EVALUATION OF THE FINANCIAL AND BUSINESS ANALYSIS OF CARREFOUR PLC, 2009-2011
EXECUTIVE SUMMARY
This work is aimed at making a business and financial analysis of the retail industry case of:
Carrefour Plc and comparatively with Tesco Plc and Sainsbury Plc. In order to conduct this
analysis, the scope will be the published financial statements of the said companies with the
accompanying notes from 2009 to 2011.
The financial analysis will be conducted with the use of ratios and common sizes statements,
analysis in order to conduct a comparative analysis of the profitability, liquidity, efficiency,
gearing and investment potentials of the said companies. PESTEL, SWOT and Porter’s five
forces model will be deployed to conduct the business analysis.
The work is structured in five parts. The first part will focus on a comparative analysis of the
profitability, liquidity, operating and leverages of Carrefour, Sainsbury, and Tesco; the second on
investment potentials of the supermarket sector and the accompanying risk; the third evaluates
working capital management of Carrefour as compared to BP Plc; the fourth is a business
analysis of the supermarket sector with the use of SWOT, PESTEL, Porter’s five forces and the
market outlook and lastly, the impact of the accounting policies on the published financial
statements.
Table of Contents
List of Figures
LIST OF ABBREVIATION
1
INTRODUCTION
According to Pamela Peterson, (2012, p 349) financial statement analysis is a process of
selecting, evaluating and interpreting financial data, along with other pertinent information, in
order to formulate an assessment of the company’s present and future financial condition and
performance. The financial analysis of the retail industry case of Carrefour and comparative with
Tesco, and Sainsbury will be done from the published financial statements and the
accompanying notes from 2009 to 2011.
Campbell, George, and Houston (1999, p 47) asserted that, business analysis is a process of
examining a business internal environment to establish the organisational strengths and
weaknesses and the external environment to establish the opportunities and threats. An analysis
of the retail industry case of Carrefour will be conducted with the use of PESTEL, SWOT
analysis and Porter’s five forces model.
The financial statements under appraisal all comply with international accounting standards as
adopted by European Union Commission Regulation (N° 1606/2002) that requires all European listed
companies to apply IFRS from 2005 in their consolidated financial statements.
The said financial statements for the periods under review show a true and fair view of their
financial position, performance, statement of cash flow, statement of changes in equity and the
notes thereof according to the various audit opinions in the annual reports.
Limitations of the work
I.
II.
III.
IV.
V.
The analysis will focus on publicly available information due to lack of access to internal
data
Acknowledging the weaknesses of financial ratios, analysis will be based on three
accounting periods and in compliance with question requirements.
All analysis will be base on relative values due to differences in currencies used in the
preparation of financial statements.
Common sizes statements will be based on subtotals due to differences of items within
the various financial statements.
Differences in accounting period thus assume yearly financial statements irrespective of
the year end.
2
PART ONE
FINANCIAL ANALYSIS
This part evaluates the trading performance of the supermarket sector case of: Carrefour
comparatively with Tesco and Sainsbury from 2009 to 2011. The analytical tools are ratios and
common sizes statements to evaluate their profitability, liquidity, operating efficiency and
leverage
PROFITABILITY
According to Pamela P. Drake (2012, p 357) profitability is a company’s ability to generate
profit from its sales. This analysis is done with the following ratios: gross profit margin, net
profit margin, return on capital employed and return on equity.
From figure 1.1, 1.2 and 1.3 below, it can be observe that comparatively, Carrefour has the
highest gross profit margin to Tesco and Sainsbury over the three years period. In terms of net
profit margin Tesco has the highest as compared to Sainsbury and Carrefour. The low net profit
margin has ranked Carrefour lowest in terms of return on equity, return on capital employed and
EBITDA while Tesco remain top over the time period due to its highest net profit Margin.
25.00%
COMPARATIVE PROFITABILITY RATIOS 2011
20.00%
15.00%
10.00%
CARREFOUR PLC
5.00%
TESCO PLC
0.00%
SAINSBERRY PLC
-5.00%
ROE
ROCE
G.P Margin
P.Margin
EBITDA to
C. E
CARREFOUR PLC
5.61%
-2.28%
21.57%
-0.58%
5.60%
TESCO PLC
15.79%
12.64%
8.15%
6.17%
13.13%
SAINSBERRY PLC
10.62%
9.50%
5.43%
3.92%
10.41%
Figure1.1: Comparative Profitability ratios 2011
Source: Appendix 1
3
25.00%
COMPARATIVE PROFITABILITY RATIOS 2010
20.00%
15.00%
10.00%
CARREFOUR PLC
5.00%
TESCO PLC
0.00%
ROE
ROCE
G.P Margin
P.Margin
EBITDA to
C. E
CARREFOUR PLC
4.52%
6.77%
21.84%
2.08%
13.23%
TESCO PLC
16.06%
13.29%
8.48%
6.48%
15.71%
SAINSBERRY PLC
11.80%
10.06%
5.50%
4.03%
15.24%
SAINSBERRY PLC
Figure 1.2: Comparative Profitability ratios 2010
Source of data: Appendix 1
25.00%
COMPARATIVE PROFITABILITY RATIOS 2009
20.00%
15.00%
10.00%
CARREFOUR PLC
TESCO PLC
5.00%
SAINSBERRY PLC
0.00%
ROE
ROCE
G.P Margin
P.Margin
EBITDA to
C. E
CARREFOUR PLC
2.74%
6.80%
22.05%
1.91%
14.31%
TESCO PLC
15.94%
11.52%
8.10%
6.07%
16.70%
SAINSBERRY PLC
11.78%
8.81%
5.42%
3.56%
15.88%
Figure 1.3: comparative Profitability ratios 2009
Source: Appendix 1
Carrefour has a very high gross profit margin as compared to its peers as can be seen above
which suggest strong bargaining power over suppliers to keep cost of goods sold lower than
peers. Tesco has a higher net profit margin with an average of about 8.2% as compared to
Sainsbury and Carrefour with the lowest which suggest poor operating expense management.
4
LIQUIDITY
Adrian Buckley et el, (1998, p.47), asserted that, liquidity refers to the ease and quickness with
which assets can be converted to cash. They further explained current ratio and quick ratios as
tools to evaluate liquidity.
From figure 1.4, 1.5 and 1.6, below, Carrefour has the highest current ratio as compared to Tesco
and Sainsbury with the lowest consistently for the three years except for 2009 where Carrefour
and Tesco having the same current ratio of 0.71. The high current ratio of Carrefour indicates
inefficient use of resources as cash is tied in non profit generating assets as compared to peers.
But it should be noted that, the high current ratio of Carrefour could be justified by its balance
sheet closing date 31st December which is at the pick of the trading season as compared to Tesco
of February and Sainsbury March. This is further evident by Carrefour’s lower quick acid test
ratio in 2009 and 2010 as compared to Tesco despite higher in 2011. Sainsbury has the lowest
acid test ratios in the three years period.
0.80
COMPARATIVE LIQUIDITY RATIOS FOR 2011
0.70
0.60
0.50
0.40
CARREFOUR PLC
0.30
TESCO PLC
0.20
SAINSBERRY PLC
0.10
0.00
Current Ratio
Acid Test Ratio
CARREFOUR PLC
0.74
0.48
TESCO PLC
0.64
0.45
SAINSBERRY PLC
0.65
0.35
Figure 1.4: Comparative liquidity ratios 2011
Source: Appendix 3
5
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
COMPARATIVE LIQUIDITY RATIOS 2010
CARREFOUR PLC
TESCO PLC
SAINSBERRY PLC
Current Ratio
Acid Test Ratio
CARREFOUR PLC
0.71
0.46
TESCO PLC
0.65
0.48
SAINSBERRY PLC
0.58
0.31
Figure1.5: Comparative liquidity ratios 2010
Source: Appendix 3
0.80
0.70
COMPARATIVE LIQUIDITY RATIOS 2009
0.60
0.50
0.40
CARREFOUR PLC
0.30
0.20
TESCO PLC
0.10
SAINSBERRY PLC
0.00
Current Ratio
Acid Test Ratio
CARREFOUR PLC
0.71
0.47
TESCO PLC
0.71
0.54
SAINSBERRY PLC
0.66
0.41
Figure 1.6: Comparative liquidity ratios 2011
Source: Appendix 3
OPERATING PERFOMANCE
According to Pamela P. Drake (2012, p 357), operating performance is to evaluate a company’s
effectiveness in putting its assets investment to good use. This is done by analysing the inventory
turnover period, trade receivable period, trade payable period, sales to capital employed and the
operating cycle.
6
4.5
4
3.5
3
2.5
2
1.5
1
0.5
0
COMPARATIVE SALES TO CAPITAL EMPLOYED
CARREFOUR
TESCO
SAINSBURY
2011
2010
2009
CARREFOUR
3.92
3.25
3.56
TESCO
2.05
2.05
1.9
SAINSBURY
2.42
2.5
2.48
Figure 1.7: comparative sales to capital employed
Source: Appendix 2
From figures 1.7 above, Carrefour has the highest sales generating capacity as compared to
Tesco and Sainsbury over the period in terms of its sales to capital employed. This is further
evident with its lowest operating cycle compared to Tesco and Sainsbury as shown in figures 1.8,
1.9 and 1.10 below suggesting efficient working capital management. This lowest conversion
cycle is support by trade payable period which double its peers suggesting strong bargaining
power with suppliers despite relative higher receivables period and inventory turnover period.
100.00
COMPARATIVE EFFICIENCY RATIO 2011
80.00
60.00
40.00
20.00
CARREFOUR PLC
0.00
TESCO PLC
-20.00
-40.00
SAINSBERRY PLC
Inv.Turnover
Period
trade rec.
Period
trade payables
period
Coversion
cycle
CARREFOUR PLC
38.51
32.01
86.38
-15.86
TESCO PLC
22.15
27.33
39.25
10.23
SAINSBERRY PLC
16.24
3.68
32.95
-13.02
Figure 1.8: Comparative efficiency ratios for 2011
Source: Appendix 2
7
120.00
100.00
COMPARATIVE EFFICIENCY RATIOS 2010
80.00
60.00
40.00
20.00
CARREFOUR PLC
0.00
TESCO PLC
-20.00
SAINSBERRY PLC
-40.00
Inv.Turnover
Period
trade rec.
Period
trade
payables
period
Coversion
cycle
CARREFOUR PLC
39.91
32.49
95.84
-23.44
TESCO PLC
20.86
29.35
38.17
12.04
SAINSBERRY PLC
14.86
4.86
33.60
-13.88
Figure 1.9: Comparative efficiency ratios for 2011
Source: Appendix 2
COMPARATIVE EFFICIENCY RATIOS 2009
100.00
80.00
60.00
40.00
20.00
CARREFOUR PLC
0.00
TESCO PLC
-20.00
SAINSBERRY PLC
-40.00
Inv.Turnover
Period
trade rec.
Period
trade
payables
period
Coversion
cycle
CARREFOUR PLC
35.66
27.97
90.68
-27.05
TESCO PLC
19.04
25.42
35.77
8.69
SAINSBERRY PLC
13.57
3.14
34.45
-17.73
Figure 1.10: Comparative efficiency ratios for 2011
Source: Appendix 2
8
FINANCIAL LEVERAGE
David Hillier et el (2010, p, 55) Financial leverage is the firm’s ability to meet its obligation.
They further assert that, total gearing, debt to equity, and interest cover can be used to assess
financial leverage.
From figure 1.11, 1.12, and 1.13 below, Carrefour has consistently increased it gearing and debt to equity
ratio by doubling that of Tesco and tripling Sainsbury by 2011. On the other hand Carrefour has not been
able to generate sufficient earnings to mean up with interest payment as illustrated in figure 1.11, 1.12,
and 1.13 below.
The high gearing of Carrefour with associated low interest cover to a negative value in 2011 suggests a
major concern to investors and the company due to increased risk and cost of capital.
COMPARATIVE LEVERAGE ANALYSIS FOR 2011
18.00
16.00
14.00
12.00
CARREFOUR PLC
10.00
8.00
TESCO PLC
6.00
SAINSBERRY PLC
4.00
2.00
0.00
-2.00
Gearing
Debt to Equity
Interest cover
Figure 1.11: Comparative leverage ratios for 2011
Source: Appendix 4
9
COMPARATIVE GEARING ANALYSIS 2010
12.00
10.00
8.00
CARREFOUR PLC
6.00
TESCO PLC
SAINSBERRY PLC
4.00
2.00
0.00
Gearing
Debt to Equity
Interest cover
Figure 1.12: Comparative leverage ratios for 2010
Source: Appendix 4
COMPARATIVE LEVERAGEANALYSIS FOR
2009
9.00
8.00
7.00
6.00
5.00
4.00
3.00
2.00
1.00
0.00
TESCO PLC
CARREFOUR PLC
SAINSBERRY PLC
Gearing
Debt to Equity
Interest cover
Figure 1.13: Comparative leverage ratios for 2011
Source: Appendix 4
10
PART TWO
CARREFOUR INVESTMENT REPORT
Investment Report to Potential and Existing Shareholders of Carrefour Plc
This report aims at evaluating the investment potentials of Carrefour Plc and the associated risk
of investing in the supermarket sector. According to David A, Anne B and Ann B, (2007, p. 862)
argued that investors decisions to buy or sell are influenced by their expected returns in terms of
dividend payment and appreciation in share price. Martin F and Fernando A, (2011, p, 322)
argued investors assess earning, profit potentials, and share price evolution in making buy or sell
decisions.
Earning Performance
The net profit margin and the return on equity of Carrefour show very slide decreases figure 2.1
below despite a negative operating profit margin. Carrefour was able to maintain these ratios due
to an extraordinary item resulting from the disposal of subsidiaries with a gain of €2,580 in 2011
that is 3850.74% of the base year (2009).
Martin F and Fernando A, (2011,p, 322) asserted that growth in earning must be sustainable
sitting Du Pont that in order to interpret the return on equity, the formula needs to be
decomposed as follows:
𝑠𝑎𝑙𝑒𝑠
Return on equity=𝑎𝑠𝑠𝑒𝑡𝑠 ×
𝑖𝑛𝑐𝑜𝑚𝑒
𝑠𝑎𝑙𝑒𝑠
𝑎𝑠𝑠𝑒𝑡𝑠
× 𝑒𝑞𝑢𝑖𝑡𝑦 =
𝑛𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑣𝑎𝑖𝑙𝑎𝑏𝑙𝑒 𝑡𝑜 𝑜𝑟𝑑𝑖𝑛𝑎𝑟𝑦 𝑠ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠
𝑡𝑜𝑡𝑎𝑙 𝑒𝑞𝑢𝑖𝑡𝑦
From figure 2.1 below, it suggests the increase in return on equity is highly influence by the
equity multiplier as depicted by the curves as compare to the net profit margin and the assets turn
over ratios graphs that have almost flatten over the three years period. A number of authors
including Mark T. (2008, pp, 828-829) and Nissim Penman, (2003, pp, 534- 536) argue that an
increase return on equity due to an increase in financial leverage is not sustainable growth due to
the associated financial risk to shareholders. The increasing in gearing with the associated fall in
interest cover indicates greater financial risk to investors thus suggesting the growth in return on
equity of Carrefour not sustainable.
11
Carrefour Dupont Analysis
8.00
7.00
6.00
5.00
4.00
Net profit margin
3.00
2.00
asset turn over
1.00
equity multiplier
0.00
2009
2010
2011
Net profit margin
0.32
0.53
0.45
asset turn over
1.68
1.53
1.75
equity multiplier
5.12
5.60
7.13
return on equity
2.74
4.52
5.61
return on equity
Figure: 2.1 Carrefour DuPont Analyses
Source: Appendix 1
Share Price
According to David A, Anne B and Ann B, (2007, p. 862) price earnings ratio is a measure of the evolution
of share price. The share price on the other hand is the present value of the expected future cash flows.
From the figure 2.2 below, the price earnings ratio decreased from 2007 to 2008 with a slide increase in
2009 and the continued fall till 2011. This price earnings ratio movement depicts the movement of the
share prices of Carrefour as show on figure 2.2 despite not proportion.
400
350
300
250
200
Price per share
150
PRICE EARNING RATIO
100
50
0
2007
2008
2009
2010
2011
Price per share
53.29
27.52
33.56
30.85
17.61
PRICE EARNING RATIO
100.55
74.38
335.60
237.31
160.09
Figure 2.2: Carrefour Price per Share and Price Earnings Ratio
Source: Appendix 5
12
Also, David A, Anne B and Ann B, (2007, p. 862) asserted that investors appraisal of opportunities for the
company and the way in which the top management can react to threats and opportunities in the
market all influence share price and as a result the price earnings ratio. Thus, the consistent fall in the
price earnings ratio suggest low investors’ confidence on future price evolution.
Dividend
Carrefour has managed to maintain a stable dividend policy of €1.08 per share from 2008 until recently
on August 4th, 2012 with a fall of dividend to €0.52. This sharp fall is a warning sign and suggests
financial distress despite an increasing dividend cover figure 2.3
1.2
CARREFOUR COMPARATIVEDIVIDEND RATIOS
1
0.8
0.6
DIVIDENT PER SHARE
0.4
DIVIDENT COVER
0.2
0
2008
2009
2010
2011
DIVIDENT PER SHARE
1.08
1.08
1.08
0.52
DIVIDENT COVER
0.34
0.09
0.12
0.21
Figure 2.3: Carrefour comparative dividend ratios
Source: Appendix 5
Risk
Low growth consumer markets in Europe due to the present economic recession have intensified
competition through price wars to increase sales with a negative effect on earnings.
Inability to control costs and rising input prices the lower margins of Carrefour suggest costs
have major effects on profitability.
Volatility in commercial real estate markets according to Hyunjae Kim, (2010, p5) Retailers are
impacted both directly and indirectly by real estate market volatility.
Inability to penetrate emerging markets “Especially for Western companies, understanding
emerging markets is an undeniable opportunity
Conclusively, despite a slide increase in earnings, the investment climate is not favourable
because the increase is due to an increase in equity multiplier and not earnings to assets. The
13
increase in gearing is increasing risk and cost of capital to investors due to a rapid fall in interest
cover to a negative value in 2011. Lastly, the price earnings ratio indicates investors not
confident on future performance with the associate fall in share price. According to David (2000,
pp 1-11), the decision to invest depends on the investors’ attitude to risk and the purpose of the
investor in the short and long run.
PART THREE
CARREFOUR AND BP WORKING CAPITAL ANALYSIS
This part is aimed at analysing the working capital of Carrefour PLC comparatively with BP
PLC an oil company for three years period. According to Edgar A., Kenneth L and Pamela P,
(2012, p, 305), working capital is the net current assets of a company i.e. the surplus of current
assets over current liabilities. In order to make this comparison, working capital ratios will be
analysis and the use of common sizes statements of Carrefour and BP
Common size analysis
From figures 3.1 and 3.2 below, Carrefour steady increase of currents assets to its total assets of
37.42% in 2009 to 40.17% in 2011 are higher than BP of 28.67 in 2009 to 33.30% in 2011. This
suggest supermarket sector need sufficient inventory to meet customers need as compared to oil
companies. The higher proportion of receivables to total assets suggest extended credit to
increase sales due to intense competition within the supermarket industry as compared to the
highly regulated and high cost of entrance limiting competition in the oil industry. On the other
hand, the current liabilities of Carrefour to total assets wide margin with BP with the associated
account payables almost double BP which suggest strong bargaining power over suppliers for
extended credit.
14
200.00
Carrefour Comparative Common Size WC
150.00
100.00
50.00
0.00
2011
-50.00
2010
-100.00
Total
Total
Receivab Inventor
les, Net
y
Total
current
assets
Account
Total
working
s
current
capital
payable liabilities
2011
15.14
14.29
40.17
32.05
54.45
-14.28
2010
13.58
13.04
37.67
31.31
53.09
-15.42
2009
12.89
12.82
37.42
32.59
52.73
-15.31
2009
Figure 3.1: Carrefour comparative common size working capital
Source: Appendix 10
BP comparative common size WC
120.00
100.00
80.00
60.00
40.00
20.00
0.00
2011
Total
Total
Receivab Inventor
les, Net
y
Total
current
assets
Total
Accounts
working
current
payable
capital
liabilities
2011
14.93
8.76
33.30
11.02
28.77
4.53
2010
13.68
9.63
34.60
10.87
30.81
3.80
2009
12.60
9.58
28.67
10.12
25.14
3.53
2010
2009
Figure 3.2: BP comparative common size working capital
Source: Appendix 10
The negative working capital of Carrefour for the three years period suggest the use of current liabilities
to finance profit generating non-current assets as compared to BP with positive working capital balances
15
for the three years periods which implies long-term liabilities to finance less profit generating current
asset.
Working capital strategy and liquidity
According to Richard Pike and Bill, (1993, p, 399), there are two ways of managing working capital; an
aggressive approach where current liabilities are used to finance permanent current assets and long
term assets. While a relax approach is where long term liabilities are used to finance working capital
needs. It can be observed that Carrefour solely finances its current assets from current liabilities with
about 14% to 15% of non-current assets being finance by current liabilities suggesting an aggressive
approach as compared to BP where about 3.5% to 4.53% of current assets financed by non-current
liabilities thus a relax approach.
COMPARATIVE CURRENT RATIOS
1.40
1.20
1.00
0.80
0.60
BP PLC
0.40
CARREFOUR PLC
0.20
0.00
2009
2010
2011
BP PLC
1.14
1.12
1.16
CARREFOUR PLC
0.71
0.71
0.74
Figure 3.3: comparative current ratio
Source: Appendix 11
16
COMPARATIVE QUICK RATIOS
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
BP PLC
CARREFOUR PLC
2009
2010
2011
BP PLC
0.76
0.81
0.85
CARREFOUR PLC
0.47
0.46
0.48
Figure 3.4: comparative quick ratios
Source: Appendix 11
According to Edgar A., Kenneth L and Pamela P, (2012, p, 305), liquidity is the ability to generate cash
when and where is needed measured by the current ratio and the acid test ratio. Base on figure 3.3 and
3.4 above, Bp out performs Carrefour in terms of current ratio and acid test ratio consistently for the
three years. This suggest Bp is more liquid than Carrefour in terms of the number of times current assets
can be converted to settle current liabilities even after adjusting for inventory( quick ratio)
Working capital ratios
Carrefour has an increasing operating cycle as compared BP deceasing cycle despite far lower as
compared to BP. The increase is associated with decreasing settlement period with fluctuating inventory
turnover period and receivables collection period as observed below
17
140.00
120.00
100.00
80.00
60.00
40.00
2009
20.00
2010
2011
0.00
Inventory
Turnover
(days)
trade
receivables
collection
(days)
trade
payables
settlement
(days)
Cash
Conversion
cycle (days)
2009
44.13
44.10
46.62
41.61
2010
34.08
44.00
38.45
39.63
2011
30.24
41.33
38.04
33.53
Figure 3.5: BP comparative working capital ratios
Source: Appendix 11
300.00
250.00
200.00
150.00
100.00
50.00
2009
0.00
2010
-50.00
2011
-100.00
Inventory
Turnover
(days)
trade
receivables
collection
(days)
trade
payables
settlement
(days)
Cash
Conversion
cycle (days)
2009
35.66
27.97
90.68
-27.05
2010
39.91
32.49
95.84
-23.44
2011
38.51
32.01
86.38
-15.86
Figure 3.6: Carrefour comparative working capital ratios
Source: Appendix 11
18
Carrefour has an increasing operating cycle as compared BP deceasing cycle despite far lower as
compared to BP. The increase is associated with decreasing settlement period with fluctuating inventory
turnover period and receivables collection period as observed below
Conclusively, Carrefour has a more aggressive approach to working capital management thus less liquid.
On the other hand, BP has a more relax approach to working capital thus more liquid as compared to
Carrefour. The trade off between profitability and liquidity on working capital management depend on
the following according to Richard Pike and Bill, (1993, p, 395)




Nature of industry
Type of products
Goods manufactured or bought
The efficiency which working capital is managed.
PART FOUR
CARREFOUR BUSINESS ANALYSIS
s part is aim at evaluating the trading outlook of the supermarket sector with the use of PESTEL, SWOT,
market outlook and Porter’s five forces model.
PESTEL
This work is aimed to scan and analyse the external factors that influence the strategic decisions of
Carrefour group PLC.

Fred R. David, (2001 pp. 104) and Philip R. Walsh, (2005, p, 115), asserted that the aim of
external analysis is to identify key variables that offer actionable responses.
 Respond either offensively or defensively to the factors by formulating strategies to optimise
opportunities or minimise potential threats.
 George S. and Bill H (1999, p, 47), asserted PESTEL as a model to analyse macro environment.
Political Influence
 Hugh Carnegy, (2012, p 6) pressure mounts on the French government according to a report
commission by the President Francoise Holland to cut public spending of about €30 billion
19
 Projected growth of 0.4% according to European Commission on Economic and Financial Affairs,
(2012, pp, 1-3) which is half Paris estimate
Economic influence
 According to European Commission on Economic and Financial Affairs, (2012, pp, 1-3) demand
levels in Europe will remain suppress
 The French retail giant Carrefour operates about 43% of its stores in countries like; Portugal,
Italy, Greece, and Spain Carrefour annual report (2011 )
Technological influence
 According to PWC, (2011, p 5), Online sales are expected to rise by an average of 20% a year in
Asia in the near term and by as much as 40% annually in some markets such as Japan.
Environmental influence
 REAP, (2012)
“Sustainability is a long term challenge for the retail sector and our continued engagement in the
Retailers’ Environmental Action Programme (REAP) is evidence of our commitment to making a
difference. This report shows the impressive progress that the sector has achieved”.
 Voluntary annual corporate sustainability report independently verified Carrefour annual report,
(2012) thus unlikely regulations
Social influence
 Adam P. Vrechopoulos, (2010 p. 519), and Jason S, Bill M, and Dawn B, (2003, pp, 8085)," assert that, there is a shift from physical retail design to customisation of websites to
appeal to individual shoppers due to increase in online shopping.
SWOT
According to Ricky W. (2011, p, 68), and David A and Garry D, (2009,p,131), swot analysis is the
evaluation of an organisation internal strengths and weakness and environmental opportunities and
threats.
STRENGHTS
Localisation

Fabiano Schivardi and Eliana Vivianon (2011) Andrew G. Parsons, (2011) and Bertrand and
Kramarz (2002) have asserted that retail trade is regulated in all European economies
Beneficiaries are always the incumbents like Carrefour.
20
Brand
 Tony Kent, (2003, p, 131), sitting Dawson, (2001) asserted that branding of retailers is a
complex multi-dimensional concept, in which the distinction between goods and services
disappears as the “format becomes the brand”.
 Carrefour has a strong brand according to Abby Trexler, (2012) in terms of simplicity and
experience which is ranked the 9th in the world and the first in its industry.
WEAKNESSES
Slow expansion in Asian
 The Carrefour group has been very slow in its expansion strategy in Asia to compensate for the
poor performance in Europe with low growth potentials especially Italy and Spain
Hypermarket concept
 Market watch, (2012) asserted that, the viability of the company's domestic business model is
being questioned
 In recent years, consumers have shunned the supercenters in favour of more conveniently
located and price-competitive supermarkets Morning star (2012).
OPPORTUNITIES
Emerging Markets
 Emerging markets sustained growth estimated about 6% in the retail Industrial between 2011 to
2015
Online sales
 PWC, (2011, p 5) Online sales are expected to rise by an average of 20% a year in Asia in the
near term and by as much as 40% annually in some markets such as Japan.
Threats
 France likely recession due to political unwillingness to implement reforms
 Carrefour annual report (2011) intense competition and effect on margins
 Restrictive and regulatory laws in Asia
21
CARREFOUR MARKET OUTLOOK
CARREFOUR PLC
INDUSTRIALS
S&P 500INDEX
TESCO PLC
Figure 4.1 Market outlook base on 2007 base year
Source: www.reuters.com
From figure 4.1 above, Carrefour share price has fluctuated with a consistent drop from 2007 to 2009
following the general trends of industrials and Tesco indices though lower than peers. Carrefour pick up
from 2009 despite still below S&P 500 index, industrials and Tesco indices until early 2011 fall despite
S&P 500 index, industrials and Tesco witnesses improvement in the market . The end of 2011 witnessed a
general market down turn and Carrefour still performing below peers with markets picking up towards the
end of 2012 despite general fluctuations.
The market outlook figure above depicts the share price figure 4.2 below.
22
01-Jan-07
01-Apr-07
01-Jul-07
01-Oct-07
01-Jan-08
01-Apr-08
01-Jul-08
01-Oct-08
01-Jan-09
01-Apr-09
01-Jul-09
01-Oct-09
01-Jan-10
01-Apr-10
01-Jul-10
01-Oct-10
01-Jan-11
01-Apr-11
01-Jul-11
01-Oct-11
SHARE PRICE
60
50
40
30
20
SHARE PRICE
10
0
Figure 4.2: Carrefour share price
Source: Appendix 13
23
PORTER’S FIVE FORCES MODEL
According to Schermerhorn, (2010, p146), managers need to craft strategies with an
understanding of the industry within which they are competing. A number of authors including;
A and Garry D, (2009, page, 131), Milind T, (2011, p,78) and Michael D and Ferrel, (2011,p,
122) argue that porter’s model is used to assess industrial attractive in order to shape
competitiveness within an industry.
Bargaining power of buyers
 Special customisation
 Lower price sensitivity
Bargaining power of suppliers




Similar critical production input
High competition among suppliers
Volume is critical to suppliers
Low cost of switching suppliers
Intensity of existing competition
 Relatively few competitors
 Government limit competition
 Increasing price war
Threat of substitutes
 Substitute products are inferior
 Substitute is lower quality
Threat of new entrance
 Customers loyal to existing brands
 Industry require economic of scales
 Geographical future limit
competition
 Advanced technology
24
Figure 4.3: SWOT analysis of supermarket sector case of Carrefour
PART FIVE
ACCOUNTING STANDARDS
The financial statements of Carrefour PLC have been prepared in accordance with international
accounting standards as adopted by the European Regulation (EC N° 1606/2002) (Annual report,
2011, p.26). The said financial statements are based on the accrual concern and the assumption
that the entity is a going concern (IAS 1). All the analyses are referred to the audited annual
financial statements of Carrefour Plc for 2011.
IAS 27 Consolidated and separate financial statements and IAS 28 investment in associates and
Joint Venture.
The Consolidated Financial Statements for the year ended December 31, 2011 comprise the
financial statements of the Company and its subsidiaries in accordance with 1AS 27 and the
Group’s share of the profits and losses, assets and liabilities of associated and jointly controlled
companies in accordance with IAS 28
IFRIC 17 – Distributions of Non-Cash Assets to Owners,
The liability to pay a dividend should be recognized when the dividend is appropriately
authorized and the liability measured at fair value. On July 5, 2011 100% of Dia’s share capital
to Carrefour shareholders, in the form of a special dividend in kind at a fair value of €3.4 on the
Madrid Stock Exchange. Group recorded in shareholders’ equity – Group share, the dividend
recorded in Carrefour SA’s accounts, i.e. €2,230 million
IFRS 5 - Non-Assets Held for Sales and Discontinued Operations.
In accordance with IFRS 5, Dia’s net income for the period up to the date when control was lost
€32 million was included in the carrying amount at June 30 and therefore presented under “Net
income from discontinued operations” as part of the €1,909 million capital gain from the
disposal of Dia’s.
January 7, 2011 Carrefour sold its operations in Thailand to Big C, The capital gain on the
transaction, in the amount of €667 million, is reported in the 2011 income statement under “Net
income from discontinued operations”.
IAS 17 - Leases
On December 27, 2011, the Group sold a portfolio of 97 supermarket properties owned by
Carrefour Property for €365 million which fulfil the criteria for classification as operating leases,
25
as substantially all the risks and rewards incidental to ownership of the asset are retained by the
lessor. The capital gain, recognized in the 2011 income statement was €229 million.
IAS 36-Impairment of Assets
Impairment tests performed on the basis of the revised business plan projections led to
impairment losses of €1,966 million being recorded on goodwill, with Italian goodwill written
down by €1,750 million and Greek goodwill by €188 million.
IAS 12 income taxes
Unrecognized deferred tax assets amounted to €1,621 million at December 31, 2011 (December
31, 2010: €1,427 million), including €746 million related to tax loss carry forwards (December
31, 2010: 805 million) and €875 million on temporary differences (December 31, 2010: €622
million).
IAS 36 Provisions, contingent assets and contingent liabilities
In the normal course of its operations in some twenty different countries, the Group is involved
in tax, employee-related and commercial disputes and legal proceedings. At December 31, 2011,
the claims and legal proceedings in which the Group was involved were covered by provisions
totalling €2,356 million.
IFRS 2-Share-based payments
The total cost recorded in the income statement in 2011 in respect of share-based payments
amounted to €29 million (2010: €54 million), of which €24 million reported under “Employee
benefits expense” in recurring operating income and €5 million reported under “Net income from
discontinued operations.
26
ANNEXES
27
LIST OF REFERENCES
Abby Trexler, (2012), How Simplicity Sparks Profits, Loyalty and Innovation,(online) Available
from: www.siegelgale.com, (accessed on Nov. 3, 2012)
Adam P. Vrechopoulos, (2010),"Who controls store atmosphere customization in electronic
retailing?”, (online) International Journal of Retail & Distribution Management, Vol. 38 Iss: 7
pp. 518 – 537 Available from: http://dx.doi.org/10.1108/09590551011052115
(Accessed 01-11-2012)
Andrew G. Parsons, (2011) Atmosphere in fashion stores: do you need to change?(online)
Journal of Fashion Marketing and Management Volume: 15 Issue: 4 201. Available from:
10.1108/13612021111169933
(Accessed 01-11-2012)
Adrian Buckley, Stephen Ross, Randelph W. Westerfield and Jeffrey F Jaffe, (1998) Corporate
Finance Europe, Mc Graw Hill Publishing Company
Carrefour, (2009-2011) Annual financial statements. Available from:
http://www.carrefour.com/cdc/finance/publications-and-presentations/annual-reports (accessed
3Oth Oct, 2012)
Carrefour, (2007-2012), Market outlook chart. Available from:
http://www.reuters.com/finance/stocks/chart?symbol=CARR.PA, (accessed 12th Nov, 2012).
Carrefour share price data. Available from: http://uk.finance.yahoo.com/q/hp?s=CA.PA
Charles W. Hill and Gareth R Jones, (2008), Strategic Management: An Integrated Approach,
Cengage Learning Inc.
Comparative financial statements for Carrefour, Sainsbury, Tesco and BP (2009-2011). Available from:
http://markets.ft.com/research/Markets/Tearsheets/Financials?s=CA:PAR&subview=BalanceShe
et (accessed 30th Oct, 2012)
David Ahlstorn and Garry D Bruton, (2009), International Management: Strategy and Culture in
Emerging Markets, South Western Cengage Learning
David Alexander, Anne Britton, and Ann Jorissen, (2007) International Financial Reporting and
Analysis 3rd Edition, Cengage Learning, High Holborn House.
David Campbell, George Stonehouse and Bill Houston (1999), Business Strategy an
Introduction, Butterworth Heinemann Linacre House Jordan Hill
28
David Service (2002) Retail Investment Risk Descriptions–Dangerous and misleading (online)
Australian National University Available from
http://cbe.anu.edu.au/media/10121/ACST0003WP.pdf (accessed on Nov. 1, 2012)
Doron Nissim and Stephen H. Penman, (2003), Financial Statement Analysis of Leverage and
How It Informs About Profitability and Price-to-Book Ratios, Review of Accounting Studies, 8,
531–560, 2003 Kluwer Academic Publishers.
European Economic and Financial Affairs 2012 European Economic Forecast, (online) ISBN 97892-79-22855-1 doi: 10.2765/19623. Available from: http://europa.eu. (Accessed, Nov, 4, 2012)
Fabiano Schivardi, Eliana Viviano, (2011), The costs of entry restrictions in retail trade (online)
Available from: www.Voxeu.org (accessed: 30 April 2011)
Fred. R. David, (2001), Strategic Management Concept and Cases Twelfth Edition, Pearson
Practice Hall.
Gianpaolo Iazzolino, Domenico Laise, Laura Marraro, (2012),"Business multicriteria
performance analysis: a tutorial", Benchmarking: An International Journal, Vol. 19 Iss: 3 pp. 395
– 411. Available from: http://dx.doi.org/10.1108/14635771211243012 (Accessed: 01-11-2012)
Hugh Carnegy, (2012), IMF Warns France to reform or Fall Behind, Financial Times magazine
Tuesday Nov. 6 2012 No 38 ,077
Hyunjae Kim, (2010) Examination of Real Estate Market Risk and Volatility Massachussets
Institute of Technology U S A 707932517
Jason Sit, Bill Merrilees, Dawn Birch, (2003),"Entertainment-seeking shopping centre patrons:
the missing segments", (online) International Journal of Retail & Distribution Management, Vol.
31 Iss: 2 pp. 80 – 94. Available from: http://dx.doi.org/10.1108/09590550310461985
(Accessed: 01-11-2012)
Mark T. Soliman The Use of DuPont Analysis by Market Participants, The Accounting
Review Vol. 83, No. 3 2008 pp. 823–853
Market Watch, (2012), Management Carrefour sales buoyed by Latin America (online).
Available from: http://www.marketwatch.com (accessed -2012-10-11)
Martin Fridson and Fernando Alvarez (2011), Financial Statement Analysis, Fourth Edition,
John Wiley & Sons, Inc.
Michael D Hartline and O. C. Ferrel, (2011), Marketing Strategy, Fifth Edition, South Western
Cengage Learning
29
Millind T. Phadtare, (2011), Strategic Management Concept and Practice, PHI Learning Private
Limited New Delhi
Philip R. Walsh, (2005), "Dealing with the uncertainties of environmental change by adding
scenario planning to the strategy reformulation equation". (online) Management Decision, Vol.
43 Iss: 1 pp. 113 – 122. Available from: http://dx.doi.org/10.1108/00251740510572524
(Accessed 01-11-2012)
Price Waterhouse Copper, (2012), outlook for the retail and consumer product sector in Asia
(online). Available from: www.pwc.com (accessed Nov. 2, 2012)
REAP (2012), Retail Environmental Sustainability Code, Available from
http://www.eurocommerce.be/content.aspx?PageId=41456 . Accessed 10th Nov: 2012
Richard A. Brealey, and Stewart C Myers (1991), Principles of Corporate Finance, Mc Graw
Hill Inc
Ricky W. Griffin (2011), Fundamentals of Management, 6th Edition, South Western Cengage
Learning.
Schermerhorn, (2010), Exploring Management, 2nd Edition, Wiley & Sons Inc.
Tony Kent, (2003),"2D23D: Management and design perspectives on retail branding", (online)
International Journal of Retail & Distribution Management, Vol. 31 Iss: 3 pp. 131 - 142
Available from
30
APPENDIX 1: PROFITABILITY RATIOS; CARREFOUR, TESCO & SAINSBURY
PROFITABILITY RATIOS
CARREFOUR PLC
2011
ROE
Net Profit
5.61%
2010
4.52%
TESCO PLC
2009
2012
2.74%
371
433
276
6,617
9,584
10,073
Total equity
ROCE
Capital Employed
Operating Profit
Gross Profit Margin
Sales Revenue
-2.20%
6.77%
6.80%
21,834
481
25,169
24,369
1,703
1,656
21.57%
21.84%
22.05%
82,764
81,840
86,754
17,852
17,871
19,128
Gross Profit
Operating Profit
Margin
Sales Revenue
Operating Profit
EBITDA to Capital
Employed
EBITDA
-0.58%
82,764
481
5.40%
1,180
2.08%
81,840
1.91%
1,656
13.23%
14.31%
25,169
2010
15.79%
16.06%
15.94%
2,806
2,655
17,775
2012
2011
2010
10.6%
11.8%
11.7%
2,327
598
640
585
16,535
14,596
5,629
5,424
4,966
12.64%
13.29%
11.52%
9.50%
10.1%
8.81%
31,532
29,475
30,008
9,204
8,457
8,062
3,985
3,917
3,457
874
851
710
8.15%
8.48%
8.10%
5.43%
5.50%
5.42%
64,539
60,455
56,910
22,294
21,102
19,964
5,261
5,125
4,607
1,211
1,160
1,08
2
6.17%
6.48%
6.07%
3.92%
4.03%
3.56%
64,539
60,455
56,910
22,294
21,102
19,964
3,985
3,917
3,457
874
851
710
13.13%
15.71
%
16.70
%
10.41
%
15.24
%
15.88
%
4,140.3
4,631
5,011.
958
1289
1280
31,532
29,475
30,008
9,204
8,457
8,062
3,486.
Capital Employed
21,834
2011
86,754
1,703
3,330
SAINSBERRY PLC
24,369
31
APPENDIX 2: EFFICIENCY RATIOS; CARREFOUR, TESCO & SAINSBURY
EFFICIENCY RATIOS
CARREFOUR PLC
2011
Average Inventory Turnover
Period (day)
Inventory (average
inventory not available)
Cost of Sales
Average settlement period
for trade receivables(days)
Debtors (Average Debtors
not available)days
Sales
Average settlement period
for trade payables(day)
Creditors (Average creditors
not available)
Cost of Sales (credit
purchase not available)
2010
2009
2012
39.91
35.66
6,848
6,994
6,607
64,912
63,969
67,626
32.49
27.97
38.51
32.01
Capital employed
2011
SAINSBERRY PLC
2010
2012
2011
2010
22.15 20.86
19.04 16.24 14.86
13.57
3598
3162
2729
938
812
702
59,278
55,330
52,303
21,083
19,942
18,882
27.33
29.35
25.42
3.68
4.86
3.14
7,259
7,285
6,647 4,832 4,861
3,963
225
281
172
82,764
81,840
86,754
64,539
60,455
56,910
22,294
21,102
19,964
95.84
90.68
39.25
38.17
35.77
32.95
33.60
34.45
15,362
16,796
16,800
6,375 5,786
5,126 1,903 1,836
1,782
64,912
63,969
67,626
59,278
55,330
52,303
21,083
19,942
18,882
-15.86
-23.44
27.05
10.23
12.04
8.69
13.02
13.88
-17.73
3.79
3.25
3.56
2.05
2.05
1.90
2.42
2.50
2.48
82,764
81,840
86,754
64,539
60,455
56,910
22,294
21,102
19,964
21,834
25,169
24,369
31,532
29,475
30,008
9,204
8,457
8,062
86.38
Cash Conversion cycle(day)
Sales revenue to capital
employed
Sales
TESCO PLC
32
APPENDIX 3: LIQUIDITY RATIOS; CARREFOUR, TESCO & SAINSBURY
LIQUIDITY RATIO
CARREFOUR PLC
2011
2010
2009
Current Ratio
Current Assets
0.74
0.71
0.71
SAINSBERRY PLC
2012 2011 2010
0.64
0.65
0.71
0.65
0.58
0.66
19,254
20,210
19,290
12353
11608
11392
2,032
1,721
1,853
26,097
28,481
27,184
19,249
17,731
16,015
3,136
2,942
2,793
0.45
0.48
0.54
0.35
0.31
0.41
8,755
19,24
9
8,446
17,73
1
8,663
16,01
5
1,094
909
2,94
2
1,151
Current Liabilities
Acid Test Ratio
Current Assets –
Stock
Current Liabilities
TESCO PLC
2012
2011
2010
0.48
0.46
0.47
12,406
13,216
12,683
26,097
28,481
27,184
33
3,13
6
2,79
3
APPENDIX 4: FINANCIAL LEVERAGE; CARREFOUR, TESCO & SAINSBURY
FINANCIAL LEVERAGE
CARREFOUR PLC
2011
Gearing
Long Term Liabilities
0.70
2010
0.62
TESCO PLC
2009
0.59
Equity (Share capital +
Reserves)
Debt to Equity (with prior
charge capital)
Prior Charge Capital
Equity (Share capital +
Reserves)
Interest cover
Profit before Interest and
Tax
Interest Payable
2011
2010
2012
201
1
201
0
0.44
0.44
0.51
0.39
0.36
0.38
15,217
15,585
14,296
13,757
12,940
15,412
3,575
3,033
3,096
21,834
25,169
24,369
31,532
29,475
30,008
9,204
8,457
8,062
0.77
0.78
1.06
0.64
0.56
0.62
Capital Employed
Debt to Equity
Long term liabilities
2012
SAINSBERRY PLC
2.30
1.63
1.42
15,217
15,585
14,296
13,757
12,940
15,412
3,575
3,033
3,096
6,617
9,584
10,073
17,775
16,535
14,596
5,629
5,424
4,966
0.77
0.78
1.06
0.64
0.56
0.62
2.30
1.63
1.42
15,217
15,585
14,296
13,757
12,940
15,412
3,575
3,033
3,096
6,617
9,584
10,073
17,775
16,535
14,596
5,629
5,424
4,966
10.78 10.34
8.34 15.24
7.04
5.26
-0.50
2.23
2.26
481.00
1,836.0
1,705.0
3591
2970
1280
810
505
954.00
823.00
754.00
333.0 314.0 356.1
-84
115
96
34
3247
APPENDIX 5: INVESTORS RATIOS FOR CARREFOUR
CARREFOUR
Basic EPS
Price per share
PRICE EARNING RATIO
DIVIDENT PER SHARE
DIVIDENT COVER
2007
2008
2009
2010
2011
0.53
53.29
100.55
0.37
27.52
74.38
1.08
0.34
0.10
33.56
335.60
1.08
0.09
0.13
30.85
237.31
1.08
0.12
0.11
17.61
160.09
0.52
0.21
35
APPENDIX 6: : ADJUSTED COMMON SIZE BALANCE SHEETS; CARREFOUR, TESCO & SAINSBURY
CARREFOUR
TESCO
SAINSBURY
2009
2010
2011
2010
2011
2012
2010
2011
2012
Cash And Short
Term Investments
Total Receivables,
Net
Total Inventory
10.38
9.47
9.93
9.0
6.5
6.8
7.71
4.40
5.99
12.89
13.58
15.14
8.6
10.3
9.5
1.58
2.47
1.82
12.82
13.04
14.29
5.9
6.7
7.1
6.47
7.12
7.60
Total current
assets
Property, plant &
equipment, net
Goodwill, net
37.42
37.67
40.17
24.8
24.6
24.3
17.07
15.10
16.47
29.15
28.51
28.73
56.4
55.6
54.5
75.57
77.06
75.60
22.25
22.05
18.23
7.3
7.0
6.8
0.92
0.88
0.81
Total assets
100
100
100
100
100
100
100
100
100
LIABILITIES
0.00
0.00
0.00
0.0
0.0
0.0
0.00
0.00
0.00
Accounts payable
32.59
31.31
32.05
11.1
12.3
12.6
16.42
16.11
15.42
Total current
liabilities
Total long term
debt
Total debt
52.73
53.09
54.45
34.8
37.6
37.9
25.73
25.81
25.41
19.00
19.32
19.87
25.5
20.5
19.5
21.71
20.52
21.21
23.18
24.38
24.35
28.8
23.5
23.1
22.39
21.17
22.42
Total liabilities
80.46
82.14
86.19
68.3
65.0
65.0
54.25
52.42
54.38
SHAREHOLDERS
EQUITY
Common stock
0.00
0.00
0.00
0.0
0.0
0.0
0.00
0.00
0.00
3.42
3.16
3.54
0.9
0.9
0.8
4.90
4.69
4.36
#VALUE! #VALUE! #VALUE!
10.5
10.4
9.8
9.52
9.19
8.60
ASSETS
Additional paid-in
capital
Retained earnings
(accumulated
deficit)
Total equity
Total liabilities &
shareholders'
equity
16.12
14.70
10.26
19.7
23.7
24.0
31.54
33.90
32.84
19.54
17.86
13.81
31.7
35.0
35.0
45.75
47.58
45.62
100.00
100.00
100.00 100.0 100.0 100.0 100.00 100.00 100.00
36
APPENDIX 7 ADJUSTED COMMON SIZE INCOME STATEMENTS; CARREFOUR, TESCO & SAINSBURY
CARREFOUR
Fiscal Year Ending
Dec 31 2011
Total revenue
2011
2010
2012
2010
2011
2012
100.0 100.0
100.0
100.0 100.0 100.0
100.0
100.0
100.0
Cost of revenue
total
Gross profit
77.95 78.16
78.43
91.90 91.52 91.85
94.58
94.50
94.57
22.05 21.84
21.57
8.10
8.48
8.15
5.42
5.50
5.43
Selling, general
and admin.
expenses, total
Total operating
expense
Operating income
16.78 16.49
16.88
2.68
2.71
2.56
2.00
1.98
1.88
93.93 93.52 93.83
96.44
95.97
96.08
Inc.avail. to
common excl.
extra. Items
Inc.avail. to
common incl.
extra. Items
98.09 97.92 100.58
2011
CARREFOUR
2010
Net income
before taxes
Provision for
income taxes
Net income after
taxes
Net income
before extra.
Items
Total
extraordinary
items
Net income
2009
TESCO
1.91
2.08
-0.58
6.07
6.48
6.17
3.56
4.03
3.92
1.21
1.29
-1.50
5.58
6.02
5.94
3.67
3.92
3.58
0.73
0.75
1.21
1.48
1.43
1.36
0.74
0.89
0.90
0.48
0.54
-2.71
4.10
4.59
4.58
2.93
3.03
2.68
0.40
0.42
-2.67
4.09
4.57
4.57
2.93
3.03
2.68
-0.08
0.11
3.12 #VALUE!
-0.18
0.32
0.53
0.45
4.09
4.39
4.35
2.93
3.03
2.68
0.40
0.42
-2.67
4.09
4.57
4.57
2.93
3.03
2.68
0.32
0.53
0.45
4.09
4.39
4.35
2.93
3.03
2.68
37
-0.22 #VALUE! #VALUE! #VALUE!
APPENDIX 8: ADJUSTED BALANCE SHEETS; CARREFOUR, TESCO & SAINSBURY
CARREFOUR
2009
TESCO
2010
2011
2010
In millions of Euro
2011
SAINSBURY
2012
In millions of pounds
2010
2011
2012
In millions of pounds
ASSETS
Cash And Short
Term Investments
Total Receivables,
Net
Total Inventory
5,351
5,082
4,760
4,133
3,046
3,455
837
501
739
6,647
7,285
7,259
3,963
4,861
4,832
172
281
225
6,607
6,994
6,848
2,729
3,162
3,598
702
812
938
Total current assets
19,290 20,210 19,254 11,392 11,608 12,353
1,853
1,721
2,032
Property, plant &
equipment, net
Goodwill, net
15,030 15,297 13,770 25,934 26,261 27,701
8,203
8,784
9,329
100
100
100
Total assets
51,553 53,650 47,931 46,023 47,206 50,781 10,855 11,399 12,340
11,473 11,829
8,740
3,337
3,316
3,449
LIABILITIES
Accounts payable
16,800 16,796 15,362
6,375
1,782
1,836
1,903
Total current
liabilities
Total long term debt
27,184 28,481 26,097 16,015 17,731 19,249
2,793
2,942
3,136
9,911
2,357
2,339
2,617
Total debt
11,952 13,080 11,672 13,273 11,075 11,749
2,430
2,413
2,767
Total liabilities
41,480 44,066 41,314 31,427 30,671 33,006
5,889
5,975
6,711
SHAREHOLDERS
EQUITY
Common stock
9,794 10,365
1,762
1,698
--
5,126
9,523 11,744
1,698
--
5,786
9,689
399
402
402
532
535
538
4,814
4,909
4,980
1,033
1,048
1,061
Additional paid-in
capital
Retained earnings
(accumulated
deficit)
Total equity
--
Total liabilities &
shareholders' equity
51,553 53,650 47,931 46,023 47,206 50,781 10,855 11,399 12,340
8,311
7,886
4,919
9,088 11,211 12,204
3,424
3,864
4,053
10,073
9,584
6,617 14,596 16,535 17,775
4,966
5,424
5,629
http://www.ft.com/home/uk
38
APPENDIX 9: ADJUSTED INCOME STATEMENTS; CARREFOUR, TESCO & SAINSBURY
CARREFOUR
Fiscal Year Ending
Dec 31 2011
2009
2010
TESCO
2011
2009
In millions of Euro
2010
SAINSBURY
2011
2009
In millions of pounds
56910
60455
64539
2010
2011
In millions of pounds
Total revenue
86,754 81,840 82,764
19964
21102
22294
Cost of revenue
total
Gross profit
67,626 63,969 64,912 52,303 55,330 59,278 18,882 19,942 21,083
19,128 17,871 17,852
4,607
5,125
5,261
1,082
1,160
1,211
Selling, general and
admin. expenses,
total
Total operating
expense
Operating income
14,559 13,494 13,969
1,527
1,640
1,652
399
417
419
85,098 80,137 83,245 53,453 56,538 60,554 19,254 20,251 21,420
1,656
1,703
-481
3,457
3,917
3,985
710
851
874
Net income before
taxes
Provision for income
taxes
Net income after
taxes
Net income before
extra. Items
Total extraordinary
items
Net income
1,050
1,055
-1,238
3,176
3,641
3,835
733
827
799
635
610
1,002
840
864
879
148
187
201
415
445
-2,240
2,336
2,777
2,956
585
640
598
343
344
-2,209
2,327
2,761
2,948
585
640
598
-67
89
276
433
371
2,327
2,655
2,806
585
640
598
Inc.avail. to
common excl. extra.
Items
Inc.avail. to
common incl. extra.
Items
343
344
-2,209
2,327
2,761
2,948
585
640
598
276
433
371
2,327
2,655
2,806
585
640
598
2,580 --
http://www.ft.com/home/uk
39
-106
-142 --
--
--
APPENDIX 10: COMMON SIZE WORKING CAPITAL STATEMENTS BP AND CARREFOUR
BP
CARREFOUR
Fiscal Year Ending Dec 31 2011
2011
2010
2009
2011
2010
2009
Total Receivables, Net
14.93
13.68
12.60
15.14
13.58
12.89
8.76
9.63
9.58
14.29
13.04
12.82
Total current assets
33.30
34.60
28.67
40.17
37.67
37.42
Accounts payable
11.02
10.87
10.12
32.05
31.31
32.59
Total current liabilities
28.77
30.81
25.14
54.45
53.09
52.73
4.53
3.80
3.53
-14.28
-15.42
-15.31
Total Inventory
working capital
40
APPENDIX 11: OPERATING EFFICIENCY
BP
Average Inventory Turnover (days)
Inventory (average not available)
Cost of Sales
Average settlement period for trade
receivables(days)
Debtors (Average not available)
Sales
Average settlement period for trade
payables(days)
Creditors (Average not available)
Cost of Sales (credit purchase not available)
Cash Conversion cycle(days)
CARREFOUR
2011
2010
2009
2011
2010
2009
30.24
34.08
44.13
38.51
39.91
35.66
25,661
309,763
26,218
280,826
22,605
186,974
6,848
64,912
6,994
63,969
6,607
67,626
41.33
44.00
44.10
32.01
32.49
27.97
43,761
37,242
29,740
7,259
7,285
6,647
386,463
308,928
246,138
82,764
81,840
86,754
38.04
38.45
46.62
86.38
95.84
90.68
32,284
309,763
29,583
280,826
23,882
186,974
15,362
64,912
16,796
63,969
16,800
67,626
33.53
39.63
41.61
-15.86
-23.44
-27.05
41
APPENDIX 12: ADJUSTED BP BALANCE SHEET
BP
Fiscal Year Ending Dec 31 2011
2011
2010
2009
Cash And Short Term Investments
14,599
20,335
8,588
Total Receivables, Net
43,761
37,242
29,740
Total Inventory
25,661
26,218
22,605
1,286
1,574
1,753
97,584
94,212
67,653
6,293
5,642
5,372
293,068
272,262
235,968
Accounts payable
32,284
29,583
23,882
Other current liabilities, total
37,058
34,058
20,127
Total current liabilities
84,318
83,879
59,320
Total long term debt
35,169
30,710
25,518
Total debt
44,213
45,336
34,627
181,603
177,275
134,355
5,203
5,162
5,158
Retained earnings (accumulated deficit)
110,147
92,970
99,883
Total equity
111,465
94,987
101,613
Total liabilities & shareholders' equity
293,068
272,262
235,968
ASSETS
Prepaid expenses
Total current assets
Other long term assets
Total assets
LIABILITIES
Total liabilities
SHAREHOLDERS EQUITY
Common stock
http://www.ft.com/home/uk
42
APPENDIX 13 CARREFOUR SHARE PRICES
CARREFOUR SHARE PRICE HISTORY
Date
Open
High
01-Nov-12
01-Oct-12
03-Sep-12
01-Aug-12
04-Jul-12
02-Jul-12
01-Jun-12
01-Dec-11
01-Aug-11
05-Jul-11
01-Jul-11
30-Jun-11
01-Jun-11
01-Dec-10
01-Nov-10
01-Jun-10
07-May-10
03-May-10
01-Oct-09
04-May-09
04-May-09
01-Apr-09
01-Oct-08
02-Jun-08
02-May-08
18-Apr-08
01-Apr-08
03-Dec-07
01-Nov-07
01-Jun-07
31-May-07
18.7
16.03
16.64
14.51
19.09
18.94
17.46
17.67
14.67
13.77
19.66
20.89
15.01
14.83
20.5
20.98
28.32
28.5
30.78
32.24
39.01
33.31
30.86
33.83
39.24
35.75
36.7
30.69
30.42
37.24
31.92
32.88
29.24
33.15
44.85
45.76
31.24
33.94
46.29
46.97
48.86
52.59
49.97
54.12
54.63
50.59
54.2
53.76
55.6
54.95
Low
close
Avg Vol
Adj Close*
17.58
18.85
15.68
18.64
16.06
16.14
14.19
16.67
0.52 Dividend
12.87
14.59
13.43
14.55
15.82
17.61
16.67
18.56
1.08 Dividend
20.27
20.6
1.08 Dividend
25.95
28.32
30.85
30.85
34.85
34.85
32.55
32.74
1.08 Dividend
32.06
33.71
29.27
29.27
28.51
31.58
1.08 Dividend
27.84
30.89
24.16
32.92
34.25
35.96
43.87
45.07
1.08 Dividend
44.15
45.23
50.9
53.29
47.17
52.91
50.9
52.14
53.75
54.16
2,792,000
3,808,100
2,935,700
3,249,100
18.85
18.64
16.14
16.67
4,391,600
4,126,700
3,295,600
5,899,000
14.59
14.04
17
17.91
8,105,300
19.88
4,779,600
3,460,100
2,214,000
3,067,900
26.27
27.52
31.09
29.2
4,213,300
3,396,500
2,571,800
30.07
25.32
27.32
3,414,100
7,448,100
5,179,700
2,760,200
25.78
27.48
30.02
37.62
3,640,800
2,554,200
3,940,000
3,947,200
7,451,200
37.75
43.44
43.13
42.5
44.15
SOURCE: http://uk.finance.yahoo.com
43