Imagine that you have £10,000 that you are willing to invest in shares. What follows are the 2014 financial statement of Sainsbury’s plc – a supermarket. You can find the 2014 financial statements of its competitor Tesco plc on the company website. Go to www. tescoplc.com and search for investor reports results and presentations. Note that financial statements are included on the Investors rather than Retail part of the supermarket’s website.
(a) Calculate the seven key ratios discussed in the chapter using the information on the following pages and from the Tesco website mentioned above and conclude which of the two companies would be a better investment.
(b) List some of the limitations of the data that you used in answering part (a) of the question.