Research in accounting and fiannce - Essay Example

There is no massive fluctuation in the share prices, but in the year 2009 it was least among the five years which shows little financial decline in the company’s performance. In the year 2012 the stock prices were highest among the five years which showed an increase in the financial performance of the company. There are many internal and external factors that affect the performance of an organization in both positive and negative way. The external forces that may affect the financial performance of Sainsbury are: Political force: The political forces residing in Europe and which may have an effect on the performance of Sainsbury are Euro Zone, European Union, rapidly globalizing businesses and many taxation rules policies.

Economic factor: These factors can be rapidly changing interest rates, exchange rates, GDP of a country and Per capita Income, inflation, Job market and unemployment rate and company’s market share which may affect a company’s performance. Technological forces: Technological forces have great influences on the performance of any organization. This includes invention of new and modern products, innovation in products and improvements, etc. When the financial crisis of 2009-2010 hit the industry, it had no such disastrous influence on the financial condition of Sainsbury.

In a report by Mr. Justin King it is said that the when the crisis hit the industry people changed their spending pattern but the sales of Sainsbury when revealed, it was observed that it was more than the forecasted sales (Hall, 2010). When the euro zone sovereign debt crisis hit London the share price of Sainsbury decreased along with many other companies. As reported on 21 may 2012, the stock price of many companies emerged from the crisis but Sainsbury and Tesco were still among the weakest performers (London midday: Stocks rise but Eurozone still in focus, 2012).

There are many resources and abilities within an organizations,