Business Essay Example | Topics and Well Written Essays - 1500 words - 5

Business - Essay Example The company currently operates with more than 450 stores. Morison was incorporated in 1899 in Brandford, UK. The company currently has a market cap of GBP 8.02 billion with a share price of GBP 303.3. Safeway is one of the biggest food as well as drug retailers in North America. Within US and Canada the company operated within 1692 stores as of Mar-2011.The Company currently has a market cap of $8.93 billion with current share price of $24.25. Compared to Morrison, Safeway was incorporated in 1990 in California. Analysis The financial statements of both the companies before and after the takeover are as follows: Morrison Balance sheet as of 2010 and 2004: 2010 (million GBP) 2004 (million GBP) Assets Non-current assets 7,666 1,739 Current Assets 1,094 492 Liabilities Current Liabilities (2,152) (814) Non-current Liabilities (1,659) (100) Net Assets 4,959 1,357 Dividends 363 174 Profit Retained 2,008 1,143 Merger Reserve 2,578 Capital Employed 4,949 1,317 Morrison Income statement as o f 2010 and 2004: 2010 (million GBP) 2004 (million GBP) Turnover 15,410 4,959 Cost of sales (14,348) (3,696) Gross Profit 1,062 1,263 Operating profit 907 306 As can be seen above the difference in assets, liabilities, turnover and profits of the company in 6 years after the company acquired Safeway. The turnover has gone up by 210.75% and operating profit has gone up by 195.44%. The nets assets of the company following the takeover have gone up by 265.4%. All these are good signs for the company and represents that the company had followed the positive outlook following the merger. This means that the company has maintained the aggressive growth rate even after the takeover of Safeway in 2004. Next analysis of company would be stock price analysis of past 7 years following the takeover of Safeway. This is discussed as follows: The stock price analysis shows the positive outlook for the company. It shows how the stock has continued to provide return to its investors even after the ta keover of Safeway. The analysis of stock chart for 2004 shows the positive investor sentiment following the takeover. This is also due to high presence of company in retail industry in UK. The food and retail sector represents the biggest industry in the United Kingdom, providing employment to more than four million people in production, manufacturing, retailing and distribution. Retail sector accounted for 9% of the GDP of the country in 2003 (Datamonitor, 2003). In last few years, UK’s supermarkets have been under increasing scrutiny in regard to their treatment with suppliers, in own-label products, still the development of supply networks in the country had been an integral part of supermarket strategies in the past decade. The US$ 9 trillion Retail industry is one of the world’s largest industries and still growing. 47 of the Global Fortune 500 companies & 25 of Asia’s Top 200 companies are retailers. Even as the developing countries are making rapid stride s in this industry, organized Retail is currently dominated by the developed countries with the USA, EU & Japan constituting 80% of world. (Global retail Business) Retail is a significant contributor to the overall economic activity the world over: the total Retail share in the World GDP is 27% while in the USA it accounts for 22% of the GDP. The share of organized Retail in the developing markets ranges between 20% - 55%. Over recent months these three risks have abated or disappeared: †¢