Individual report (2,000 words +/- 10%) You are required to produce an individual report comprising two main sections: A and B. · Section A (approximately 1,700 words) will present a financial...

Executive Summary:
This report is a financial analysis of the UK based supermarket chain, Sainsbury and its competitor Tesco. In this report, at first the overall supermarket industry of UK has been analysed to identify the changing trends and its current financial conditions. The sales figures of both companies were analysed along with three important ratios including net profit margin, current ratio and debt to equity ratio. The analysis revealed that both the companies need to improve performance and adopt various strategies in order to sustain in the long run.
In the end, self-reflections have been drawn based on the learnings of the whole module.
Contents
Executive Summary:    1
Section A:    3
Introduction:    3
Sector Overview:    3
Sales analysis:    5
Ratio and financial analysis:    6
Conclusions:    8
Section B:    9
References:    10
Appendix:    12
Section A:
Introduction:
Before making investment in an organization, it is important to assess if the company is performing properly. Even though the main aim of a business organization is to generate revenue and profits yet there are other factors which need to be analysed to ensure the long-term sustainability of the organization and its overall financial health (Blum and Dacorogna 2014). Financial analysis is done by investors as well as analysts.
This report has been prepared on the second largest supermarket chain of UK, Sainsbury. The company is operating since 1869 and by 2019, the number of estimated stores is 1,428 and employ around 153,000 people. Around 60% of the staffs are women and so the company attempts to bring gender quality organizational culture.
Tesco is one of the main competitors of the company and the results of the company has been compared with that to analyze its performance. It is also a multinational supermarket chain based in Britain. It is in operation since 1919 and currently is the third largest retailer in the world in terms of revenue.
Sector Overview:
The supermarkets in UK sells all the necessary goods along with several luxury products like retail of fruits and vegetables, bakery products, dairy products, grocery items, beverages, frozen foods, other food items along with general merchandises. The supermarket industry in UK has already suffered heavily during the past five years as the tastes and preferences of the consumers have changed. Not only supermarket retail, but almost every retail sector is facing change due to the change in demography and lifestyle (Ritchie, Elliott and Flynn 2010). The new generation is different than the prior and their behaviours are completely different. Both the companies, Sainsbury and Tesco operate in this market and holds large chunks of market share.
In order to keep people healthy, government has levied taxes on unhealthy and junk food products like cold drinks, alcohol drink etc. But the supermarket has not been successful in transferring those taxes properly to the consumers, this led to incur of losses in some aspects (Sogn-Grundvåg, Larsen and Young 2013). Increase in awareness among customers for the earth and its environment has increased the demand for vegan products. Supermarket has been able to sell more premium vegan products and a huge part of the profits came out of that.
The organisations have faced immense competition not only from the domestic supermarket chains but also from international retail chains. Online retailers like Alibaba, Amazon are posing immense threat to the existing supermarket chains (Cavallo 2018). The new technology savvy generation prefer to order their products online rather than vising supermarkets. The global pandemic, covid 19 has added to that. As people were confined within their homes due to lockdown and quarantines, they relied on online retailers to deliver goods at their doorsteps. This led to many chains with stores to convert the stores into warehouses and are hiring people to deliver goods directly to the consumers. Food products brought the highest profit during the pandemic time.
Digital revolution is huge and has changed almost all the business sectors. The business models and ways need to be changed in order to sustain in the long run. The existing supermarket retail chains also need to adopt that by selling through websites and apps and providing huge discounts along with making fast delivery.
Sales analysis:
The past five-year group revenue figures of Sainsbury and Tesco has been presented in the following table. The figures have been taken from the company websites and has been presented in £ (Millions).
    Year
    Sainsbury
    Tesco
    2020
    28,993
    64,760
    2019
    29,007
    63,911
    2018
    28,456
    57,493
    2017
    26,224
    55,917
    2016
    23,506
    53,933
The revenue of Tesco has...