ANALYSIS OF READABILITY OF FINANCIAL REPORTS DURING COVID TIMES ASSIGNMENT SAMPLE
1.0) Introduction
When the whole world was fear stricken due to the devastating impact of the COVID-19 outbreak, at that time a report published by WHO has stolen the peace of mind of people and specially Economists across the world. According to the report by an eminent international organization, “The world is going to face a massive recession in the next couple of years and many business organizations are going to face various hindrances in the next couple of years.” In this adverse situation various organizations, deals in various sectors faced various obstacles in their appropriate business operation.ANALYSIS OF READABILITY OF FINANCIAL REPORTS DURING COVID TIMES ASSIGNMENT SAMPLE
This paper is going to discuss the financial report of Sainsbury Plc and BAE System during COVID times and will also evaluate the readability of the current annual report of both the companies. This paper is also going to evaluate the changes in the revenue and profit of both the companies to find if there is any effect in their overall performance due to the Pandemic situation.
2.0) Discussion
Sainsbury Plc and BAE system PLC are very well known organizations in the U.K. They have been doing their business operation effectively for a long time but due to the devastating outbreak of the Covid 19 virus various companies have faced various problems in their effective business operation and there are various examples where many eminent organizations stopped their business operation as they faced heavy loss in their business operation (Armstrong, et al. 2021). Therefore it is very important to focus on the annual report of both the companies to find whether they faced any major obstacles or not in the pandemic situation.
Figure 1: Revenue of the Sainsbury Company for last five years
(Source:investing.com/equities/sainsbury-income-statement?period_type=annually)
| Changes in Revenue of sainsbury plc | |||||
| Name | Mar 06, 2021 | Mar 07, 2020 | Mar 09, 2019 | Mar 10, 2018 | Mar 11, 2017 |
| Total Revenue | 29,048 | 28,993 | 29,007 | 28,456 | 26,224 |
| Changes in Revenue | 0.189341779 | -0.048287518 | 1.89954149 | 7.843688502 |
Table 1: Calculation of Changes in the Revenue of Sainsbury PLC
(Source: MS Excel)
Figure 1 and table 1 are representing the revenue and the changes in revenue of Sainsbury Plc for the last five years. The data is clearly showing that the revenue of Sainsbury’s increased by 7.843% and 1.899% in the year 2018 and 2019 from the previous year but the revenue of the company decreased by 0.04% in 2020 (Eratalay, et al. 2022). The outbreak of COVID 19 virus decreased the revenue of the organization in 2020 but the company managed to increase their revenue 0.189% in the year 2021 and the revenue figure of the company in 2021 was more than the revenue figure of the company in 2019.
Figure 2: Revenue of BAE system PLC for last Five Years
(Source:investing.com/search/?q=BAE%20system)
| Changes in Revenue of BAE System Plc | |||||
| Name | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 |
| Total Revenue | 19,521 | 19,277 | 18,305 | 16,821 | 17,224 |
| Changes in Revenue | 1.249935966 | 5.042278363 | 8.10707457 | -2.395814755 |
Table 2: Calculation of Changes in Revenue of BAE System PLC
(Source: MS Excel)
Figure 2 and Table 2 are representing the revenue and the changes in the revenue of the BAE system PLC for the last five years (Waller and R 2020). The data in the table are showing that there is no negative impact of the COVID 19 in the revenue of the company; rather the revenue of the company increased by 5.042% in the year 2020 and the company is able to maintain the trend of their increase in the revenue in the year 2021 too.
| Sainsbury | Mar 06, 2021 | Mar 07, 2020 | Mar 09, 2019 | Mar 10, 2018 | Mar 11, 2017 |
| Property/Plant/Equipment, Total – Net | 13,334 | 13,737 | 14,186 | 9,898 | 10,006 |
| Changes | -3.022348883 | -3.268544806 | 30.22698435 | -1.091129521 |
Table 3: Changes in Property, Plant, Equipment of Sainsbury Plc
(Source: MS Excel)
The “tangible fixed asset” of the Sainsbury PlC increased by 30.22% in the year 2019 but due to the outbreak of the COVID 19 the company sold some of their property and plant (McLaughlin, et al. 2021). The figure also indicates that the tangible fixed asset of the company has also decreased by 3.02% in the year 2021.
| Changes in Property Plant of BAE System | |||||
| BAE System | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 |
| Property/Plant/Equipment, Total – Net | 3,943 | 3,708 | 3,575 | 2,365 | 2,230 |
| Changes | 5.959928988 | 3.586839266 | 33.84615385 | 5.708245243 |
Table 3: Changes in Property, Plant, Equipment of BAE SYSTEM PLC
(Source: MS Excel)
Table 3 is showing that the fixed asset of the organization has been increasing with the advancement of time and there is no impact of pandemic situation in the company’s fixed asset generation. The proper utilization of fixed assets can be a great advantage for increasing their effectiveness. The tangible asset of the company also increases by 5.95% in the year 2021 too. Therefore it can be said that the proper utilization of the company is very important and very much required.
Figure 3: Intangible Asset of Sainsbury Plc for last five years
(Source:investing.com/equities/sainsbury-income-statement?period_type=annually)
Figure 3 is representing the Intangible asset (Goodwill and Lease) of the company for the last five years. There is no such impact of the COVID 19 in the intangible asset of the company.
Figure 4: Intangible Asset of BAE System Plc
(Source: investing.com/search/?q=BAE%20system)
Figure 4 is showing that the intangible asset of the company has been increased to 899 from 387 in the year 2021. Therefore it can be said that there is no negative impact of the Pandemic situation in the intangible asset creation of the company.
3.0) Conclusion
The whole paper discussed various key factors regarding the financial condition of Sainsbury’s PLC and BAE System plc. This paper also discussed the impact of the COVID 19 outbreak in the business operation of both the organizations. In the context of Sainsbury plc it is very important to say that they need to focus on these key issues effectively and need to take steps which will be beneficial for them. On the other hand in the context of BAE System Plc it is very important to mention that the company should utilize the opportunity effectively.
Reference List
Journals
Armstrong, S., Mclaughlin, C., Moustafa, M. and Elamer, A.A., 2021. Audit committee diversity and corporate scandals: Evidence from the UK. International Journal of Accounting and Information Management.
Eratalay, M.H. and Cortés Ángel, A.P., 2022. The impact of ESG ratings on the systemic risk of European blue-chip firms. Journal of Risk and Financial Management, 15(4), p.153.
Kim, Y., Atukeren, E. and Lee, Y., 2022. A New Digital Value Chain Model with PLC in Biopharmaceutical Industry: The Implication for Open Innovation. Journal of Open Innovation: Technology, Market, and Complexity, 8(2), p.63.
Kitchen, P.J., 2020. Marketing and sustainability in the 21st Century. Sinergie Italian Journal of Management, 38(1), pp.21-30.
McLaughlin, C., Armstrong, S., Moustafa, M.W. and Elamer, A.A., 2021. Audit committee diversity and corporate scandals: evidence from the UK. International Journal of Accounting & Information Management.
Waller, R., 2020. Contract design for humans: preventing cognitive accidents. Technical Report. Simplification Centre.
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