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INTRO The company which is being investigated is Sainsburys Plc which along with Tescos Asda is one of the 3 main supermarkets in the UK Currently Sainsburys are 3rd and are ever closing the gap between themselves and their competitors ahead The purpose of this report is to analyze the financial accounts of this company comparing in detail the past two years A detailed evaluation of the performance over the past 5 years will be made using relevant ratios and profitability figures to highlight any possible trends A general performance evaluation of the companys use of cash will be made Any Financial Reporting Standards FRS which the company adhere to will be highlighted and an evaluation of how these FRS affect the companys accounts will be looked at Financial reporting standards FRS Due to the factual nature of the accounting world the need for stringent provisions is apparent The provisions of the Companies Act 1985 were amended by the Companies Act 1989 This legislation also made possible the voluntary revision of accounts Therefore Sainsburys as with its competitors are subject to the requirements of this act which demand strict legislation regarding a companys accounts They therefore have to adhere to the FRS they deem necessary and they have to show evidence of this in their accounts The company values its tangible fixed assets ie buildings land at historic costs Choosing to provide depreciation on a straight-line basis over the anticipated useful economic lives of the assets By doing so they are following the transitional provisions in the FRS 15 regarding total fixed assets The Reporting Standard recognizes that due to macro-economical forces prices may increase or decrease over time which may result in a change in the purchasing power of money By stating that the open market value would significantly exceed the net book value of 6 billion they are letting potential investors know that a current valuation of their
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