Morrisons PLC
The UK food retailing sector is in huge flux. The established large players of Sainsburys, Tesco’s, ASDA and Morrison’s are struggling against the new entrants like Aldi and Lidl.
What is interesting is to see to understand the finances of the established players.
Morrisons PLC has grown from a northern regional supermarket to a large UK player after the acquisition of Safeway.
A share price under pressure and a dividend that can not be maintained due to the stiff competition.
However when one looks at the balance sheet, one can some really powerful facts:
http://www.morrisons-corporate.com/Documents/Corporate2015/2015InterimsRNSFinalV.pdf
Liabilities
Current liabilities = £2,316m
Creditors = £1m
Short Term Borrowings £16m
Current tax liabilities £42m
Total = 2,375m = £2.375 billion
So it carries no long term debt. Such as bonds. The only money it owes are effectively its suppliers which means it has to pay them in 90 days, and perhaps short term overdraft facilities. It does not have the onerous payments to make to bond holders.
So while the cash tills keep ringing, cash flow is available to meet payment obligations. Also Morrisons PLC owns all its own land.