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

Financial accounting - Essay ExampleLiquidity Analysis12Investment Analysis13Part B15Findings15Recent Developments16Recommendations17Part C17About IASB & FASB17Transitional Reliefs18Conclusion19References20Appendices24IntroductionThis project is divided into three parts. The first part includes the comparative analysis of the cardinal 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 one hundred movements for the past four 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 split up long-term investment. The third part of the project has the brief history of International 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 digestThe objectives of this project areTo make a comparative analysis of Sainsbury and Tesco with the help 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 similarly helped by studying the business news related to the sellers industry. The four transitional reliefs related to the revenue knowledge 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 grown the largest retailer in UK with 934 stores consisting 377 convenience stores and 557 supermarkets. It has a joint ownership in Sainsbury Ban k along with Lloyds Banking Group. The company also has 2 property joint ventures with The British Land Company Plc and Land Securities Group Plc. In the year 2010/11 Sainsbury grew by average growth treasure 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 determined 5 key values Great food, general and merchandise clothing, complementary 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 become a modern innovational 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 spunk business in UK, be an outstanding online and store international retailer, become strong in other businesses besides food, grow retail services in all