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BTEC National Certificate in Business (e-Business) Unit 2 - Investigating Business Resources (Assignment Three) Task (P5 / P6) Sainsbury's - Ratio Analysis 2006 (£m) 2007 (£m) Sales 16,061 17,151 Cost of Sales 14,994 15,979 Net Profit 104 477 Gross Profit 1,067 1,172 Current Assets 3,820 1,915 Current Liabilities 4,810 2,721 Stock 576 590 Average Stock 568 583 Debtors ---- ---- Creditors 2,094 2,267 Fixed Assets + Net Current Assets 12,747 9,576 Calculations Ratio Analysis 2006 2007 Profitability Gross Profit percentage of Sales = Gross Profit for year x 100 Sales for year 1,067 x 100 16,061 = 6.6% 1,172 x 100 17,151 = 6.8% Net Profit percentage of Sales = Net Profit for Year x 100 Sales for Year 104 x 100 16,061 = 0.6% 477 x 100 17,151 = 2.8% ROCE (Return on Capital Employed) = Net Profit for Year before interest rate and Tax x 100 Fixed + net Current Assets 104 x 100 12,747 = 0.8% 477 x 100 9,576 = 5.0% Liquidity Current Ratio = Current Assets Current Liabilities 3,820 4,810 = 0.8:1 1,915 2,721 = 0.7:1 Acid test Ratio/Liquidity Ratio Current Assets - Stock Current Liabilities 3,820 - 576 4810 = 0.7:1 1,915 - 590 2721 = 0.5:1 Efficiency/Working Capital Management Stock Turn over = Average Stock x 365 Cost of Goods Sold 568 x 365 14,994 = 14 Days 583 x 365 15,979 = 13 Days Debtors Collection Period = Debtors x 365 Credit Sales for Year ----- ----- Creditors Payment Period Creditors x 365 Credit Purchase for Year ----- ----- Sainsbury's...

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