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Financial Information Analyse Report.

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Introduction

Financial Information Analyses Report SAMPLE For Morrison (w) PLC. (WRW.L) For the 52 weeks ended 2 February 2003 Written by Lin zhang 26.FEB.2004 Company History Morrison (w) PLC.was founded in 1899 by William Morrison, father of current chairman, Ken Morrison. From its origins as an egg and butter merchant in Bradford, West Yorkshire, the company developed into market stalls and on to counter service. Progress was such that in 1958, a small town centre shop was opened. In the 1960s, Morrisons was at the forefront of supermarket development, opening its first store, "Victoria", in Bradford in 1961. And In 1967, Morrisons became a public company and was more than 174 times over-subscribed as over 80,000 investors tried to purchase shares. The company has since achieved a 35 year unbroken track record of sales and profit growth and in April 2001 joined the FTSE 100 for the first time. Today, the principal activity of the company is retail distribution. And Morrisons is the country's fifth largest supermarket chain, with an annual turnover of over 3.9 billion. There are 126 Morrisons supermarkets - from Erith in the South to Carlisle in the North, and across, Yorkshire, Lincolnshire, East Anglia, the Midlands, Lancashire, Cheshire, and into Wales. ...read more.

Middle

A ROCE value depends on the industry, the management, the economy and so on. In general, the company has increase the ROCE compared with 2002, because profit increased faster than the capital employed did. The Return on Total Assets Ratio (ROTA) has a similar meaning to ROCE. Morrison 2 Feb 2003 2Feb 2002 �M �M Profit before interest and taxation 276.6 243 Total Fixed Assets 1608.6 1452.4 Total Current Assets 384 328 ROTA 13.88% 13.65% Well, we can see a slight difference between ROCE and ROTA between the two years. This because Morrison does not borrow any money from the banks, so the company does not need to pay the interest. The total assets increased stabled and no interest to pay, as a result the ROTA and ROCE are similar. This is not a good example to show how we need to take out the impact of interest and tax if we want to understand how well the operational managers have done with their assets. 3. Working Capital Management analyze Current Assets At 2 February 2003 At 3 February 2002 �M �M Stocks - goods for resale 136.4 125.4 Debtors 22.4 13.6 Interest pre-payment 0.2 0.2 Deposits - overnight 43.6 48.1 - Longer term 173.5 133.8 Cash in ...read more.

Conclusion

Investment 1.Dividend According to the directors propose to recommend a final dividend of 2.25p per ordinary share. The total dividend in the period will be 2.70p per ordinary share compared to 2.20p per ordinary share in 2002, an increase of 22.7%. The new market price is 245p per share, So Dividend yield=2.7/245=1.1%. The dividend yields seem to be rather low and the yield of Morrison (w) PLC is representative of the overall market. But why would shareholders accept such low yields? The answer is that shareholders are more concerned with capital gains, i.e. increases in the share price, rather than the dividend they might receive. 2. Earnings per share The earnings per share are based on the profit for the financial period. It was 11.53p. The average number of ordinary shares in issue during the period was 1,554,853,000 (2002 1,537,431,000) or 1,581,231,000 diluted (2002 1,579,284,000) and the new market price is 245p per share. So the Price Earnings Ratio: P/E ratio for Morrison this year is 245/11.53=21.25. It is not too high to invest and in general if the P/E ratio around 20, it means the company may be worth to invest. Reference All the financial information data including the background of the Morrison PLC are taking from the Internet. Nothing from the books! The website shows as below: www.bized.ac.uk/compfact/ratios/sectionmap.htm http:/www.bl.uk/services/information/bisheets.html www.morrisons.plc.uk 0 ...read more.

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