.

16
9) Axson, D. (2010), Best Practices in Planning and Performance Management: Radically

Rethinking Management for a Volatile World, 3rd ed. Hoboken, NJ: John Wiley & Sons.

10) Preve, L. & Sarria-Allende, V. (2010), Working Capital Management, 1st ed. New York,

NY:  Oxford University Press.

11) Weil, R., Schipper, K., & Francis, J. (2012), Financial Accounting: An Introduction to

Concepts, Methods and Uses, 14th ed. Mason, OH: South-Western.

12) Zimmerman, J. (2010), Accounting for Decision Making and Control, 7th ed. New York,

NY: McGraw-Hill.

13) Wahlen, J., Baginski, S., & Bradshaw, M. (2010), Financial Reporting, Financial

Statement Analysis and Valuation: A Strategic Perspective, 7th ed. Mason, OH:  South-

Western.

14) Berk, Jonathan, P. DeMarzo, and J. Harford. (2009), Fundamentals of Corporate

Finance. New York: Pearson Education.

15) Brigham, Eugene F., and Houston, J. F. (2009), Fundamentals of Financial Management.

12th ed. Ohio: South-Western College Publishing.

16) Higgins, R. (1977), Financial Management: Theory and Applications. Chicago: Science

Research Associates.

17) Ittelson, Thomas R. (2009), Financial Statements: A Step-by-Step Guide to

Understanding and Creating Financial Reports: Career Press.

18) Ambrose, J. and Seward, J. (1988), “Best’s Ratings, Financial Ratios and Prior

Probabilities in Insolvency Prediction.” Journal of Risk and Insurance, Vol.55, No. 2, pp.

229–44

17
19) Atrill, P. (2012), Financial management for decision makers. Harlow, England: Prentice

Hall.

20) Tracy, A. (2012), Ration Analysis Fundamentals. Available from:

https://books.google.lk/books?id=GadRYnALi-

oC&printsec=frontcover&dq=accounting+ratio+analysis&hl=en&sa=X&ved=0ahUKEwi

KwZmmuePhAhXUXSsKHSAxAa8Q6AEIJjAA#v=onepage&q=accounting%20ratio

%20analysis&f=false [Electronically accessed 16th April,2019.]

21) Chowdhry, A. (2007), Fundamentals of Accounting & Financial Analysis. India: Pearson

education. https://books.google.lk/books?

id=sURgbyuyOpMC&pg=PA197&dq=accounting+ratio+analysis&hl=en&sa=X&ved=0

ahUKEwiKwZmmuePhAhXUXSsKHSAxAa8Q6AEIMTAC#v=onepage&q=accounting

%20ratio%20analysis&f=false [Electronically accessed 16th April,2019.]

22) Feldman, M. and Libman, A. (2007), Crash courses in Accounting and Financial

statement analysis. 2nd ed. Canada: John Wiley & Sons, Inc.

https://books.google.lk/books?

id=LlKM2JWZQq8C&printsec=frontcover&dq=accounting+ratio+analysis&hl=en&sa=

X&ved=0ahUKEwiKwZmmuePhAhXUXSsKHSAxAa8Q6AEIRzAG#v=onepage&q=ac

counting%20ratio%20analysis&f=false [Electronically accessed 20th April,2019.]

18
8.0. ANNEXURES

ANNEXURES I - Waitrose Profit & Loss Statement for the period of 2014 to 2018

Profit & Loss Statements

2014 2015 2016 2017 2018
10,171.5 10,942.6 11,018.8 11,374.2 11,597.7
Gross Sales 0 0 0 0 0

9,027.8 9,701.0 9,748.8 10,026.2 10,204.0

Revenue 0 0 0 0 0
(6,008.9 (6,426.9 (6,442.1 (6,633.1 (6,839.5
COS 0) 0) 0) 0) 0)
3,018.9 3,274.1 3,306.7 3,393.1 3,364.5
GP 0 0 0 0 0
74.2 86.1 85.2 92.6 111.3
Other operating income 0 0 0 0 0
(2,622.2 (2,917.9 (2,989.8 (3,007.8 (3,114.0
Operating expenses before exceptional item 0) 0) 0) 0) 0)
0.3 (1.0
Share of (loss)/profit of joint venture (net of tax) - - - 0 0)
470.9 442.3 402.1 478.2 360.8
Operating profit before exceptional item 0 0 0 0 0
(47.3 7.9 129.3 171.2 (111.3
Exceptional item 0) 0 0 0 0)
423.6 450.2 531.4 649.4 249.5
Operating profit 0 0 0 0 0

19
 (97.5 (102.5 (100.8 (109.7 (85.7
Finance costs 0) 0) 0) 0) 0)
3.0 2.9 4.2 1.9 14.1
Finance income 0 0 0 0 0
329.1 350.6 434.8 541.6 177.9
Profit before Partnership Bonus and tax 0 0 0 0 0
(202.5 (156.2 (145.0 (89.4 (74.0
Partnership Bonus 0) 0) 0) 0) 0)
126.6 194.4 289.8 452.2 103.9
Profit before tax 0 0 0 0 0
(25.0 (50.9 (66.6 (98.7 (29.8
Taxation 0) 0) 0) 0) 0)
101.6 143.5 223.2 353.5 74.1
Profit for the year 0 0 0 0 0

376.4 342.7 305.5 370.4 289.2

Profit before Partnership Bonus, tax and exceptional item 0 0 0 0 0

ANNEXURE II - Waitrose Balance sheet for the period of 2014 to 2018

Balance Sheet for the Period of 2014 to 2018

2014 2015 2016 2017 2018
Non-current assets
266. 335. 388. 432. 495.
Intangible assets 90 50 40 70 70
3,987. 4,160. 4,189. 4,112. 3,971.
Property, plant and equipment 20 10 30 40 20
61. 62. 65. 61. 65.
Trade and other receivables 30 70 70 20 30
0.
Derivative financial instruments - - - 10 -
Investment in and loans to joint 3. 2.
venture - - - 90 90
69. 123. 33. 48. 25.
Deferred tax asset 10 80 60 20 50
4,384. 4,682. 4,677. 4,658. 4,560.
50 10 00 50 60
Current assets
554. 580. 621. 627. 661.
Inventories 00 70 90 80 50
225. 208. 223. 242. 261.
Trade and other receivables 90 60 90 70 70

20
 18.
Current tax receivable - 90 -
0. 9. 11. 15. 5.
Derivative financial instruments 70 60 50 30 20
15. 8.
Assets held for sale - 70 - 10 -
10. 60. 120.
Short-term investments - - 00 00 00
358. 339. 667. 673. 642.
Cash and cash equivalents 90 80 40 70 20
1,139. 1,173. 1,534. 1,627. 1,690.
50 30 70 60 60
5,524. 5,855. 6,211. 6,286. 6,251.
Total assets 00 40 70 10 20
Current liabilities
(75.6 (61.4 (57.7 (0.1
Borrowings and overdrafts 0) 0) 0) - 0)
(0.2 (27.1 (19.6 (10.7
Current tax payable 0) - 0) 0) 0)
(1,499.7 (1,513.7 (1,617.4 (1,638.5 (1,637.9
Trade and other payables 0) 0) 0) 0) 0)
(3.3 (3.1 (2.6 (1.2 (0.7
Finance lease liabilities 0) 0) 0) 0) 0)
(120.9 (110.1 (141.6 (167.7 (187.8
Provisions 0) 0) 0) 0) 0)
(5.9 (6.6 (2.3 (7.2 (19.8
Derivative financial instruments 0) 0) 0) 0) 0)
(1,705.6 (1,694.9 (1,848.7 (1,834.2 (1,857.0
0) 0) 0) 0) 0)
Non-current liabilities
(728.2 (1,030.2 (974.1 (966.9 (936.7
Borrowings 0) 0) 0) 0) 0)
(135.5 (175.9 (209.3 (219.7 (223.4
Trade and other payables 0) 0) 0) 0) 0)
(32.4 (28.3 (24.7 (23.3 (22.6
Finance lease liabilities 0) 0) 0) 0) 0)
(137.2 (158.0 (148.2 (171.8 (157.9
Provisions 0) 0) 0) 0) 0)
(1.1 (4.0
Derivative financial instruments - - - 0) 0)
(1,003.4 (1,249.3 (941.6 (1,013.7 (731.3
Retirement benefit obligations 0) 0) 0) 0) 0)
(6.1
Deferred tax liability - - - - 0)
(2,036.7 (2,641.7 (2,297.9 (2,396.5 (2,082.0
0) 0) 0) 0) 0)
Total liabilities 3,742. (4,336.6 (4,146.6 (4,230.7 (3,939.0

21
 30 0) 0) 0) 0)
1,781. 1,518. 2,065. 2,055. 2,312.
Net assets 70 80 10 40 20
Equity
0. 0. 0. 6. 6.
Share capital 60 60 60 00 00

Share premium -
0. 8. 15. 14. (10.6
Other reserves 80 80 40 00 0)
1,780. 1,509. 2,049. 2,040. 2,322.
Retained earnings 30 40 10 80 20
1,781. 1,518. 2,065. 2,055. 2,312.
Total equity 70 80 10 40 20

ANNEXURE III – P&L – Sainsbury for the period of 2014 to 2018

Profit & Loss Statement- SAINSBURY

2014 2015 2016 2017 2018
Revenue 23,949.00 23,775.00 23,506.00 26,224.00 28,456.00
(22,562.0 (22,567.0 (22,050.0 (24,590.0 (26,574.0
Cost of Sales 0) 0) 0) 0) 0)
1,387.0 1,208.0 1,456.0 1,634.0 1,882.0
Gross Profit 0 0 0 0 0
(444.00 (1,132.0 (850.00 (1,207.0 (1,415.0
Administrative Expenses ) 0) ) 0) 0)
66.0 101.0 215.0 51.0
Other Income 0 5.00 0 0 0
1,009.0 81.0 707.0 642.0 518.0
Operating Profit 0 0 0 0 0
20.0 19.0 19.0 34.0 19.0
Finance Income 0 0 0 0 0
(159.00 (180.00 (167.00 (136.00 (140.00
Finance Cost ) ) ) ) )
Share of PT profit from JV and 28.0 (11.00 (37.00 12.0
Associates 0 8.00 ) ) 0
898.0 (72.00 548.0 503.0 409.0
Profit before taxation 0 ) 0 0 0
(182.00 (94.00 (77.00 (126.00 (100.00
Income Tax expense ) ) ) ) )
716.0 (166.00 471.0 377.0 309.0
Profit for the financial year 0 ) 0 0 0

Basic earnings per share 37.7 (8.70 23.9 17.5 13.3

22
 0 ) 0 0 0
36.9 (8.70 22.5 16.5 12.7
Diluted earnings per share 0 ) 0 0 0

ANNEXURE IV – Balance Sheet for the Period of 2014 to 2018- SAINSBURY

Balance Sheet for the Period of 2014 to 2018- SAINSBURY

2014 2015 2016 2017 2018
Non-Current Assets
9,880.0 9,648.0 9,764.0 10,006.0 9,898.0
PPE 0 0 0 0 0
286.0 325.0 329.0 742.0 1,072.0
Intangible Assets 0 0 0 0 0
404.0 359.0 327.0 237.0 232.0
Investment in JV & Associates 0 0 0 0 0
255.0 184.0 340.0 435.0 540.0
Available for sale- Financial assets 0 0 0 0 0
26.0 83.0 103.0 69.0
Other receivables 0 0 0 0 44.00
Amount due from Sainsbury bank 1,292.0 1,412.0 1,649.0 1,916.0 2,332.0
customers 0 0 0 0 0
28.0 21.0 17.0 10.0
Derivative Financial Instruments 0 0 0 0 17.00
12,171.0 12,032.0 12,529.0 13,415.0 14,135.0
0 0 0 0 0
Current Assets
1,005.0 997.0 968.0 1,775.0 1,810.0
Inventories 0 0 0 0 0
433.0 471.0 508.0 574.0 744.0
Trade & Other Receivables 0 0 0 0 0
Amount due from Sainsbury bank 1,283.0 1,599.0 1,695.0 2,686.0 3,360.0
customers 0 0 0 0 0
48.0 100.0 203.0
Available for sale- Financial assets - - 0 0 0

23
 49.0 69.0 51.0 94.0
Derivative Financial Instruments 0 0 0 0 10.00
1,592.0 1,285.0 1,143.0 1,083.0 1,730.0
Cash & Cash Equivalents 0 0 0 0 0
4,362.0 4,421.0 4,413.0 6,312.0 7,857.0
0 0 0 0 0
7.0 84.0 31.0 10.0
Non-current assets held for sale 0 0 0 0 9.00
4,369.0 4,505.0 4,444.0 6,322.0 7,866.0
0 0 0 0 0
16,540.0 16,537.0 16,973.0 19,737.0 22,001.0
Total Assets 0 0 0 0 0
Current Liabilities
(2,692.0 (2,961.0 (3,077.0 (3,741.0 (4,322.0
Trade & Other Payables 0) 0) 0) 0) 0)
(3,245.0 (3,395.0 (3,173.0 (4,284.0 (4,841.0
Amount due to Sainsbury bank customers 0) 0) 0) 0) 0)
(534.0 (260.0 (223.0 (172.0 (638.00
Borrowings 0) 0) 0) 0) )
(65.0 (75.0 (43.0 (22.0 (53.00
Derivative Financial Instruments 0) 0) 0) 0) )
(189.0 (188.0 (158.0 (219.0 (247.00
Current Tax Liabilities 0) 0) 0) 0) )
(40.0 (44.0 (46.0 (135.0 (201.00
Provisions 0) 0) 0) 0) )
(6,765.0 (6,923.0 (6,720.0 (8,573.0 (10,302.0
0) 0) 0) 0) 0)
(4.0
Liabilities held for sale - - 0) - -
(6,724.0 (8,573.0 (10,302.0
    0) 0) 0)
(2,396.0 (2,418.0 (2,280.0 (2,251.0 (2,436.0
Net Current Liabilities 0) 0) 0) 0) 0)
Non-Current Liabilities
(204.0 (265.0 (269.0 (304.0 (313.00
Other Payables 0) 0) 0) 0) )
(302.0 (266.0 (582.0 (637.0 (1,683.0
Amount due to Sainsbury bank customers 0) 0) 0) 0) 0)
(2,250.0 (2,506.0 (2,190.0 (2,039.0 (1,602.0
Borrowings 0) 0) 0) 0) 0)
(21.0 (38.0 (69.0 (38.0 (26.00
Derivative Financial Instruments 0) 0) 0) 0) )
(227.0 (215.0 (237.0 (172.0 (241.00
Deferred Tax Liabilities 0) 0) 0) 0) )
(29.0 (77.0 (129.0 (128.0 (166.00
Provisions 0) 0) 0) 0) )
(737.0 (708.0 (408.0 (974.0 (257.00
Retirement Benefit obligation 0) 0) 0) 0) )
(3,770.0 (4,075.0 (3,884.0 (4,292.0 (4,288.0
0) 0) 0) 0) 0)

24
 6,005.0 5,539.0 6,365.0 6,872.0 7,411.0
Net Assets 0 0 0 0 0
Equity
545.0 548.0 550.0 625.0 627.0
Issued Share Capital 0 0 0 0 0
1,091.0 1,108.0 1,114.0 1,120.0 1,130.0
Share Premium Account 0 0 0 0 0
680.0 680.0 680.0 680.0 680.0
Capital Redemption Reserve 0 0 0 0 0
568.0 568.0
Merger Reserve - - - 0 0
127.0 146.0 155.0 193.0 121.0
Other Reserves 0 0 0 0 0
3,560.0 3,057.0 3,370.0 3,190.0 3,789.0
Retained Earnings 0 0 0 0 0
6,003.0 5,539.0 5,869.0 6,376.0 6,915.0
Equity attributable to owners 0 0 0 0 0
248.0 248.0 248.0
Perpetual Capital securities - - 0 0 0
248.0 248.0 248.0
Perpetual convertible bonds - - 0 0 0
2.0
Non-Controlling Interest in Equity 0 - - - -
6,005.0 5,539.0 6,365.0 6,872.0 7,411.0
Total Equity 0 0 0 0 0

25