8. Relative cost of goods sold Source: Competition Commission 2000 Company Lines % of average (top 5 lines) % of lines bought for less than average Tesco 126 96.2 80 Sainsbury’s 125 97.7 74 Asda 127 97.8 66 Morrisons 122 99.8 46 Netto 24 104.2 21 Waitrose 103 104.4 23 Booths 74 104.7 26
9.
10.
11. Measures of success CRITICAL SUCCESS FACTORS MEASURES AND TARGETS Volume growth Turnover % increased * Leadership in sector Market share increase Profitability Increase in ROI Value of business Increase in share price relative to sector
12.
13. Productivity measures Source: IGD 2000 Company Sales £ per sq m Sales £000 per FTE employee Tesco 92 146 Sainsbury’s 98 139 Asda 81 163 W H Smith 33 112 Superdrug 37 122 M & S 51 160
14.
15.
Editor's Notes
Productivity – sales/sq foot etc Efficiency – stockturn, fixed asset t/o, trade debtor collection period, trade creditor collection period Effectiveness – profitability ratios: ROCE, GP, net profit, mark-up Could divide into: Profitability Efficiency Liquidity – acid test (current assets – stocks/current liabilities) Investment – PE ratio (market price per share / earnings per share), earnings per share, capital gearing (debt/total equity)
GP – sales less cost of sales Gross profit ratio = gross profit / sales revenue x 100 Operating profit (EBIT – Earnings Before Interest & Tax) Net profit – total revenue – total expenses ROCE – primary ratio – profit before tax & interest / year end capital employed x 100 – could an investor have earnt more elsewhere
![Price and financial control –topics ,[object Object],[object Object],[object Object],[object Object]](data:image/gif;base64,R0lGODlhAQABAIAAAAAAAP///yH5BAEAAAAALAAAAAABAAEAAAIBRAA7)