Financial accounting Essay Example | Topics and Well Written Essays - 4000 words

Financial accounting - Essay compositors caseLiquidity Analysis12Investment Analysis13Part B15Findings15Recent Developments16Recommendations17Part C17About IASB & FASB17Transitional Reliefs18Conclusion19References20Appendices24IntroductionThis project is divided into three give outs. The first surgical incision includes the comparative analysis of the two UK-based companies- J Sainsbury Plc and Tesco Plc, based on the financial statements and other relevant information provided in the companies 2011 annual reports. This includes the ratio analysis and share price movements along with the FTSE 100 movements for the past iv weeks. The second part includes the findings based on the financial analysis from the first part and the recommendations which follow from the findings as to which company has potential for better long investment. The third part of the project has the brief history of external Accounting Standards Board (IASB) and Financial Accounting Standards Board (FASB) and a list of transitional reliefs granted by the two boards for the retrospective application of a new revenue standard to ensure the comparability of revenues across all reporting periods.Objectives of the ProjectThe objectives of this project areTo make a comparative analysis of Sainsbury and Tesco with the process of ratio analysis, share movements and related industry news To recommend which company would be better for long-term investment.... The analysis and interpretation is also helped by studying the business news related to the retailers industry. The four transitional reliefs related to the revenue recognition standard the IASB and FASB have granted in June 2011, are discussed. Part A Background of Sainsbury & Tesco John James Sainsbury and his wife founded Sainsbury in 1869 with only one retail store in London. Since then it has mountn the largest retailer in UK with 934 stores consisting 377 convenience stores and 557 supermarkets. It has a joint ownership in Sainsbury banking company along with Lloyds Banking Group. The company also has 2 property joint ventures with The British filth Company Plc and Land Securities Group Plc. In the year 2010/11 Sainsbury grew by average growth rate of 8.5% in terms of space. It was the first retailer to open a bank in UK and the bank provides loans, credit cards, insurances and savings (J Sainsbury Plc, 2011). Sainsbury operates in 5 strategic areas driven 5 key values Great food, general and merchandise clothing, completing services and channels, new business development, and creating property value and growing space (J Sainsbury Plc-a, 2011). Tesco was founded by Jack Cohen in 1919 in London. The company has a vision to be highly valued by the community, customers, staff and shareholders and to begin a modern innovative and growth company applying skills globally (Tesco Plc, 2011). The company has a seven part strategy to expand its business with sustainable long-term growth Grow the core business in UK , be an outstanding online and store international retailer, become strong in other businesses besides food, grow retail services in all