Critical assessment of annual report of Wm Morrison Supermarkets Plc

Topics: Corporate governance, Management, Board of directors Pages: 6 (1867 words) Published: March 9, 2014


Critical assessment of annual report of Wm Morrison Supermarkets Plc

Word count: 1711 words

Table of Contents

Introduction3
1.0 Overview of the Annual Report of Morrisons4
2.0 Performance and Strategy Review4
3.0 Governance7
4.0 Reliability of the Annual Report of Morrison8
5.0 Conclusion8
References:9

Introduction
An annual report is a portrait of the business of a firm. In fact, it is the most important way for a company to disclose information to the public (Dainelli et al., 2013). Such information includes both financial and non-financial information, which might be quite useful for investors and potential investors of the company to make their decisions. Wm Morrison Supermarkets Plc (abbreviated as “Morrisons” below) is “the UK’s fourth largest food retailer by sale” (Morrisons, 2013). This report will use Morrisons as an example to make a critical evaluation of corporate annual report. There will be mainly four parts in this report. First of all, an overview of the annual report of Morrisons will be provided. On this basis, the second part will critically assess the section of “Performance and Strategy Review” of the annual report of Morrisons. The third part asses the section of “Governance”. Then, the fourth part will evaluate the reliability of the annual report of Morrisons. Finally, a conclusion will be given.

1.0 Overview of the Annual Report of Morrisons
The annual report 2013 of Morrisons includes 116 pages and comprises of mainly three parts, 1) performance and strategy review, 2) governance, and 3) financial statements. The first and second parts are mainly qualitative information while the third part is mainly quantitative information about the financial accounts of the company. This report focuses on the qualitative information of this annual report.

2.0 Performance and Strategy Review
This part is intended to provide investors with useful information about the business strategy and current performance of Morrisons. Based on such information, investors can make estimation about the future prospects of the company.

In this section of the annual report of Morrisons, detailed information about the strategy and performance of the company is provided. Investors and potential investors can get the following useful information. From the business model of Morrisons stated in Page 2, it can be seen what is the core business of Morrisons and where they do the business. Then from page 3 to page 5, it tells how Morrisons do differently from its competitors and how it competes in the market place. Also, the current position of Morrisons in the market place is analyzed. The annual report further discloses the new channels of Morrisons to the market. From such information, investors can judge whether this business model will be effective in helping Morrisons gain competitive advantage and obtain sustainable growth in the future. The limitation with the information in this aspect is that it mainly focuses on the favorable things for the company. It identifies the strengths and advantages of Morrisons over its competitors but mentions little about its weaknesses and disadvantages. This may lead to the overconfidence of investors about the future prospects of Morrison.

Following the business model and marketplace information, chairman’s review and chief executive’s review are available in the annual report. These are the reviews about historical, current and future operations of the company by the board chairman and chief executive officer. They analyze the business environment, the performance and position, threatens & opportunities, and the strengths & weaknesses of the company, which represent the opinions of the director board and management board of Morrisons. From their reviews, investors can see how senior management of the company considers the future prospect of the company. The confidence director board and...

References: Abraham, S. and Shrives, P. J. (2014) Improving the Relevance of Risk Factor Disclosure in Corporate Annual Reports, The British Accounting Review, In Press Corrected Proof, Available online 2 November 2013.
Alves, H., Rodrigues, A. M. and Canadas, N. (2012) Factors Influencing the Different Categories of Voluntary Disclosure in Annual Report, The British Accounting Review, vol.10, no.1, pp.15-26.
Ashcroft, P. (2012) Extent of Environment Disclosure by Annual Report, Advances in Accounting, vol.29, no.2, pp.279-292.
Dainelli, F., Bini, L. and Giunta, F. (2013) Signaling Strategies in Annual Reports: Evidence from the Disclosure of Performance Indicators, Advances in Accounting, vol.29, no.2, pp.267-277.
Lee, T. (1994) The Changing Form of the Corporate Annual Report, Accounting Historians Journal, vol.21, no.1, pp.215-232.
Morrisons, (2013) Annual Report 2013, Available from:
http://www.morrisons-corporate.com/investor-centre/Financial-reports/ [access date: January 28, 2014]
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