Morrisons supermarket - financial report - page 13
Keywords: Morrisons,Finanial report,supermarket,performance of morrisons
By maya on 02/05/2008
Level: Master's degree (MA, MBA, MSc, MEng, MRes, MPhil etc)
Page Number: 13 of 14 pages: 1 2 3 4 5 6 7 8 9 10 11 12 13 14
WM Morrison’s annual report. Due to the differences among accounting policies, user’s interpretations, operation natures and so on, the calculated outcomes may vary slightly. However, with the authors’ adjustment, the figures adopted are consistent and reliable to some degree.
Due to a series of limitation, this report could be biased to some extent.
Firstly, although ratios offer a quick and useful method of analyzing the position and performance of a business, they are not without their limitation, which are summarized as below:
Quality of financial statements: Results of ratio analysis are dependent on the quality of financial statement and results. Ratio will inherit the limitations of the financial statements on which are based. Since financial statement could be subjective and creative, and there is no standard to examine right or not.
The restricted vision of ratios: It is important not rely on ratios exclusively and thereby lose sight of information contained in the underlying financial statement. Some items reported in statements can be vital in assessing position and performance.
The basis of comparison: It is important to do comparison between like and like. However, there is no two businesses will be identical and the greater the differences between two businesses being compared, the greater the limitations of ratio analysis. Furthermore, when comparing businesses, differences in such matters as accounting policies, financing policies and financial year-ends will add to the problems of evaluation.
Balance sheet ratios: Because balance sheet is only a snapshot of the business at a particular time moment, any ratios based on balance sheer figures, such s the liquidity ratio, may not reprehensive of financial position of the business for the year as a whole.
Secondly, all the figures used in this report are mostly based on Morrison’s performance in 2004, thanks to the unavailability of 2005 year source. It could be less flexible, because it is hard to indicate Morrison’s most recent situation.
Moreover, this report is financial based, which indicates that it is more financial terms empathized. However, from an investor’s perspective, it needs to consider about broad aspects including organization structure, strategy, and management and so on.
REFERENCES:
Mclaney, E. & Atrill, P. (1999) Accounting: an introduction, Harlow: Pearson Education Limitied.
Morrison supermarkets (MRW.L) (2005) [online] Yahoo Finance, available at:
http://finance.yahoo.com/q/bc?s=MRW.L&t=5y&l=on&z=m&q=l&c=%5EGSPC [accessed on 10/12/2005]
Morrison supermarkets (MRW.L) (2005) [online] Yahoo Finance, available at:
http://finance.yahoo.com/q/bc?s=MRW.L&t=1y&l=on&z=m&q=l&c=%5EGSPC [accessed on 10/12/2005]
WM Morrison Supermarkets Plc. (2005) [online] FAME, available at:
http://fame.bvdep.com/cgi/template.dll [accessed on 10/12/2005]
WM Morrison Supermarkets
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