Carry Out Ratio Analysis for the Last 3 years about Morrison (UK)

RATIO ANALYSIS OF MORRISONS
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Ratio Analysis of Morrisons (UK)
Wm Morrison Supermarkets plc, also known as Morrisons, is one of the largest and most famous supermarkets in the United Kingdom, having its headquarters in Bradford, West Yorkshire. The store has been around since 1899, and it started its operation as a butter and egg stall in Rawson Market, Bradford. Today, the company has its physical locations in Gibraltar, Scotland, Wales and the South of England. In order to determine the ratio analysis of Morrisons, we will first look at its profitability ratio. Various investors are concerned about the profitability of this company as profitability helps them determine the long-term goals of the brand and allows them to understand what will be the returns for their investments. If Morrisons manages its resources carefully, it will automatically be able to produce more profits and to come up with the expectations of both customers and investors.
Return on Capital Employed (ROCE)
The Return on Capital Employed for the last three years are as follows:
ROCE = Operating ProfitCapital Employed×100
Company Name

2015

2016

2017

WM Morrison

(671÷6202) × 100 = 10.8 %

(907 ÷ 6608) × 100 = 13.72 %

(904 ÷ 7063) × 100 = 12.8 %

From this table, it is evident that the financial status of Morrisons in 2015 was not as efficient as it was the next year, in 2016. Again, in 2017, it went down by 1 percent compared to the previous year. At the same time, the revenues of Wm Morrison’s PLC have grown from 15.40 billion to 16.47 billion, and its net income has increased from 597 million to 633 million, giving the company good net income.
Net Profit Margin (NPM)
The net profit margin of Morrisons is as follows:
NPM = Operating ProfitRevenue×100
Company Name

2015

2016

2017

WM Morrison

(671 ÷ 14528) × 100 = 4.62%

(907 ÷ 15410) × 100 = 5.90%

(904 ÷ 14679) × 100 = 5.48 %

Wm Morrison Supermarkets’ PLC has been converting the revenues into profits efficiently. From this table, it is evident that the company is capable of converting its revenues into operating profits and hence can pay a fixed price and debt.
Asset Turnover (AT)
AT = RevenueCapital Employed×100
Company Name

2015

2016

2017

WM Morrison

(14528 ÷ 6202) = 2.34

(15410 ÷ 6608) = 2.33

(16479 ÷ 7063) = 2.33

A slight decrease in the asset turnover of Morrisons has been found, which indicates that the company may have to revise its policies and terms and conditions. The company has shown a slight increase in its revenues, which demonstrates its capabilities and interest in selling something nice and extraordinarily special to the customers.
Liquidity Ratios
Liquidity rations help analyze the financial position of a company. It can be regarded as the measure of a company’s ability to increase enough cash whenever in need, indicating whether it can fulfill...