Valuation of Sainsbury and writing the report Research Paper

Valuation of Sainsbury and writing the report - Research Paper ExampleThe low valuation of the keep company exposes it to dangers of potential takeover target. To enhance the value of the company the board is thinking of measures to improve the company valuation. There is an add-ond perception that the company volition be able to benefit from geographical diversification and to improve its image in the market. The company management has come up with the idea of acquiring the UK establish J Sainsbury Plc in a bid to improve the valuation of the company. The companies listed on the London Stock convince exhibit high level of compliance to corporate governance and corporate social responsibility practices. The internal companies are mandated to adhere to the corporate codes and ethics. If a company fails to comply with any particular code so it has to explain the reason for the non-compliance. This ensures transparency in financial reporting and makes the financial reports of th e company more credible. The sellers in the European region get hold of a strong brand image and are highly antiphonal to the requirements of the customers. The major retail chains in UK like Tesco, Sainsbury are mature and are continually expanding internationally as well as in terms of wider range of products and serve. The retailers in the country are change in the true sense with some of them even engaged in financial services. Even Sainsbury is relate in banking services. The movement of the retail chain into financial services is a type of horizontal diversification (Welch & Worthington, 2008). Sainsbury is a UK based company with a diversified range of products and services. By the acquisition of Sainsbury, CF Inc will be able to make a foray in the European market. The primary activities of Sainsbury are convey in groceries and other related items. The company also has an alliance with the Lloyds Banking Group in financial services (Reuters-b, 2011). In the recent fi nancial crisis the retailers across the ball witnessed a fall in the net income owe to the reduced consumer spending. With the rebound in the economy the performance of the retail industry is expected to improve. The economies across the world are slowly on the way to recovery. With a rise in the level of economic natural action it is anticipated that there will also be arise in the disposable income of the consumers. This is likely to have a positive impact on the retail businesses as well. The consumer demand is expected to rise with the increase in the income level. It is expected that the consumers will increase their retail spending which will also boost the sugar of the retail businesses. Future of retail- Advancement in technology like internet facilities has made retailing an fire and challenging field. The recent fundamental changes have altered the ways and mechanism of retailing. Despite this retailing is inevitable in some form or the other. For instance though the manufacturers are now able to sell directly to the consumers through online system but still it is difficult for the consumers to make all the purchases online. The traditional retailers operating(a) through physical stores would still be necessary. This is because for some products the consumers are convinced only after a thorough examination of the product before purchasing it. In some cases the experience of going to the retail store is as important as making the purchase (Harris, 2000). Valuation of Sainsbury The fundamental analysis involves valuing a company based on important financial