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MSc Management
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Module Title
Managerial Finance
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Managing Financial Performance – ACC7021
Assessment Coversheet and Feedback Form
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Course and Year
Int. MBA
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ACC7012
Module Title
Managing Financial Performance
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Jonathan Mills
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Jonathan Mills
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Jonathan Mills
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13/05/2017
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Thoroughly excellent, going beyond the brief and researching

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Question 1
A lack of breadth and depth of financial analysis techniques
accompanied by incorrect formulae or calculation without
appropriate explanation.
Poor layout or presentation in anything other than business
report style. Inadequate grammar and lacking in overall
knowledgeable synthesis.
Evidence of some financial analysis techniques but with errors
of formulae and calculation with insufficient explanation and
adequate presentation.
Attempt at a business report format with some supportive
appendices. Mainly descriptive with some attempt at synthesis.
Grammar and structure being adequate.
Wide range of financial analysis techniques evident and
supported by full disclosure of formulae and accurate
calculation in a clear format.
Presented in business report format and coherently structured.
Supported by referenced appendices. Effective and well-
reasoned narrative discussion.
An excellent range of financial analysis techniques which are
supported by full disclosure of formulae and accurate
calculation in a clear format.
Excellent business report format and well structured. Supported
by fully referenced appendices. Excellent analytical and
justified explanations showing synthesis and application.
Question 2
A lack of understanding of short term and long term decision
making techniques evident. Unable to successfully distinguish
between different cost behaviours or employ a range of

techniques to support a conclusion. Limited or no narrative.
Ability to apply some short and long term decision making
techniques. Reasonable attempt at analysis of financial and non-
financial factors, though of limited depth.
A good use of short and long term decision making techniques
applied. Good analysis of financial and non-financial factors
which support clear and well explained conclusions.
Excellent understanding of both short and long term decision
making demonstrated through the use of suitable and well
applied techniques. Thorough and detailed critical discussion of
the proposals which extensively consider both financial and
non-financial issues and conclude.
Question 3
Failure to engage with the topic and lacking credible academic
argument. No evidence of research other than internet sites of
dubious quality. Poorly structured with inadequate grammar.
Partial engagement with the topic with some limited evidence of
research. Grammar, structure and layout adequate.
Identification and conclusion of arguments surrounding the
topic with reference to credible academic citations that are fully
referenced in a bibliography. Well-structured and coherent
narrative employing above average grammar and evidencing
significant student research.
Thoroughly developed arguments with well referenced credible
academic sources. Well-structured and presented evidencing
excellent grammar and extensive student research and analysis
of the topic area.
ACC7012 Managing Financial PerformanceB T2 2016/7Final
AssessmentAttn: Mr Jonathan MillsA. Very Good
StudentS1?1?!00Financial AccountantQuestion 1Prepare a
business report for the board of directors which analyses the
performance of ARM Holdings Plc over the financial years 2013
to 2015 and recommend any action the board should take.

Your report should utilise key ratios, horizontal and vertical
analysis.
Table of Contents
INTRODUCTION 6
FINANCIAL RATIO ANALYSIS – PROFITABILITY: 6
FINANCIAL RATIO ANALYSIS – LIQUIDITY: 8
FINANCIAL RATIO ANALYSIS – EFFICIENCY: 9
FINANCIAL RATIO ANALYSIS – GEARING 11
CONCLUSION AND RECOMMENDATIONS: 12
Appendix A - Financial Ratio Analysis for ARM Holding PLC,
2013-2015 – Average and Competition Benchmarks13
Appendix B - Vertical Analysis Statement of Income for ARM
Holdings Plc 2013-2015 14
Appendix C - Vertical Analysis Comprehensive Statement of
Position for ARM Holdings Plc 2013-2015 15
Appendix D - Horizontal Analysis Statement of Income for
ARM Holdings Plc 2013-2015 16
Appendix E - Horizontal Analysis Comprehensive Statement of
Position for ARM Holdings Plc 2013-2015 18
Appendix F - INTEL and AMD Annual Statement – Key Ratios
19
Question 2 - Title
Page……………………………………………………………………
………………………………………………. 20
Introduction – Part 1 of Question 2 21
Closing Tyseley and Solihull Branch Restaurants Financial
Considerations: 21
Marginal Costing: 21
Financial Projections: 21
Timing for Potential Closing – Impact of Rental Contracts
T&C’s: 22
Non-Financial Considerations: 22
Conclusion Part 1 of Question 2: 23
Introduction – Part 2 of Question 2 23
New Solihull Restaurant Financial Considerations 23

Profit and Loss Projections: 24
Net Present Value Forecast: 24
Non-Financial Factors for New Solihull Restaurant 24
Financing the Purchase: 24
Equity Funding: 25
Debt Financing: 25
Conclusion – Part 2 of Question 2: 25
Appendix 1 – Marginal Costing for the Company 26
Appendix 2 – Solihull Marginal Costing 5-Year Profit and Loss
5-year Projection 26
Appendix 3 – Tyseley Marginal Costing 5-Year Profit and Loss
Projection27
Appendix 4 – Restaurant Branch Location Closure Scenarios 27
Appendix 5 – Balanced Scorecards for Tyseley and Solihull
Closure 29
Appendix 6 – New Solihull Restaurant Projection – Discounted
Cash Flow 30
Appendix 7 – New Solihull Restaurant Projection – Net Present
Value Calculation 30
Appendix 8 – New Solihull Restaurant Projection – Accounting
Rate of Return 31
Question 3 - Title
Page……………………………………………………………………
………………………………………………. 32
INTRODUCTION 32
Issue More Debentures: 33
Sell Investments: 34
Halving the Receivables Period: 34
Issue More Shares: 34
Conclusion 35
Appendix A – Income Statement 36
APPENDIX B – COMPREHENSIVE BALANCE SHEET 36
APPENDIX C – FINANCIAL RATIO ANALYSIS 37
APPENDIX D – INCOME STATEMENT, DEBENTURE
FUNDING ANALYSIS 39
References: 40

To Board of Directors of ARM Holding PLC
From Reporting Accountant
Date 27 March 2017INTRODUCTION
The report below discusses the financial appraisal for ARM
Holding Plc for the three fiscal years 2013-2015, utilising
horizontal, vertical as well as ratio analysis of the financial
statements as well as comparisons to competitors, INTEL and
AMD, financial ratios for the same period. The analysis show
ARM is financially sound, with high growth in the profitability
ratios including PBIT, Net Profit as well as Asset return and
turnover. Excellent liquidity and ARM can easily pay off their
debts. Efficiency is shown in the improving cash flows as well
as the improving payables, however the high retained cash
levels, possibly because of the decrease in R&D spending could
indicate indecision while making the company a possible target

for takeover or buyout.
MARKERS COMMENTS: good introduction, correct format,
excellent presentationFINANCIAL RATIO ANALYSIS –
PROFITABILITY:
Table 1 – Profitability Ratio’s
(Appendix A)
Net Profit Margin, ROCE and Return on Assets have all
doubled in the three-year period assessed reviewed, Table 1 –
Profitability Ratio’s, (Appendix A), and this is directly tied to
the PBIT which more than doubled during the same period as
indicated in Fig 1 and in the vertical analysis of PBIT shown in
Appendix B. The increase in PBIT is related to positive
increases in sales while controlling costs which have stayed
steady or only increased slightly during the same period as the
vertical analysis in Appendix B indicates.
Fig 1
The steady rise in ROCE is a good indicator that ARM
continues to increase their domination in the market segment of
mobile devices, which is 95% in 2014, (Madhu, 2014). The
average benchmark ROCE of 18.04% for ARM is more than
double the average benchmark ROCE for the two closest
competitors, INTEL and AMD. (Appendix A), and while most
investors do tend to favor companies with a stable or rising
ROCE it can also indicate that capital is not being invested
effectively and therefore not generating shareholder return. The
comparisons to ARM’s competitors needs to be cautioned as
both INTEL and AMD are heavily invested in manufacturing
whereas ARM does not employ that level of assets which can
result in inaccurate comparisons. The increase in net profit
margin seen in Appendix A, is a good indicator that ARM is
controlling their expenses year on year as shown in both the
vertical and horizontal analysis for cost entries in Appendix B
and D. The doubling of ARM’s asset turnover during the 3-year

period is indicative of the increase in sales shown in the
horizontal analysis in Appendix D however the total asset
increase shown in Appendix E is a result of the increase in cash
as well as trade receivables rather than in physical assets.
ARM’s asset turnover has remained steady for the 3-year
evaluation period with a benchmark which is significantly
below that of the competition, however once again we need to
keep in mind the different nature of the business models of
ARM’s competitors and that their figures might be inflated due
to higher depreciations figures given their higher asset levels,
(Appendix F). Further study on this would be needed to confirm
this analysis.
The gross profit results for ARM shown in Appendix A, have
remained steady for the three-year period, again indicating that
ARM’s competitors have not encroached on their market share.
Appendix C, vertical analysis of the comprehensive statement of
position and Appendix E, horizontal statement of position, both
clearly show that research and development investment in the
company has fallen quite dramatically during this period.
Careful examination of ARM’s product portfolio and especially
those products locations within the lifecycle pattern will be
required and further investment possibly needed as INTEL looks
to finally challenge ARM in the mobile field area, (Hargreaves,
2015).
While the profitability ratios, ROCE, Net Profit and Return on
Assets all indicate steady growth and a positive outlook when
compared to ARM Holding’s competitors it also shows in the
gross profit figures that research and development in the
organization is not increasing putting the company at risk of
losing market share.
MARKERS COMMENTS: good understanding and
referencingFINANCIAL RATIO ANALYSIS – LIQUIDITY:
Table 2 – Liquidity Rations
(Appendix A)

The liquidity ratios, Table 2 – Liquidity Ratio’s, and shown in
Appendix A indicate a very comfortable financial position for
ARM and a low risk to investors and lenders, a company that
can easily pay off all debts. ARM’s liquidity benchmarks also
continue to outperform the competition for the same period,
(Appendix A), however once again all three liquidity ratios
compared will be impacted by the competitions significantly
larger asset values as shown in Appendix F.
The high liquidity ratio also shows that ARM is not investing
their working capital efficiently. 45% of current assets are in
short term investments with much of that being in cash,
(Appendix C) As Fig 2 below indicates the company would have
significant better return reinvesting in the company than they do
by collecting interest as per the BOE current interest rates of
0.25%, (Bank of England, 2017).
Fig 2
Besides being inefficient, this high level of cash and low level
of company debt does and will make the company a target for
possible buyouts or takeovers.
High liquidity ratios which significantly outperform the
competition indicate a low risk company in a comfortable
financial position which is desirable for potential investors,
again however it can also have the effect of targeting the
company for possible buyouts or takeovers as well.
MARKERS COMMENTS: good
FINANCIAL RATIO ANALYSIS – EFFICIENCY:
Table 3 – Efficiency Ratio’s
(Appendix A)
ARM Holdings have managed to improve their cash flow, as
shown Fig 3 below, from negative in 2013 to positive in 2015
due to increases in the payables payment period combined with
a reduction in the inventory turnover period and a steady

receivables collection period as seen in Table 3 – Efficiency
Ratio’s and in (Appendix A).
Fig 3
The high collection period benchmark for ARM Holdings, which
is double their competition is indicative of their business model
which is moving towards royalty based payments rather than
upfront licensing payments. The royalty payments mean ARM
only receive a payment when a product, a chip, with their
design in it is sold, rather than the previous royalty license
model where they were paid a large fee upfront and then the
customer could essentially use whichever ARM product they
needed. This could explain the increasing figures seen. During
this same period, however the payable payment period has also
doubled, and again is twice the competition’s average. This
suggests that ARM has been able to secure favorable payment
conditions with their suppliers, however management needs to
be aware of a possible downside reflected in the increased
payable period and that is an increase in pricing by suppliers to
cover the extended payment terms. Evidence of this may be
reflected in the steady increase in expenses and general
administration and accrued expenses seen on the horizontal
analysis of the income and comprehensive statement sheets,
(Appendix D, E).
The inventory turnover which is decreasing, may also indicate a
lack of investment in new products or existing products
reaching their end of their life-cycle. This statement is borne
out by the 15% reduction in research and development as shown
in Appendix B.FINANCIAL RATIO ANALYSIS – GEARING
Table 4 – Financial Risk Ratios
(Appendix A)
The financial risk ratios, Table 4 above and in Appendix A both
indicate a sound, financially strong company. The gearing ratio
appears to be low, however as with all ratios we need to look at

the benchmarks in the industry and against their peers to
understand if this is unusually low or not, (Perks and Leiwy,
2013). Comparisons to the competition benchmarks over the
same period, (Intel Company Financial Information, 2017),
(Advanced Micro Devices, Inc. Company Financial Information,
2017) show that AMD’s gearing ratio is not significantly low
for their industry, outside of AMD’s high rate, which occurred
during one year and inflated the competition’s benchmark
average. A gearing ratio this low indicates a financially
conservative company, financially sound, with low debt. As
debt is so low any fluctuations in interest rates will not impact
profits. This low of a gearing ratio can indicate that growth is
slowing down and that management might be worried about
becoming over extended, (Accounting Tools, 2017), or when
taken together with a high cash position it could indicate the
company is preparing for a merger or possible takeover both of
which have been quite active in the technology industry lately,
(Fiegerman, 2017). It needs to be understood that low interest
borrowing could be achieved, based on this level of financial
strength, which would likely be more beneficial to the company
either through tax breaks, investment opportunities or using the
increased borrowing to increase profits. Whilst this does pose
risks if the interest rates were to change greatly, the financial
strength of the balance sheets would indicate the risk could be
well managed. In the end, the gearing ratio shows that there is
currently not a good balance between debt and equity.
Management should bear in mind that debt is cheap and tax
deductible whereas shareholders, in the end, cost more.
The interest cover ratio benchmark, is significantly higher than
the competitors even given AMD’s poor showing in interest
coverage ratio have a significant negative effect on average
competition benchmark with INTEL, (Appendix F). This shows
ARM is financially very healthy and stable, however it also
shows that the company is not taking advantage of growing their
business through investing their cash reserves into R&D or by
increasing debt. The cash reserves combined with a decrease in

the companies R&D spend as can be seen in the vertical
analysis, (Appendix B), could indicate either a lack of
innovation and investment or a lack of an aggressive investment
growth approach on the part of management. Trying to
understand a company from just one ratio is difficult, however
if the high interest coverage ratio, indicating large cash reserves
and low debt, are combined with the low gearing ratio some
would argue this is what a management team does when it
prepares for M&A activity.
CONCLUSION AND RECOMMENDATIONS:
The use of any one financial ratio to critique a company’s
performance or to try and plan the company’s future would be a
mistake, however by using multiple ratios over several years
and benchmarking them against their competition we can see
patterns develop which can help us make predictions and
suggestions for the future. ARM Holdings PLC is a financially
strong and stable company as indicated by the ratio analysis in
profitability, efficiency and liquidity, which show ARM
benchmarks outperforming their combined competition over the
same period. Large cash reserves and low debt combined with
stable management and a 95% market share in mobile devices is
very attractive to investors. The large cash reserves held by
ARM would at first indicate a possible war chest to expand out
of their niche market of mobile devices, directly challenging
their competitors INTEL and AMD possibly in manufacturing or
home based computers, possibly accomplishing this through a
merger or acquisition of a competitor. The lack of research and
development investment, however, negates this scenario and
points to a more troubling scenario of a technology company not
keeping pace with technological changes. This may indicate a
management team preparing itself to be bought out by another
company or it may indicate a company run by somebody other
than an experienced manager and financial team.

Appendix A - Financial Ratio Analysis for ARM Holding PLC,
2013-2015 – Average and Competition Benchmarks
Appendix B - Vertical Analysis Statement of Income for ARM
Holdings Plc 2013-2015
Statement of Comprehensive Income for the Year ended 31st
December - Vertical Analysis
2015 %
2014 %
2013 %
Revenue
100.00%
100.00%
100.00%
Cost of sales
4.06%
4.75%
5.50%
Gross Profit
95.94%
95.25%

94.50%
General Administrative
15.17%
16.26%
17.22%
Sales & Marketing
10.12%
10.84%
11.47%
Research & Development
28.71%
29.29%
44.33%
Operating Income (PBIT)
41.94%
38.86%
21.48%
Finance Expenses
0.03%
0.04%
0.03%
Finance Income
0.93%
0.98%

1.30%
Net Income Before Taxes (PBT)
42.84%
39.80%
22.75%
Taxation
7.76%
7.68%
8.09%
Net Income
35.08%
32.12%
14.67%
Appendix C - Vertical Analysis Comprehensive Statement of
Position for ARM Holdings Plc 2013-2015

Comprehensive Statement of Financial Position as of 31st
December - Vertical Analysis
2015 m
2014 m
2013 m
Non-Current Assets
Property/Plant/Equipment
2.91%
2.36%
2.05%
Goodwill
30.69%
30.86%
32.10%
Intangibles
4.34%
4.20%
5.06%
Long Term Investments
0.67%
1.45%
1.25%
Other Long Term Assets
16.67%
13.72%
11.93%
Total Non-Current Assets
55.27%

52.60%
52.39%
Current Assets
Cash and Short Term Investments
32.14%
36.74%
35.96%
Trade Receivables
10.82%
9.08%
9.84%
Inventory
0.08%
0.15%
0.18%
Prepaid Expenses
1.35%
1.30%
1.32%
Other Current Assets
0.33%
0.14%
0.31%
Total Current Assets
44.73%
47.40%
47.61%
Total Assets
100.00%

100.00%
100.00%
Current Liabilities
Trade Payable
0.60%
0.64%
0.43%
Accrued Expenses
4.75%
3.78%
5.38%
Notes Payable/Short Term Debt
0.00%
0.00%
0.00%
Current Port. Of LT Debt/Capital Leases
0.25%
0.21%
0.16%
Other Current Liabilities
6.79%
9.54%
11.14%
Total Current Liabilities
12.38%
14.17%
17.11%

Non-Current Liabilities
Provisions
0.29%
0.14%
0.09%
Long Term Debt
0.53%
0.35%
0.26%
Other Liabilities
2.01%
2.15%
2.50%
Total Non-Current Liabilities
2.83%
2.65%
2.85%
Total Liabilities
15.22%
16.81%
19.96%
Shareholders' Equity
Common Stock
0.03%

0.04%
0.04%
Additional Paid-In-Capital
1.28%
1.36%
1.10%
Retained Earnings
83.47%
81.79%
78.89%
Total Equity
84.78%
83.19%
80.04%
Total Liabilities & Shareholders' Equity
100.00%
100.00%
100.00%Appendix D - Horizontal Analysis Statement of Income
for ARM Holdings Plc 2013-2015
Statement of Comprehensive Income for the Year ended 31st
December- Horizontal Analysis
2015 %
2014 %
2013 %
Revenue
135.50%
111.28%
100.00%
Cost of sales
100.00%
96.18%

100.00%
Gross Profit
137.57%
112.16%
100.00%
General Administrative
119.43%
105.12%
100.00%
Sales & Marketing
119.51%
105.12%
100.00%
Research & Development
87.75%
73.52%
100.00%
Operating Income (PBIT)
264.56%
201.30%
100.00%
Finance Expenses
150.00%
150.00%

100.00%
Finance Income
96.77%
83.87%
100.00%
Net Income Before Taxes (PBT)
255.10%
194.65%
100.00%
Taxation
129.93%
105.71%
100.00%
Net Income
324.14%
243.70%
100.00%

Appendix E - Horizontal Analysis Comprehensive Statement of
Position for ARM Holdings Plc 2013-2015
Comprehensive Statement of Financial Position as of 31st
December- Horizontal Analysis
2015 %
2014 %
2013 %
Non-Current Assets
Property/Plant/Equipment
183.33%
129.17%
100.00%
Goodwill
123.73%
107.82%
100.00%
Intangibles
110.98%
93.12%
100.00%
Long Term Investments
69.61%
130.88%
100.00%
Other Long Term Assets

180.77%
128.90%
100.00%
Total Non-Current Assets
136.54%
112.58%
100.00%
Current Assets
Cash and Short Term Investments
115.67%
114.56%
100.00%
Trade Receivables
142.37%
103.47%
100.00%
Inventory
60.00%
90.00%
100.00%
Prepaid Expenses
132.26%
110.14%
100.00%
Other Current Assets
135.29%
50.98%
100.00%
Total Current Assets

121.56%
111.52%
100.00%
Total Assets
129.41%
112.13%
100.00%
Current Liabilities
Trade Payable
181.43%
167.14%
100.00%
Accrued Expenses
114.30%
78.77%
100.00%
Notes Payable/Short Term Debt
0.00%
0.00%
100.00%
Current Port. Of LT Debt/Capital Leases
192.59%
144.44%
100.00%
Other Current Liabilities
78.85%
96.05%
100.00%

93.65%
92.86%
100.00%
Non-Current Liabilities
Provisions
5.81%
173.33%
100.00%
Long Term Debt
269.05%
154.76%
100.00%
Other Liabilities
104.15%
96.34%
100.00%
Total Non-Current Liabilities
128.69%
104.07%
100.00%
Total Liabilities
98.65%
94.46%
100.00%
Shareholders' Equity

Common Stock
100.00%
100.00%
100.00%
Additional Paid-In-Capital
150.28%
137.57%
100.00%
Retained Earnings
136.83%
116.25%
100.00%
Total Equity
137.07%
116.54%
100.00%
Total Liabilities & Shareholders' Equity
129.41%
112.13%
100.00%Appendix F - INTEL and AMD Annual Statement –
Key Ratios
AssessmentAttn: Professor Jonathan MillsDavid J
ManderfeldS16146600Financial AccountantQuestion 2Part 1 -
With consideration of both financial and non-financial factors,

advise management on whether or not to close the Tyseley and
Solihull restaurantsPart 2 - Advise management whether or not
to proceed with the opportunity to open a second restaurant in
Solihull. Your answer should include consideration of financial
and non-financial information available to you, make use of an
investment appraisal technique, explain the limitations of your
analysis and analyse potential sources of finance for the
investment.
To Management Team – Tuesday’s Restaurants
Date 27 March 2017
Introduction – Part 1 of Question 2
The recommendations regarding the possible closing of the
Tyseley and Solihull branch locations has been completed using
financial and non-financial analysis information, which has
been outlined in Appendix’s 1 – 5 at the end of this report.
Financial analysis has included marginal costing for the entire
company, based on information provided, as well as conducting
five-year profit loss projections for each branch under closure
consideration. Four separate location closure cost calculations
have been conducted and analysed. In addition, the non-
financial implications and factors for closure of each of these
locations has been reviewed and discussed in detail.
Closing Tyseley and Solihull Branch Restaurants Financial
Considerations:
Marginal Costing:
Initial financial figures, (Appendix 1), would seem to indicate
that both the Tyseley and Solihull restaurants should be closed
as both branches are showing negative profits, however closer
examination of the figures including their individual
contribution to the company shows that the Solihull branch

actually contributes £4,250.00 to the head office costs, whereas
the Tyseley branch is not able to positively contribute to the
head office costs as the fixed and variable overhead costs
already exceed their revenue by £1,000.00, (Appendix 1).
Besides the financial figures, Appendix 1 did also reveal and
area of concern with regards to the percentage of contribution in
relationship to sales in respect to the Birmingham branch, with
a significant decrease in the percentage sales for that branch
compared to the other branches. Our recommendation would be
to review and investigate this as a possible problem with
supplier costs being higher in this area, manager inexperience
or as part of inappropriate remuneration or even theft.
Financial Projections:
Using the revenue and expense expected increased provided we
performed a 5-year projection for Solihull, (Appendix 2), and
Tyseley, (Appendix 3). These spreadsheets confirm again that
Solihull currently has a positive contribution to the head office
costs, while Tyseley does not, however due to the expenses,
both variable and fixed, increasing at a faster rate than the
projected revenue increases, within 5 years Solihull will no
longer contribute to the corporate costs in a positive manner.
Projections, such as these, are useful for planning purposes,
however numerous external factors such as inflation, tax
changes, recession or even terrorist attacks can impact
projections, even short ones, (Fridson and Alvarez, 2002).
Timing for Potential Closing – Impact of Rental Contracts
T&C’s:
The rent for both Tyseley and Solihull branches in renewable in
six month periods so in Appendix 4 we projected the financial
impact of closing both restaurants immediately, both in six
months, Tyseley closing immediately while leaving Solihull
open and finally closing Solihull immediately while leaving
Tyseley open. As can clearly been seen by the company overall
profit figures, closing both restaurants when their six-month

lease periods are due would result in the best financial outcome,
with closing Tyseley immediately and leaving Solihull open
until the six-month lease period is due the next best financial
option. Closing Solihull immediately or closing both
immediately will result in the company losing money overall as
the remaining branches profit totals will not be able to
overcome the additional cost of the leases from closed branches
as well as the new distribution of head office costs.
Non-Financial Considerations:
The non-financial factors for closure as discussed in Appendix
5, support the financial data conclusions for each branch office,
however internally employee morale will need to be addressed
once layoff of the variable staff occur. We would recommend
that human resources commence evaluations of all employees
with the intention of retaining the highest performing
employees if they are willing to travel to different branch
locations. Attention should be given to all managers to possibly
address the contribution percentage issue at the Birmingham
branch, in case the investigation does show negligent manager
involvement. Customer interaction as well as innovation and
growth are both closely aligned to our findings regarding both
areas of operation. Per UK government statistics, (Statistics,
2008), while the Solihull area is one of the most affluent areas
of the UK outside of London and the same source lists the
Tyseley area is one of the poorer statistical areas, with high
unemployment and poor growth potential, (Statistics, 2008)
Conclusion Part 1 of Question 2:
Our recommendation would be to close the Tyseley branch
location when their lease period is up in 6 months prior to
which human resources and managers should perform employee
evaluations as well as completing the investigation regarding
the lower sales percentage figures at the Birmingham branch.
The financial contribution for Tyseley is negative and the

branch location provides little or no growth potential,
(Statistics, 2008), based on sales projections as well as its
geographical location in Tyseley. Solihull only being 4.5 miles
away from Tyseley does present opportunities for the company
to reassure loyal Tyseley customers that another restaurant is
near. The Tyseley manager, should, however be evaluated for
possible reassignment to the Birmingham branch depending on
the outcome of evaluations and the investigation. We
recommend, that the Solihull restaurant continues to be allowed
to operate, however careful assessment of the finances will need
to continue to see if the revenue versus cost comparisons shown
in Appendix 2, continues as estimated or if improvements are
seen. The UK government lists Solihull is an up and coming
area in Birmingham, with considerable growth potential and a
growing population with high levels of disposable income,
(Statistics 2008). Management should look at marketing
options, advertising and internet, promotions to try to reverse
the trend of costs increasing faster than revenue, to try and save
this branch in a desirable area.
Introduction – Part 2 of Question 2
Management have requested advise on the financial and non-
financial implications of opening a second restaurant in the
Solihull area. Utilizing financial projections such as net present
value, (Appendix, 7), profit and loss projections, (Appendix, 2),
discounted cash flow, (Appendix 6), as well as the accounting
rate of return, (Appendix, 8) and the balance scorecard
previously mentioned, (Appendix, 5) we would conclude that
given the current financial information available, opening
another restaurant in the Solihull area would not be a sound
decision.
New Solihull Restaurant Financial Considerations
Profit and Loss Projections:

Reviewing again the profit and loss projections over the next 5
years for the Solihull branch, (Appendix, 2), it is evident that
this location while currently contributing to the overall
company costs, will not contribute positively in 5 years due to
costs increasing faster than revenue.
Net Present Value Forecast:
The net present value forecast, (Appendix 7), is equally critical
of opening this new restaurant as, despite have a positive figure
at the end of 5 years, the only way to show that positive return
on the investment would be to sell the building at the end.
Fridson and Alvarez (2002), point out the problems with
projections, even those as short as 5 years, with inflation,
property prices as well as current prediction of revenue and
expenses increases all could change given outside factors
beyond management’s control. These financial considerations
do not consider the fact that the customer base in Solihull is
finite, and by opening another branch location, management
could split the customer base thus decreasing expected revenue
at one or both locations, unless management would close the
other branch prior to opening this one. While preserving the
customer base in one location marketing and promotion would
be needed to ensure customers are willing to change to the new
location.
Non-Financial Factors for New Solihull Restaurant
The non-financial balance sheet, (Appendix 5), show no
significant problems internally if the company were to open a
new restaurant as either new employees would be hired if both
Solihull locations remain open or the employees would transfer
from the closed location to the new location. Opening the new
location, without closing the previous one may have the
detrimental effect of splitting the customer base in Solihull
which would severely impact the financial predictions made
previously. The UK government, (Statistics, 2008), shows that

Solihull is an affluent area, with low unemployment and high
levels of income which are all positive factors for a new
restaurant, however management needs to make sure to stay
appraised of the latest trends in food types, diets as well as
seemingly non-related economic issues such as the price of fuel,
all of which can impact on sales, (Melaniphy, 2007).
Financing the Purchase:
Financial resources for funding this purchase would likely be
limited to either equity funding or debt financing.
Equity Funding:
Equity funding would save interest charges associated with debt
financing and some investors or venture capitalist might bring
valuable outside knowledge to help in managing the business,
however management would need to be ready to devote the
considerable amount of time required to do this as well as
possibly giving up partial control of the company.
Debt Financing:
Debt financing might be the simpler, although more expensive
option due to the interest rates that banks will charge. For
either of these options the company will need to produce the
financial statements to either potential investors, who given the
losses sustained at the current time, might be unwilling to either
invest or invest further depending on if this will be a public
offering or right to issue The lending institutions will also
likely increase the interest charges for any loan or demand
further collateral, possibly from the owners private good as the
company does not own any substantial assets like buildings or
land.
Conclusion – Part 2 of Question 2:
In conclusion, the recommendation would be that without
further improvements in financial factors it would not be
prudent to open a second branch location in Solihull at this

time. All the financial indications that have been completed for
this possible purchase, whether they are the current marginal
costing figures in Appendix 1 or the 5 year projections in
Appendix 2, as well as the net present value figures in
Appendix 7, which only show a profit after the sale of the
restaurant, clearly indicate that purchasing this building in
Solihull for a new location would be a high risk financial
decision made more difficult by these same negative financial
figures negatively impacting on possible investment sources.
The non-financial factors in Appendix 5 as well as the UK
government statistics, (Statistics, 2008) all agree however that
Solihull is an ideal location for promoting the brand image.
Instead of opening another location our recommendation now
would be to focus on improving the performance of the current
Solihull location using aggressive sales and promotions
techniques as well as increasing customer interaction and
understand trends on the sales side, improving supplier
contracts and negotiations to reduce the lease amounts to
address the expense side to reverse the current trends of
expenses growing faster than revenue as seen in Appendix 2.
Careful reviews should be done to ensure positive sales
reactions to any changes, with the timing of these reviews to
coincide with the 6-month lease periods so management could
follow the possible closure scenario if improvements are not
seen. If positive financial trends are seen in the future
management would be in a more favourable position both with
investors or lenders to further the brand by opening a location
in the Solihull area.
Appendix 1 – Marginal Costing for the Company
Appendix 2 – Solihull Marginal Costing 5-Year Profit and Loss
5-year Projection

Appendix 3 – Tyseley Marginal Costing 5-Year Profit and Loss
Projection
Appendix 4 – Restaurant Branch Location Closure Scenarios
Appendix 5 – Balanced Scorecards for Tyseley and Solihull
Closure
Appendix 6 – New Solihull Restaurant Projection – Discounted
Cash Flow
Appendix 7 – New Solihull Restaurant Projection – Net Present
Value Calculation
Appendix 8 – New Solihull Restaurant Projection – Accounting
Rate of Return

AssessmentAttn: Professor Jonathan MillsDavid J
ManderfeldS16146600Financial AccountantQuestion 3The
directors of Magic Works are seeking funding of £50m to
finance a magical institute. Following is the summarised
financial information of the company.
The following suggestions have been made for raising the
additional finance. Critically explain the effects of each of the
suggestions and comment on their practicability.a) Issue more
debenturesb) Sell their investmentsc) Halve the period that the
receivables are allowed to pay (all sales on credit)d) Issue more
ordinary shares
To Magic Works Directors
Date 27 March 2017
INTRODUCTION
The Magic Works board of directors requested suggestions and
recommendations for raising the required £50m for a new Magic
Institute. The directors have provided the company income
statement which has been analysed using vertical analysis,
(Appendix A). The companies comprehensive statement of

financial position has also been provided and can be found in
Appendix B. A detailed financial ratio analysis using both the
income and comprehensive statement information has been
completed, (Appendix C) with these analyses reviewed
throughout this report. The directors have specifically
requested we explore four separate possible methods of funding
the new Magical Institute including debentures, selling
investments, halving the receivables period and finally issuing
of new company shares.
Issue More Debentures:
Management have asked us to look at issuing more debentures
as a method of raising additional finance, and as per Fisher
(1993) the definition of a debenture “includes debenture stock,
bonds, and any other securities of a company, whether
constituting a charge on the assets of the company or not.” The
debentures currently used by Magic Works are the secured
variety and account for 41% of the total company assets,
(Appendix B). With £58M in non-current assets available to
secure future debentures this would be a feasible method to
raise the required additional amount, however if the full £50M
is raised in this fashion it will result in reducing the operating
profit to zero, (Appendix A). This will result in a net loss of
£3000 for the company after taxation and if the board continued
to support a £1000M dividend there would be a need to reduce
retained earnings by £4000M per year going forward. Obtaining
the full investment amount would also reduce the company’s
current investment coverage ratio from 2:1, (Appendix C)
whereas a “prudent value for a company is 5 times” (Walsh,
2003: 126). The combination of operating profit falling to zero,
the reduction in retained earnings, if dividends are maintained
at the present level, as well as the interest coverage ratio
dropping to 1 would all be negative indicators to both current
investors as well as future investors which could result in loss
of confidence and share price. As we have not been informed
what the return on investment will be for this venture, we would

want the return on investment for this to increase revenue
enough to offset the negative impacts listed above before
positively endorsing securing the entire £50M investment in this
manner. Revenue would need to increase by £60M (Appendix
D) to maintain the current level of dividends and retained
profits assuming all costs and taxations rise at the same
percentage level as they are with the current revenue level.
Sell Investments:
The second option management requested to be explored would
be to sell their investments to raise the required £50M
investment amount. As shown in Appendix B the total
investments currently held only total £30M so this will not
cover the full amount needed. Management also needs to take
into consideration the likely negative impact the shareholders
will have if management decide to sell, what is a cost value
£45M investment for a market value of £30M resulting in a loss
of £15M. Without knowing if these investments are expected to
increase in value, back towards or cost value or continue to
decrease in value we are not certain if this is a sound financial
decision. In addition, we do not know the full investment return
on the new magic institute and therefore are unable to confirm
if selling the investments at a loss is justified at this time. If
management does proceed to fund part of the investment in this
manner, the legal team should be consulted prior to any sale to
ensure that the current debentures are not secured using these
investment instruments.
Halving the Receivables Period:
The third option that the directors have requested be explored
involve the halving the receivables period on all sales to raise
the required £50M investment. Currently, as per ratio analysis
in Appendix C, the receivable period is only 15.21 days.
Wilson and Summers, (2002) indicate that credit terms greatly
depend on the nature of the business, demand for their products
as well as the size of the business. The UK Government on

their invoicing and payments page, (Gov.UK, 2017), also
indicate that unless agreed otherwise, 30 days is the standard.
If we compare the ratio analysis of 15.21 days, (Appendix C),
with the receivables of £5000, (Appendix B) it can be shown
that halving the receivables period will only result in £2.5M in
additional funding, leaving an additional £47.5M of funding to
obtain and even if management were to reduce the receivables
days to zero it would only result in a total of £5M of the
required amount. The directors would also need to consider the
extra workload to their employees as a result of halving the
receivable period, as well as the repercussions from their
customers for the demands for payment sooner than normal.
Changing the receivable period is a short-term investment
option and impacts on liquidity rather than long term
investments.
Issue More Shares:
The last financing option management requested to be reviewed
involves issuing more ordinary shares to raise the requested
capital, and as issuing shares is cheaper than using debentures,
this would appear to be a better option, however there are some
concerns. Without knowing the current market value of the
share’s, we are unable to forecast how many shares would need
to be issued to raise the full £50M required, how many shares
this would leave outstanding and what impact this would have
on the current dividend level and company profit. The number
of shares required to be issued, if excessive, might also change
the ownership structure of the company up to and including the
directors. Management would also need to decide if they will
conduct a public offering or a rights issue. We would suggest,
as mentioned for other options above, that management publish
the expected rate of return on investment for the magical
institute. This would not only help investors make an informed
decision, reducing their possible risk, it would also allow us to
accurately analysis what the share increase would mean to the
company and investors. Currently each shareholder receives a

3% dividend on their investment as shown in Appendix A. If
we assume that the number of outstanding shares doubles, and
the dividend level remains at its current 3% return, this would
have the effect of eliminating the company’s profit.
Conclusion
In conclusion without knowing the expected rate of return on
this investment, as well as the of market value of the company’s
ordinary shares, any of our conclusions cannot be fully
supported by analysis. Of the four options discussed above,
only issuing debentures or ordinary shares might allow
management to raise the full amount, however both options are
likely to reduce the company’s operation profit to zero if all
other factors remain the same and could result in a drop in
retained earning if the company maintains the current dividend
level. Neither selling the investments or halving the receivables
will, by themselves raise the full amount required and legal
would have to ensure selling the investments is even possible
while halving the receivables period induces more stress to
employees and risk to adverse customer reaction then it’s worth.
Management, after carefully reviewing the return on investment
for this project could proceed with some combination of the 4
options above to try and reduce the downsides for each.
Besides the options outlined here, the value of the current land
and plants held by the company combined with the new land and
plants acquired as part of the investment mean that management
could use debt financing as a preferable option. Low interest
rates, below the company’s current rate of return of 4.1%
(Appendix A) should be possible based on the current financial
statement. Other possible financial options could be to use
leasing or asset financing based on the existing equipment. If
the Magical Institute is to be an educational centre, then
government grants might be possible to obtain to help defray
part of the investment cost, (Nesta, 2017), or even from the
National Lottery as an education project, (National Lottery
Good Causes, 2017). Investment crowdfunding is a possible

alternative enticing local investment groups based around either
the location of the magic institute or the investors interest in
magic or education. Venture capitalists would also be possible
under the crowdfunding option, however in return for their
investment management would likely have to give up some level
of control of the company, (Bonini et al., 2011), so any option
involving this method would have to be carefully considered.
Appendix A – Income Statement
APPENDIX B – COMPREHENSIVE BALANCE SHEET
APPENDIX C – FINANCIAL RATIO ANALYSIS
APPENDIX D – INCOME STATEMENT, DEBENTURE
FUNDING ANALYSIS

References:
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Cash Flow Efficiency
Payables 2013 2014 2015 65.010000000000005 112.98
117.95 Receivables/Inventory Turnover 2013 2014
2015 110.2 102.63 103.23 2013 2014 2015 2013
2014 2015
Year
Days
Page 5 | 41
RatioFormula201520142013
Average

Benchmark
Competitor
Benchmark
PBIT x100
Capital Employed
PBIT
Total Assets
Revenue
Total Assets
PBIT
Revenue
Gross Profit x 100
Revenue
7.87%
17.00%
47.33%
11.07%
0.92
Profitability Ratios
ROCE%22.39%20.08%11.64%18.04%
0.44
Return on Assets%19.15%16.82%9.37%15.11%
Asset Turnover
x0.460.430.44
95.23%
Net Profit Margin (Pre-tax
margin)
%41.94%38.86%21.48%34.09%
Gross Profit Margin%95.94%95.25%94.50%
Average
Benchmark
Competitor
Benchmark
Current Assets
Current Liabilities

Current Assets – Inventories
Current Liabilities
2.00:1
1.60:13.24:1
Liquidity Ratios
Current Ratiox:13.61:13.35:12.78:13.25:1
Acid Test Ratio
x:13.61:13.34:12.77:1
2.60Cash Ratio1.982.392.102.59
Cash + Cash Equivilents
Average
Benchmark
Competitor
Benchmark
Trade Receivables x365
Sales
Trade Payables x 365
Cost of Sales
Closing Inventory. x 365
Cost of Sales
41.51
50.72
4.57
Efficiency Ratios
Receivables Collection Perioddays86.5176.5682.3481.80
23.55
Payables Payment Perioddays117.95112.9865.0198.65
Inventory Turnover Period
days16.7226.0727.86
Average
Benchmark
Competitor

Benchmark
Debt
Debt + Equity
PBIT
Interest Expenses
18.361050.388889
Financial Risk Ratios
Gearing%0.91%0.68%0.52%0.70%
Interest Coverage Ratio
x1353.671030.00767.50
Average
Benchmark
Competitor
Benchmark
PBIT x100
Capital Employed
PBIT
Total Assets
Revenue
Total Assets
PBIT
Revenue
Gross Profit x 100
Revenue
Sales
Cost of Sales
Cost of Sales
Current Assets
Current Liabilities
Current Liabilities

Debt
Debt + Equity
PBIT
Interest Expenses
(Appendix F)
2.60Cash Ratio1.982.392.102.59
1050.388889
Gearing%0.91%0.68%0.52%0.70%
Interest Coverage Ratio
x1353.671030.00767.50
3.24:1
Liquidity Ratios
Current Ratiox:13.61:13.35:12.78:13.25:1
Acid Test Ratio
x:13.61:13.34:12.77:1
23.55
Payables Payment Perioddays117.95112.9865.0198.65
Inventory Turnover Period
days16.7226.0727.86
Efficiency Ratios
Receivables Collection Perioddays86.5176.5682.3481.80
95.23%
margin)
%41.94%38.86%21.48%34.09%
Gross Profit Margin%95.94%95.25%94.50%
0.44
Return on Assets%19.15%16.82%9.37%15.11%
Asset Turnover
x0.460.430.44
ROCE%22.39%20.08%11.64%18.04%7.87%

2.74%
18.36
2.00:1
1.60:1
41.51
50.72
4.57
17.00%
47.33%
11.07%
0.92
Intel Annual Income
Statement (values in 000's)
Period
Ending:Trend12/26/201512/27/201412/28/201312/29/2012
Liquidity Ratios
Current Ratio258%173%236%243%
Quick Ratio225%147%206%206%
Cash Ratio162%88%148%141%
Gross Margin63%64%60%62%
Operating Margin25%27%23%27%
Pre-Tax Margin26%28%24%28%
Profit Margin21%21%18%21%
Pre-Tax ROE23%28%22%29%
After Tax ROE19%21%17%21%
Gearing0.330.220.23
(NASDAQ, 2015), (Intel Company Financial Information,
2017), (INTC key financial ratios, 2017),
(Intel income statement (quarterly) for December 2016 to
September 2014 (INTC), 2017)
AMD Annual Income
Statement (values in 000's)
Period
Ending:Trend12/26/201512/27/201412/28/201312/29/2012
Liquidity Ratios

Current Ratio165%190%178%162%
Quick Ratio117%142%124%122%
Cash Ratio56%72%68%72%
Gross Margin27%33%37%23%
Operating Margin12%3%2%19%
Pre-Tax Margin16%7%1%22%
Profit Margin17%7%2%22%
Pre-Tax ROE157%213%14%226%
After Tax ROE160%216%15%220%
Gearing3.8011.800.00
(NASDAQ, 2015), (Advanced Micro Devices, Inc. Company
Financial Information, 2017), (Advanced
micro devices (AMD) key stats, n.d.)
Marginal Costing Format
BirminghamTyseleySolihullStirtchley
££££
Sales430,000.00188,000.00219,000.00223,000.00
Food and Drink
Costs(182,000.00)(70,000.00)(80,000.00)(85,500.00)
Variable Staff
Costs(107,500.00)(47,000.00)(54,750.00)(55,750.00)
Contribution140,500.0071,000.0084,250.0081,750.00
Percentage of Sales 32.67%37.77%38.47%36.66%
Fixed Staff Costs(30,000.00)(30,000.00)(30,000.00)(30,000.00)
Rent(44,000.00)(28500.00)(38000.00)(25000.00)
Resturant Overheads (excl.
Rent)(26,000.00)(13500.00)(12000.00)(8000.00)
Resturant Contribution40,500.00(1,000.00)4,250.0018,750.00
Allocated Head Office
Costs(10,000.00)(10,000.00)(10,000.00)(10,000.00)
PROFIT30,500.00(11,000.00)(5,750.00)8,750.00
Year 0Year 1Year 2Year 3Year 4Year 5
£££££
Sales219000.00223380.00227847.60232404.55237052.6424179
3.70

Food and Drink
Costs(80000.00)(83200.00)(86528.00)(89989.12)(93588.68)(973
32.23)
Variable Staff
Costs(54750.00)(55845.00)(56961.90)(58101.14)(59263.16)(604
48.42)
Contribution84250.0084335.0084357.7084314.2984200.808401
3.04
Percentage of Sales
38.47%37.75%37.02%36.28%35.52%34.75%
Fixed Staff
Costs(30000.00)(30600.00)(31212.00)(31836.24)(32472.96)(331
22.42)
Rent(38000.00)(38000.00)(38000.00)(38000.00)(38000.00)(380
00.00)
Rent)(12000.00)(12360.00)(12730.80)(13112.72)(13506.11)(139
11.29)
Resturant
Contribution4250.003375.002414.901365.33221.73(1020.67)
Costs(10000.00)(10000.00)(10000.00)(10000.00)(10000.00)(100
00.00)
PROFIT(5750.00)(6625.00)(7585.10)(8634.67)(9778.27)(11020.
67)
Solihull Marginal Costing 5 Year Profit / Loss Projection
£££££
Sales188,000.00191,760.00195,595.20199,507.10203,497.25207
,567.19
Food and Drink
Costs(70,000.00)(72,800.00)(75,712.00)(78,740.48)(81,890.10)(
85,165.70)
Variable Staff
Costs(47,000.00)(47,940.00)(48,898.80)(49,876.78)(50,874.31)(
51,891.80)

Contribution71,000.0071,020.0070,984.4070,889.8570,732.8470
,509.69
Percentage of Sales
37.77%37.04%36.29%35.53%34.76%33.97%
Fixed Staff
Costs(30,000.00)(30,600.00)(30,600.00)(31,212.00)(31,836.24)(
32,472.96)
Rent(28,500.00)(29,355.00)(28,500.00)(28,500.00)(28,500.00)(
28,500.00)
Rent)(13,500.00)(13,905.00)(13,905.00)(14,322.15)(14,751.81)(
15,194.37)
Resturant
Contribution(1,000.00)(2,840.00)(2,020.60)(3,144.30)(4,355.22)
(5,657.64)
Costs(10,000.00)(10,000.00)(10,000.00)(10,000.00)(10,000.00)(
10,000.00)
PROFIT(11,000.00)(12,840.00)(12,020.60)(13,144.30)(14,355.2
2)(15,657.64)
Tyseley Marginal Costing 5 Year Profit / Loss Projection
BirminghamStirtchley
££
Sales430,000.00223,000.00
Food and Drink Costs(182,000.00)(85,500.00)
Variable Staff Costs(107,500.00)(55,750.00)
Contribution140,500.0081,750.00
Percentage of Sales 32.67%36.66%
Fixed Staff Costs(30,000.00)(30,000.00)
Rent(44,000.00)(25,000.00)
Allocation of 6 months rent for
Solihull and Tyseley(16,625.00)(16,625.00)
Resturant Overheads (excl. Rent)(26,000.00)(8000.00)
Resturant Contribution23,875.002,125.00
Allocated Head Office Costs(10,000.00)(10,000.00)
Portion of Tyseley and Solihull

Head Office Costs After 6 Months
(5,000.00)(5,000.00)
PROFIT8,875.00(12,875.00)
Company Overall Profit if Tyseley and Solihull are Immediately
Closed:-£4,000.00
Marginal Costing Format Closing Tyseley and Solihull
Immediately
BirminghamStirtchleyTyseleySolihull
££££
Sales430,000.00223,000.00188,000.00219,000.00
Food and Drink
Costs(182,000.00)(85,500.00)(70,000.00)(80,000.00)
Variable Staff
Costs(107,500.00)(55,750.00)(47,000.00)(54,750.00)
Contribution140,500.0081,750.0071,000.0084,250.00
Percentage of Sales 32.67%36.66%37.77%38.47%
Fixed Staff Costs(30,000.00)(30,000.00)(30,000.00)(30,000.00)
Rent(44,000.00)(25,000.00)(28500.00)(38000.00)
Rent)(26,000.00)(8000.00)(13500.00)(12000.00)
Resturant Contribution40,500.0018,750.00(1,000.00)4,250.00
Costs(10,000.00)(10,000.00)(5,000.00)(5,000.00)
Portion of Tyseley and Solihull
Head Office Costs After 6 Months
(5,000.00)(5,000.00)0.000.00
PROFIT25,500.003,750.00(6,000.00)(750.00)
Company Overall Profit if Tyseley and Solihull are Closed in 6
Months:£22,500.00
Marginal Costing Format Closing Tyseley and Solihull in 6
months
BirminghamSolihullStirtchleyBirminghamTyseleyStirtchley
££££££
Sales430,000.00219,000.00223,000.00Sales430,000.00188,000.
00223,000.00
Food and Drink Costs(182,000.00)(80,000.00)(85,500.00)Food

and Drink Costs(182,000.00)(70,000.00)(85,500.00)
Variable Staff
Costs(107,500.00)(54,750.00)(55,750.00)Variable Staff
Costs(107,500.00)(47,000.00)(55,750.00)
Contribution140,500.0084,250.0081,750.00Contribution140,500
.0071,000.0081,750.00
Percentage of Sales 32.67%38.47%36.66%Percentage of Sales
32.67%37.77%36.66%
Fixed Staff Costs(30,000.00)(30,000.00)(30,000.00)Fixed Staff
Costs(30,000.00)(30,000.00)(30,000.00)
Rent(44,000.00)(38000.00)(25000.00)Rent(44,000.00)(28500.00
)(25000.00)
Tyseley rent (6 months portioned
over 3 remaining branches)(4,750.00)(4,750.00)(4,750.00)
Solihull 6 months rent allocated to
remaining branches(6,333.33)(6,333.33)(6,333.33)
Rent)(26,000.00)(12000.00)(8000.00)Resturant Overheads
(excl. Rent)(26,000.00)(13500.00)(8000.00)
Resturant Contribution35,750.00(500.00)14,000.00Resturant
Contribution34,166.67(7,333.33)12,416.67
Allocated Head Office Costs(10,000.00)(10,000.00)(10,000.00)
Solihull Head Office Cost Allocated
to remaining branches(3,333.33)(3,333.33)(3,333.33)
Portion of Head Office Cost from
Tyseley Closure
(3,333.33)(3,333.33)(3,333.33)Allocated Head Office
Costs(10,000.00)(10,000.00)(10,000.00)
PROFIT22,416.67(13,833.33)666.67PROFIT20,833.33(20,666.6
7)(916.67)
Company Overall Profit if Tyseley is Immediately
Closed:£9,250.00Company Overall Profit if Solihull is
Immediately Closed:-£750.00
Marginal Costing Format - Tyseley Closed
ImmediatelyMarginal Costing Format Closing Solihull
Immediately

TyseleySolihull
Financial Perspective:
Revenue not high enough to
support fixed costs. Increase
revenue or decrease fix costs.
Overall costs will continue to
rise in the future. Revenue
growth will struggle to
outpace current as well as
future cost increases in a
financially struggling area.
Resturant is managed well.
Redundency costs
Customer Perspective:
Loss of customer base in
Tyseley, which given area
statistics, (Statistics 2008),
should not be a concern.
Internal Perspective:
Layoffs of some staff. Impact
on morale for remaining
employees. Need to evaluate
managers at all stores.
Possible move to Birmingham
location as that branch shows
lower performance.
Innovation & Growth:
Tyseley area is one of the
most deprived areas in UK for
growth or potential growth.
(Statistics 2008)
Financial Perspective:
Projected revenue increases
over next 5 years are not
keeping pace with increase in
costs. Resturant managed

well. Positive contribution to
corporate bottom line,
although not enough to cover
head office costs.
Redundency costs
Customer Perspective: Loss
of customer base in an up and
coming and afluent area
would not be a good plan.
Internal Perspective:
Layoffs of some staff. Impact
on morale for remaining
employees. Need to evaluate
managers at all stores.
Possible move to Birmingham
location as that branch shows
lower performance. Solihull
Manager slightly better than
Tyseley manager on stats
alone.
Innovation & Growth:
Solihull a key growth area in
Birmingham. Solihull one of
the most afluent areas
outside London. (Statistics,
2008)
Year > Cash
Flow (£) ˅
Purchase of Restaurant(230,000.00)
Fixtures(65,000.00)
Sales
Revenue223,380.00227,847.60232,404.55237,052.64241,793.70
Variable Costs Food &
Drinks(83,200.00)(86,528.00)(89,989.12)(93,588.68)(97,332.23
)

Variable Costs
Staff(55,845.00)(56,961.90)(58,101.14)(59,263.16)(60,448.42)
Overhead fixed costs
(12,360.00)(12,730.80)(13,112.72)(13,506.11)(13,911.29)
Overhead fixed costs
manager(30,600.00)(31,212.00)(31,836.24)(32,472.96)(33,122.4
2)
Sale of Resaurant Property240,000.00
Net Cash
Flow(295,000.00)41,375.0040,414.9039,365.3338,221.73276,97
9.33
Discount Factor (@10%)1.000.9090.8260.7510.6830.621
Present
Value(295,000.00)37,609.8833,382.7129,563.3626,105.44172,0
04.16
Net Present Value at end of 5 years£3,665.55
Discounted Cash Flow New Restaurant Purchase in Solihull
Net Cash FlowDF @ 10%DCF @10%
Year 0(295,000.00)1.00(295,000.00)
Year 141,375.000.90937,609.88
Year 240,414.900.82633,382.71
Year 339,365.330.75129,563.36
Year 438,221.730.68326,105.44
Year 5276,979.330.621172,004.16
Net Present Value @ 10%3,665.55
YearCash FlowDepreciationProfit
0(230,000.00)(230,000.00)
141,375.00(13,000.00)28,375.00
240,414.90(13,000.00)27,414.90
339,365.33(13,000.00)26,365.33
438,221.73(13,000.00)25,221.73
5276,979.33(13,000.00)263,979.33
Total206,356.29(65,000.00)141,356.29
£28,271.26
£235,000.00
12.03%

Accounting Rate of Return
Average Annual Profits:
Average Capital Employed:
Accounting Rate of Return:
Income Statement (£M)(£M)
Revenue120000.00100.00%
Cost of sales(90000.00)75.00%
Gross Profit30000.0025.00%
Distribution Costs(8000.00)6.67%
Administration Expenses(12000.00)(20000.00)10.00%16.67%
Operating Profit10000.008.33%
Debenture Interest(5000.00)4.17%
Net Profit Before Taxation5000.004.17%
Taxation(3000.00)2.50%
Net Profit After Taxation2000.001.67%
Dividends(1000.00)0.83%
Retained Profit for the Year1000.000.83%
Vertical Analysis
Comprehensive Statement of Financial Position
Non-Current Assets£000
Land & Buildings (Market Value £55)
45,000.00
Plant & Machinery18,000.00
Investment at Cost (Market Value £30m) 45,000.00
Total Non Current Assets108,000.00
Current Assets
Inventories
8,000.00
Receivables5,000.00
Cash1,000.00
Total Current Assets14,000.00
Total Assets122,000.00
Current Liabilities: Payables 24,000.00
Non-Current Liabilities : 10% Debentures (Secured)50,000.00
Total Liabilities74,000.00
Equity

Shared Capital30,000.00
Retained Earnings18,000.00
Total Equity48,000.00
Total Equity and Liabilities122,000.00
RatioFormula
PBIT x100
Capital Employed
PBIT
Total Assets
Revenue
Total Assets
PBIT
Revenue
Gross Profit x 100
Revenue
Sales
Cost of Sales
Cost of Sales
Current Assets
Current Liabilities
Current Liabilities
Debt
Debt + Equity
PBIT
Interest Expenses
ROCE%4.10%
Asset Turnoverx98.36%
Return on Assets
%4.10%
Gross Profit Margin%25.00%

margin)
%4.17%
Payables Payment Period
days97.33
Efficiency Ratios
Receivables Collection Perioddays15.21
Current Ratiox:10.58:1
Inventory Turnover Perioddays32.44
Interest Coverage Ratiox2.00:1.00
Gearing%60.66%
Cash Ratio
0.01
Acid Test Ratiox:10.25:1
Liquidity Ratios
(£M)
Revenue180000.00
Cost of sales(135000.00)
Gross Profit45000.00
Distribution Costs(12000.00)
Administration Expenses(18000.00)(30000.00)
Operating Profit15000.00
Debenture Interest(10000.00)
Net Profit Before Taxation5000.00
Taxation(3000.00)
Net Profit After Taxation2000.00
Dividends(1000.00)
Retained Profit for the Year1000.00
Income Statement (£M) - To retain current divident and
profit while doubling debnentures
CoverJ SAINSBURY PLCActiveLondon, EnglandThis company
is the Global Ultimate Owner of the Corporate GroupBvD ID

n°GB00185647Exported on 25/09/2019
Data Update 9,010 (23/09/2019)
Ⓒ Bureau van Dijk 2019
Key financials & employeesJ SAINSBURY PLCKey financials
&
employees3/9/193/10/183/11/173/12/163/14/153/15/143/16/133/
17/123/19/113/20/103/21/093/22/083/24/073/25/063/26/053/27/
043/29/033/30/023/31/013/31/00th GBPth GBPth GBPth GBPth
GBPth GBPth GBPth GBPth GBPth GBPth GBPth GBPth GBPth
GBPth GBPth GBPth GBPth GBPth GBPth GBPOriginal
DocumentsPDFPDFPDFPDFPDFPDFPDFPDFPDFPDFPDFPDF
PDFPDFPDFPDFPDFPDFPDFPDF11 months12 months12
months12 months12 months12 months12 months12 months12
months12 months12 months12 months12 months12
monthsCons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.
Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Cons.Unquali
fiedUnqualifiedUnqualifiedUnqualifiedUnqualifiedUnqualified
UnqualifiedUnqualifiedUnqualifiedUnqualifiedUnqualifiedUnqu
alifiedUnqualifiedUnqualifiedUnqualifiedUnqualifiedUnqualifie
dUnqualifiedUnqualifiedUnqualifiedIFRSIFRSIFRSIFRSIFRSIF
RSIFRSIFRSIFRSIFRSIFRSIFRSIFRSIFRSUK GAAPUK
GAAPUK GAAPUK
GAAPTurnover29,007,00028,456,00026,224,00023,506,00023,7
75,00023,949,00023,303,00022,294,00021,102,00019,964,0001
8,911,00017,837,00017,151,00016,061,00015,409,00017,141,00
017,430,00017,162,00017,244,00016,271,000Profit (Loss)
before Taxation239,000409,000503,000548,000-
72,000898,000788,000799,000827,000733,000466,000479,0004
77,000104,00015,000610,000667,000571,000434,000509,000Ne
t Tangible Assets
(Liab.)10,121,00010,627,00010,422,0009,920,0009,289,0009,48
9,0009,409,0009,044,0008,306,0007,918,0006,954,0006,850,00
06,680,0007,746,0006,396,0007,479,0007,031,0006,100,0005,7
64,0005,516,000Shareholders
Funds8,456,0007,411,0006,872,0006,365,0005,539,0006,003,00

05,733,0005,629,0005,424,0004,966,0004,376,0004,935,0004,3
49,0003,886,0004,374,0005,104,0005,003,0004,848,0004,911,0
004,742,000Profit Margin0.821.441.922.33-
0.303.753.383.583.923.672.462.692.780.650.103.563.833.332.5
23.13Return on Shareholders Funds3.085.527.328.61-
1.3014.9613.7414.1915.2514.7610.659.7110.972.680.3411.9513
.3311.788.8410.73Return on Capital
Employed2.343.504.515.35-
0.759.198.238.689.789.096.556.836.961.310.237.949.198.977.1
88.73Liquidity Ratio
(x)0.500.590.530.520.510.500.300.350.310.410.300.400.500.68
0.740.670.700.630.680.55Gearing
(%)43.2568.1666.7266.3878.2671.7369.9866.1857.2863.8166.0
944.5465.97169.9258.0059.0349.5338.3730.6541.02Number of
employees116,400121,200118,700108,300107,000107,000105,0
00101,90099,30097,30097,30098,60095,50096,20097,400113,60
0108,700108,500111,600116,946http://fame1.be.bvdep.net/fame
/1/Companies/JordansDocuments/DownloadLastFile?rid=interna
l:28957&closingDate=09%2f03%2f2019http://fame1.be.bvdep.n
et/fame/1/Companies/JordansDocuments/DownloadLastFile?rid
=internal:28957&closingDate=20%2f03%2f2010http://fame1.be.
bvdep.net/fame/1/Companies/JordansDocuments/DownloadLast
File?rid=internal:28957&closingDate=21%2f03%2f2009http://fa
me1.be.bvdep.net/fame/1/Companies/JordansDocuments/Downl
oadLastFile?rid=internal:28957&closingDate=22%2f03%2f2008
http://fame1.be.bvdep.net/fame/1/Companies/JordansDocuments
/DownloadLastFile?rid=internal:28957&closingDate=24%2f03
%2f2007http://fame1.be.bvdep.net/fame/1/Companies/JordansD
ocuments/DownloadLastFile?rid=internal:28957&closingDate=2
5%2f03%2f2006http://fame1.be.bvdep.net/fame/1/Companies/Jo
rdansDocuments/DownloadLastFile?rid=internal:28957&closing
Date=26%2f03%2f2005http://fame1.be.bvdep.net/fame/1/Compa
nies/JordansDocuments/DownloadLastFile?rid=internal:28957&
closingDate=27%2f03%2f2004http://fame1.be.bvdep.net/fame/1
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28957&closingDate=29%2f03%2f2003http://fame1.be.bvdep.net

/fame/1/Companies/JordansDocuments/DownloadLastFile?rid=i
nternal:28957&closingDate=30%2f03%2f2002http://fame1.be.b
vdep.net/fame/1/Companies/JordansDocuments/DownloadLastFi
le?rid=internal:28957&closingDate=31%2f03%2f2001http://fam
e1.be.bvdep.net/fame/1/Companies/JordansDocuments/Downloa
dLastFile?rid=internal:28957&closingDate=10%2f03%2f2018ht
tp://fame1.be.bvdep.net/fame/1/Companies/JordansDocuments/
DownloadLastFile?rid=internal:28957&closingDate=31%2f03%
2f2000http://fame1.be.bvdep.net/fame/1/Companies/JordansDoc
uments/DownloadLastFile?rid=internal:28957&closingDate=11
%2f03%2f2017http://fame1.be.bvdep.net/fame/1/Companies/Jor
dansDocuments/DownloadLastFile?rid=internal:28957&closing
dLastFile?rid=internal:28957&closingDate=19%2f03%2f2011
Balance sheetJ SAINSBURY PLCBalance
sheet3/9/193/10/183/11/173/12/163/14/153/15/143/16/133/17/12
3/19/113/20/103/21/093/22/083/24/073/25/063/26/053/27/043/2
9/033/30/023/31/013/31/00th GBPth GBPth GBPth GBPth

GAAPUK GAAPUK GAAPFixed AssetsTangible
Assets9,708,0009,898,00010,006,0009,764,0009,648,0009,880,0
009,804,0009,329,0008,784,0008,203,0007,821,0007,424,0007,
176,0007,060,0007,154,0008,214,0007,540,0006,906,0006,215,
0006,563,000Land &
Buildings7,753,0007,920,0007,951,0007,542,0007,683,0007,878
,0007,831,0007,450,0007,062,0006,618,0006,248,0005,945,000
5,659,0005,448,0005,294,0005,845,0005,957,0005,357,0004,96
0,0005,064,000 ∟ Freehold Land4,339,000 ∟ Leasehold
Land1,320,000Fixtures &
Fittings2,002,0001,573,0001,479,0001,517,0001,612,000Plant
& Vehicles ∟ Plant ∟ VehiclesOther Fixed
Assets1,955,0001,978,0002,055,0002,222,0001,965,0001,973,00
01,879,0001,722,0001,585,0001,860,0002,369,0001,583,0001,5
49,0001,255,0001,499,000Intangible
Assets1,044,0001,072,000742,000329,000325,000286,000171,0
00160,000151,000144,000160,000165,000175,000191,000125,0
00208,000226,000263,000278,000316,000Investments4,241,000
3,165,0002,667,0002,436,0002,059,0002,005,000806,000819,00
0743,000655,000482,000309,000285,0001,651,00020,000116,00
0112,000174,000164,00098,000Fixed
Assets14,993,00014,135,00013,415,00012,529,00012,032,00012
,171,00010,781,00010,308,0009,678,0009,002,0008,463,0007,8
98,0007,636,0008,902,0007,299,0008,538,0007,878,0007,343,0
006,657,0006,977,000Current AssetsStock &
W.I.P.1,929,0001,810,0001,775,000968,000997,0001,005,00098
7,000938,000812,000702,000689,000681,000590,000576,00055
9,000753,000800,000751,000763,000986,000Stock1,000994,000
1,001,000559,000800,000751,000763,000986,000
W.I.P.1,0003,0004,00014,000Finished
Goods1,929,0001,810,0001,774,000967,000973,000938,000812,

000702,000689,000681,000590,000576,000Trade
Debtors3,782,0003,477,0002,792,0001,791,0001,700,0001,655,
000128,000110,00093,00071,00049,00032,00030,00033,0002,59
4,0002,175,0001,644,00082,00080,00054,000Bank &
Deposits1,121,0001,730,0001,083,0001,143,0001,285,0001,592,
000517,000739,000501,000837,000627,000719,0001,128,0001,0
28,000673,000543,000679,000427,000475,000533,000Other
Current
Assets517,000627,000468,000412,000370,00061,000178,00017
6,000250,000144,000146,000174,000167,0002,131,000292,0005
65,0001,010,0002,452,0002,380,000166,000Group Loans
(asset)33,000298,000Directors Loans (asset)Other
Debtors322,000470,000312,000305,000271,000130,000115,000
188,000101,00088,00083,00065,0001,942,000292,000308,00062
9,0002,452,0002,380,000166,000Prepayments195,000157,00015
6,000107,00099,00061,00048,00061,00062,00043,00058,00091,
000102,000189,000224,00083,000Deferred
TaxationInvestments240,000222,000204,000130,000153,00056,
000104,00069,00065,00099,00059,000116,00025,00077,000201,
00019,00020,00016,00012,0001,836,000Current
Assets7,589,0007,866,0006,322,0004,444,0004,505,0004,369,00
01,914,0002,032,0001,721,0001,853,0001,570,0001,722,0001,9
40,0003,845,0004,319,0004,055,0004,153,0003,728,0003,710,0
003,575,000Current LiabilitiesTrade Creditors-8,558,000-
7,519,000-6,570,000-5,108,000-5,484,000-1,846,000-1,908,000-
1,903,000-1,836,000-1,782,000-1,728,000-1,703,000-1,706,000-
1,419,000-1,393,000-1,229,000-1,237,000-1,139,000-1,054,000-
1,147,000Short Term Loans & Overdrafts-948,000-763,000-
293,000-341,000-260,000-534,000-165,000-150,000-74,000-
73,000-154,000-118,000-363,000-2,552,000-390,000-430,000-
224,000-345,000-374,000-855,000Bank Overdrafts-200,000-
2,000-6,000-42,000-95,000-507,000-143,000-131,000-71,000-
70,000-153,000-118,000-363,000-2,552,000-127,000-65,000-
140,000-178,000Group Loans (short t.)-27,000Director Loans
(short t.)Hire Purch. & Leas. (short t.)-16,000-30,000-23,000-
38,000-30,000-27,000-21,000-19,000-3,000-3,000-1,000-

41,000-37,000-4,000-4,000 ∟ Hire Purchase (short t.) ∟
Leasing (short t.)-16,000-30,000-23,000-38,000-30,000-27,000-
21,000-19,000-3,000-3,000-1,000-41,000-37,000-4,000-
4,000Other Short Term Loans-732,000-731,000-264,000-
261,000-135,000-1,000-390,000-362,000-60,000-276,000-
230,000-677,000Total Other Current Liabilities-1,911,000-
2,020,000-1,710,000-1,275,000-1,179,000-4,385,000-1,042,000-
1,083,000-1,032,000-938,000-1,037,000-784,000-652,000-
839,000-3,314,000-3,247,000-3,313,000-3,224,000-2,897,000-
2,718,000Corporation Tax-204,000-247,000-219,000-158,000-
188,000-189,000-148,000-149,000-201,000-200,000-202,000-
191,000-65,000-63,000-11,000-85,000-98,000-140,000-
127,000-128,000Dividends-95,000-218,000-217,000-207,000-
197,000-197,000Accruals & Def. Inc. (short t.)-839,000-
872,000-485,000-405,000-292,000-256,000-284,000-257,000-
250,000-223,000-252,000-248,000-196,000-257,000-305,000-
280,000-317,000-243,000-226,000-243,000Social Securities &
V.A.T.-44,000-30,000-60,000-76,000-121,000-132,000Other
Current Liabilities-868,000-901,000-1,006,000-712,000-
699,000-3,940,000-610,000-677,000-581,000-515,000-583,000-
345,000-391,000-519,000-2,859,000-2,634,000-2,621,000-
2,558,000-2,226,000-2,018,000Current Liabilities-11,417,000-
10,302,000-8,573,000-6,724,000-6,923,000-6,765,000-
3,115,000-3,136,000-2,942,000-2,793,000-2,919,000-2,605,000-
2,721,000-4,810,000-5,097,000-4,906,000-4,774,000-4,708,000-
4,325,000-4,720,000Net Current Assets (Working Capital)-
3,828,000-2,436,000-2,251,000-2,280,000-2,418,000-2,396,000-
1,201,000-1,104,000-1,221,000-940,000-1,349,000-883,000-
781,000-965,000-778,000-851,000-621,000-980,000-615,000-
1,145,000Net Tangible Assets
(Liab.)10,121,00010,627,00010,422,0009,920,0009,289,0009,48
9,0009,409,0009,044,0008,306,0007,918,0006,954,0006,850,00
06,680,0007,746,0006,396,0007,479,0007,031,0006,100,0005,7
64,0005,516,000Working Capital needs-2,847,000-2,232,000-
2,003,000-2,349,000-2,787,000814,000-793,000-855,000-
931,000-1,009,000-990,000-990,000-1,086,000-

810,0001,760,0001,699,0001,207,000-306,000-211,000-
107,000Total
Assets22,582,00022,001,00019,737,00016,973,00016,537,00016
,540,00012,695,00012,340,00011,399,00010,855,00010,033,000
9,620,0009,576,00012,747,00011,618,00012,593,00012,031,000
11,071,00010,367,00010,552,000Total Assets less Cur.
Liab.11,165,00011,699,00011,164,00010,249,0009,614,0009,77
5,0009,580,0009,204,0008,457,0008,062,0007,114,0007,015,00
06,855,0007,937,0006,521,0007,687,0007,257,0006,363,0006,0
42,0005,832,000Long Term LiabilitiesLong Term Debt-
933,000-1,789,000-2,039,000-2,190,000-2,506,000-2,250,000-
2,617,000-2,617,000-2,339,000-2,357,000-2,177,000-2,084,000-
2,090,000-3,187,000-1,704,000-2,169,000-1,850,000-1,197,000-
972,000-961,000Group Loans (long t.)Director Loans (long
t.)Hire Purch. & Leas. (long t.)-106,000-97,000-115,000-
137,000-169,000-161,000-139,000-124,000-54,000-59,000-
48,000-49,000-51,000-52,000-290,000-286,000-180,000-
176,000-133,000 ∟ Hire Purchase (long t.) ∟ Leasing (long t.)-
106,000-97,000-115,000-137,000-169,000-161,000-139,000-
124,000-54,000-59,000-48,000-49,000-51,000-52,000-290,000-
286,000-180,000-176,000-133,000Preference SharesOther Long
Term Loans-827,000-1,692,000-1,924,000-2,053,000-2,337,000-
2,089,000-2,478,000-2,493,000-2,285,000-2,298,000-2,129,000-
2,035,000-2,039,000-3,135,000-1,704,000-1,879,000-1,564,000-
1,017,000-796,000-828,000Total Other Long Term Liab.-
2,178,000-1,835,000-979,000-920,000-569,000-527,000-
177,000-138,000-120,000-108,000-100,000-107,000-76,000-
32,000-26,000-25,000-35,000-26,000-28,000-32,000Accruals &
Def. Inc. (long t.)-330,000-301,000-285,000-256,000-194,000-
170,000-137,000-117,000-106,000-92,000-89,000-33,000-
30,000-26,000Other Long Term Liab.-1,848,000-1,534,000-
694,000-920,000-313,000-333,000-7,000-1,000-3,000-2,000-
8,000-18,000-43,000-2,000-25,000-35,000-26,000-28,000-
32,000Provisions for Other Liab.-557,000-407,000-300,000-
366,000-292,000-256,000-286,000-349,000-234,000-210,000-
152,000-384,000-237,000-95,000-332,000-308,000-300,000-

231,000-78,000-48,000Deferred Tax-397,000-241,000-172,000-
237,000-215,000-227,000-247,000-286,000-172,000-144,000-
95,000-321,000-168,000-173,000-234,000-190,000-
172,000Other Provisions-160,000-166,000-128,000-129,000-
77,000-29,000-39,000-63,000-62,000-66,000-57,000-63,000-
69,000-95,000-159,000-74,000-110,000-59,000-48,000Pension
Liabilities959,000-257,000-974,000-408,000-708,000-737,000-
766,000-471,000-340,000-421,000-309,000495,000-103,000-
658,000Balance sheet Minorities-2,000-1,000-79,000-85,000-
81,000-69,000-61,000-53,000-49,000Long Term Liabilities-
2,709,000-4,288,000-4,292,000-3,884,000-4,075,000-3,772,000-
3,847,000-3,575,000-3,033,000-3,096,000-2,738,000-2,080,000-
2,506,000-4,051,000-2,147,000-2,583,000-2,254,000-1,515,000-
1,131,000-1,090,000Net
assets8,456,0007,411,0006,872,0006,365,0005,539,0006,003,00
05,733,0005,629,0005,424,0004,966,0004,376,0004,935,0004,3
49,0003,886,0004,374,0005,104,0005,003,0004,848,0004,911,0
004,742,000Shareholders FundsIssued
Capital630,000627,000625,000550,000548,000545,000541,0005
38,000535,000532,000501,000499,000495,000489,000620,0004
86,000484,000484,000483,000481,000Ordinary
SharesPreference SharesOther SharesTotal
Reserves7,826,0006,784,0006,247,0005,815,0004,991,0005,458,
0005,192,0005,091,0004,889,0004,434,0003,875,0004,436,0003
,854,0003,397,0003,754,0004,618,0004,519,0004,364,0004,428,
0004,261,000Share Premium
Account1,147,0001,130,0001,120,0001,114,0001,108,0001,091,
0001,075,0001,061,0001,048,0001,033,000909,000896,000857,
000782,000761,0001,438,0001,424,0001,421,0001,401,0001,37
9,000Revaluation
Reserves22,00022,00022,00039,00039,00039,000Profit (Loss)
Account4,763,0003,789,0003,190,0003,370,0003,057,0003,560,
0004,060,0003,715,0003,374,0002,963,0002,477,0002,366,0002
,184,0001,948,0002,424,0003,158,0003,073,0002,904,0002,988,
0002,843,000Other
Reserves1,916,0001,865,0001,937,0001,331,000826,000807,000

57,000315,000467,000438,000489,0001,174,000813,000667,000
547,000Shareholders
Funds8,456,0007,411,0006,872,0006,365,0005,539,0006,003,00
05,733,0005,629,0005,424,0004,966,0004,376,0004,935,0004,3
49,0003,886,0004,374,0005,104,0005,003,0004,848,0004,911,0
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Profit & Loss accountJ SAINSBURY PLCProfit & Loss
account3/9/193/10/183/11/173/12/163/14/153/15/143/16/133/17/
123/19/113/20/103/21/093/22/083/24/073/25/063/26/053/27/043
/29/033/30/023/31/013/31/00th GBPth GBPth GBPth GBPth
GAAPUK GAAPUK
GAAPTurnover29,007,00028,456,00026,224,00023,506,00023,7
75,00023,949,00023,303,00022,294,00021,102,00019,964,0001
8,911,00017,837,00017,151,00016,061,00015,409,00017,141,00
017,430,00017,162,00017,244,00016,271,000 ∟ National
Turnover23,949,00023,303,00022,294,00021,102,00019,964,00

018,911,00017,837,00017,151,00016,061,00015,202,00014,586,
00014,118,00014,444,00013,871,000 ∟ Overseas
Turnover207,0002,844,0003,044,0002,800,0002,400,000Cost of
Sales-27,000,000-26,574,000-24,590,000-22,050,000-
22,567,000-22,562,000-22,026,000-21,083,000-19,942,000-
18,882,000-17,875,000-16,835,000-15,979,000-14,994,000-
14,726,000-15,658,000-16,039,000-15,905,000-16,082,000-
15,201,000Exceptional Items pre GPOther Income pre GPGross
Profit2,007,0001,882,0001,634,0001,456,0001,208,0001,387,00
01,277,0001,211,0001,160,0001,082,0001,036,0001,002,0001,1
72,0001,067,000683,0001,483,0001,391,0001,257,0001,162,000
1,070,000Administration Expenses-1,733,000-1,415,000-
1,207,000-850,000-1,132,000-444,000-457,000-419,000-
417,000-399,000-420,000-502,000-669,000-839,000-850,000-
827,000-717,000-632,000-629,000-542,000Other Operating
Income/Costs pre
OP38,00051,000215,000101,0005,00066,00067,00082,000108,0
0027,00057,00030,00017,0001,000Exceptional Items pre
OPOperating
Profit312,000518,000642,000707,00081,0001,009,000887,0008
74,000851,000710,000673,000530,000520,000229,000-
167,000656,000674,000625,000533,000528,000Other
Income4,00012,000-37,000-
11,0008,00028,00024,00028,00060,000138,000-111,000-
2,00036,00025,00048,00078,00060,0001,000Total Other Income
& Int. Received26,00031,000-
3,0008,00027,00048,00043,00063,00092,000171,000-
59,00081,00064,00030,00036,00025,00048,00078,000Exception
al Items273,00014,00050,000-4,000-20,00052,000 ∟ Profit
(Loss) on Sale of Operations ∟ Costs of Reorganisation ∟
Profit (Loss) on Disposal ∟ Other Exceptional ItemsProfit
(Loss) before Interest
paid338,000549,000639,000715,000108,0001,057,000930,00093
7,000943,000881,000614,000611,000584,000259,000142,00069
5,000772,000699,000573,000581,000Interest
Received22,00019,00034,00019,00019,00020,00019,00035,0003

2,00033,00052,00083,00064,00030,000Interest Paid-99,000-
140,000-136,000-167,000-180,000-159,000-142,000-138,000-
116,000-148,000-148,000-132,000-107,000-155,000-127,000-
85,000-105,000-128,000-139,000-72,000 ∟ Paid to Bank-
151,000-148,000-6,000-132,000-103,000-152,000 ∟ Paid on
Hire Purchase ∟ Paid on Leasing-7,000-7,000-8,000-9,000-
8,000-7,000-2,000-4,000-3,000-3,000-3,000 ∟ Other Interest
Paid-92,000-133,000-128,000-158,000-180,000-135,000-
136,000-112,000-139,000-1,000Net Interest-77,000-121,000-
102,000-148,000-161,000-139,000-123,000-103,000-84,000-
115,000-96,000-49,000-43,000-125,000-127,000-85,000-
105,000-128,000Profit (Loss) before
Tax239,000409,000503,000548,000-
72,000898,000788,000799,000827,000733,000466,000479,0004
77,000104,00015,000610,000667,000571,000434,000509,000Ta
xation-20,000-100,000-126,000-77,000-94,000-182,000-
174,000-201,000-187,000-148,000-177,000-150,000-153,000-
46,00050,000-206,000-206,000-200,000-168,000-162,000Profit
(Loss) after Tax219,000309,000377,000471,000-
166,000716,000614,000598,000640,000585,000289,000329,000
324,00058,00065,000404,000461,000371,000266,000347,000Ex
traordinary ItemsMinority Interests-4,000-8,000-7,000-7,000-
4,0002,000Profit (Loss) for period [=Net
income]219,000309,000377,000471,000-
166,000716,000614,000598,000640,000585,000289,000329,000
324,00058,00061,000396,000454,000364,000262,000349,000Di
vidends-224,000-212,000-232,000-234,000-330,000-320,000-
308,000-285,000-269,000-241,000-218,000-178,000-140,000-
131,000-244,000-301,000-298,000-285,000-274,000-
274,000Retained Profit(Loss)-5,00097,000145,000237,000-
496,000396,000306,000313,000371,000344,00071,000151,0001
84,000-73,000-183,00095,000156,00079,000-
12,00075,000Depreciation652,000659,000655,000550,0001,085,
000628,000504,000486,000468,000466,000453,000463,000479,
000449,000759,000423,000393,000358,000409,000410,000 ∟
Depreciation Owned

Assets649,000659,000600,000559,000545,000536,000504,0004
86,000468,000466,000453,000463,000479,000449,000 ∟
Depreciation Other Assets92,000 ∟ Impairment
Tangibles3,00055,000-9,000540,000Audit
Fee3,2002,2001,7007001,0009008007007007007007008008006
006006001,0001,0001,000Non-Audit
Fee6002002001002003002002003006001,0008006007007002,80
01,4002,00013,0005,000 ∟ Tax
Advice100100100600500300300 ∟ Non-Tax Advisory
Services600200100100100200200200300600400300300400 ∟
Other Auditors Services ∟ Non-Audit Fees paid to Other
AuditorsTotal Amortization and
Impairment143,00072,00028,00025,00042,00016,00013,00013,0
0014,00013,00015,00018,00021,00021,0005,00011,00013,00014
,00016,00012,000 ∟
Amortisation143,00072,00028,00025,00034,00015,00013,00013
,00014,00013,00015,00018,00021,00021,000 ∟
Impairment8,0001,000Total Operating Lease
Rentals734,000742,000705,000556,000588,000503,000478,0004
52,000429,000405,000396,000355,000332,000269,000 ∟ Hire
of Plant &
Machinery88,00090,00080,00073,00072,00018,00055,00052,00
0 ∟ Land & Building or Property Rents &
Other646,000652,000625,000483,000516,000485,000423,00034
4,000355,000332,000269,000Research & DevelopmentForeign
Exchange Gains/Losses12,00054,000-7,000-24,000-
12,0006,0006,0005,000-
6,00010,0002,0006,000Remuneration3,170,0003,134,0002,878,0
002,541,0002,445,0002,435,0002,322,0002,173,0002,119,0002,
075,0002,003,0001,957,0001,785,0001,793,0001,658,0002,000,
0001,913,0001,910,0001,803,0001,810,000 ∟ Wages &
Salaries2,822,0002,811,0002,579,0002,272,0002,180,0002,150,
0002,051,0001,923,0001,859,0001,823,0001,758,0001,682,0001
,583,0001,565,0001,464,0001,793,0001,739,0001,735,000 ∟
Social Security
Costs189,000186,000165,000148,000144,000141,000133,00012

4,000132,000128,000121,000116,000122,000101,00095,000118,
000101,000104,000 ∟ Pension
Costs120,000104,000102,00098,000100,000111,000105,00099,0
0093,00082,00084,000106,00042,000104,00099,00089,00073,00
071,000 ∟ Other Staff
Costs39,00033,00032,00023,00021,00033,00033,00027,00035,0
0042,00040,00053,00038,00023,000Directors'
Remuneration9,5878,0635,0905,5753,9148,5627,0776,2376,872
7,1134,6884,6313,5072,8926,7073,2544,2014,0005,0005,000 ∟
Directors'
Fees2,3092,2631,7221,5661,7072,0672,0253,0053,1332,7852,60
72,3791,8241,7552,913 ∟ Pension
Contribution625613477438473547519546597537501423246197
∟ Other
Emoluments6,6535,1872,8913,5711,7345,9484,5332,6863,1423,
7911,5801,8291,4379401,288Highest Paid
Director3,8813,4292,3492,8021,5073,9453,2242,6372,6553,348
2,0482,1761,9211,4713,2528521,2191,0001,0001,000EBITDA1,
107,0001,249,0001,325,0001,282,0001,208,0001,653,0001,404,
0001,373,0001,333,0001,189,0001,141,0001,011,0001,020,0006
99,000597,0001,090,0001,080,000997,000958,000950,000Numb
er of
employees116,400121,200118,700108,300107,000107,000105,0
00101,90099,30097,30097,30098,60095,50096,20097,400113,60
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2f2000http://fame1.be.bvdep.net/fame/1/Companies/JordansDoc
uments/DownloadLastFile?rid=internal:28957&closingDate=11
%2f03%2f2017http://fame1.be.bvdep.net/fame/1/Companies/Jor
dansDocuments/DownloadLastFile?rid=internal:28957&closing
dLastFile?rid=internal:28957&closingDate=19%2f03%2f2011
Cash Flow statementJ SAINSBURY PLCCash Flow
statement3/9/193/10/183/11/173/12/163/14/153/15/143/16/133/1
7/123/19/113/20/103/21/093/22/083/24/073/25/063/26/053/27/0
43/29/033/30/023/31/013/31/00th GBPth GBPth GBPth GBPth

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