Financial Analysis Of J Sainsbury PLC And Morrison PLC Essay

Financial Analysis Of J Sainsbury PLC And Morrison PLC - Essay Example Although short term liquidity of Sainsbury is lesser than Morrisons, it could be justified by the fact that the company has more working capital available as compared to Morrisons. This proves the liquidity health of the Sainsbury as against Morrisons. The receivable’s turnover rate of the Sainsbury is more than the competitor which is because of the fact that the company is focusing on expanding the customer base. Once the customer relationship is developed, it would be easier for Sainsbury to lock the customers and attract them to purchase more. It is evident from the inventory turnover rate that both the companies fetch the sales from inventory in a reasonable period of time. This shows that Sainsbury is working as per planning; its sales are increasing but they are not over-stocking as it will disturb their short term liquidity ratio.The debt ratio of both the companies is similar which indicates that this ratio is maintained across the industry. The ratio reveals positive results as 50% of the assets are financed by equity financing. This reduces the role of external creditors affecting the decisions of Sainsbury. Despite the fact that interest coverage of Morrison’s is much better than Sainsbury, it does not affect the decision to invest in Sainsbury. Despite the lower interest coverage of Sainsbury, its interest expenses are still 6 times lesser than its operating profit which shows that there is no potential threat of credit risk or bankruptcy for the company.

M & A Coursework Example | Topics and Well Written Essays - 3000 words

M & A - Coursework Example The combination of two domestic companies is an important business and economic undertaking because in many instances, such will assure the survival of an entity in the face of changing competitive structures or politico-legal mandates pertaining to the industry (Vaara, 2001). Cross-border M&As, on the other hand, gain a special importance because they play a vital role in foreign direct investment (FDI), directly impacting upon the entry of additional equity in the host economy, and providing an additional source of income investment for the home company. Organizations are comprised of persons real and natural, with all their complexities and idiosyncracies. The human element will be a consideration that will permeate all aspects of the post- M&A integration process. For local companies, this means the combination of two organizational cultures into one. ... People, who are normally resistant to change, will naturally seek to enforce their own accustomed cultures, and resist the adoption of the other. Cross-border M&A is specifically defined as â€Å"an activity in which an enterprise from one country buys the whole asset or controlling percentage of an enterprise in another country (Zhu & Huang, 2007). In the process of cross-border mergers and acquisitions, the enterprises involved are prone not only to conflicts between their organizational cultures, but also their national cultures. This makes the problem of cultural integration more difficult, because national cultures are more closely equated with a sense of national pride and patriotism. Moreover, they often have profound religious or ethical implications more deeply ingrained in the psyche of a nation by centuries of social conditioning. The task of cultural integration of cross-border M&As, therefore, becomes double significant in that it seeks to create a new corporate culture out of two sets of organizational and national cultures, by harmonizing the synergistic elements and eliminating the conflicts (Zhu & Huang, 2007). The stages of mergers and acquisitions The merger or acquisition process is not a single event, but a series of stages that must be understood in order to determine the most effective manner by which integration can be carried out. This is because corporate integration is intimately related to the decision-making stage of the acquisition itself, not separate from it, and events and decisions during the intermediary stages influence the manner in which integration shall proceed. Tanure, Cancado, Duarte & Muylder (2009, pp. 138-142) identify four stages of the merger and acquisition process: 1. The motive behind the acquisition or merger This