Accounting Essay Example | Topics and Well Written Essays - 500 words - 15

Accounting - Essay drillOn April 16, 2010 the fellowship release a news story that showcase one of its new advanced products called milk bags. The news release may have influenced the price of the common stock.J Sainsbury plc is the United earths biggest player in the food industry with a market share of 16%. In 2009 the company achieved total revenues of 18,911 one million million pounds. The revenue total was 6% higher than in 2008. Normally great revenues lead to better bottom line results. In the case of Sainsbury the greater revenues did not help the company improve its performance since its net profits decreased between 2009 and 2008. In 2009 the sign of the zodiac had net income of 289 million pounds, a figure that is 40 million pounds raze than the previous year. The net margin of the company was 1.53%, magical spell the industry norm is 1.4% (Dun & Bradstreet, 2010). The return on equity and return on assets of the company were 6.88% and 2.88%. Both figures were low er than the industry average of 11.9% and 5.5% (Dun & Bradstreet, 2010). The current ratio of the company which shows that ability of the firm to pay its short call debt was 0.55. The current ratio industry norm is 1.9 (Dun & Bradstreet, 2010). The results means the firm is underperforming in comparison with the industry and that the firm is at risk of having cash flow problems. The stock price of the company during April faced upwards tendencies. These types of driving are short term fluctuations. Based on the fact that the company is facing liquidity problems and the horrid profitability results in terms in relation to its assets and equity I would not invest in the common stock of