Financial Analysis of Tesco
Managing Financial Principles
TESCO Ltd.
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Zahid Iqbal
ID: 8531
Abstract:
This paper highlights different financial aspects of TESCO Ltd. Company. It identifies different sources of finance for the company. An overview of different financial ratios which represent liquidity, profitability and performance of the company. Then an investment appraisal has been developed for TESCO for further growth, development and expansion of the business.
Table of Contents
Abstract: 2
Introduction: 4
Sources of Finance: 5
Internal Resources: 5 External Sources: 6 Recommendations: 8
INVESTMENT APPRAISAL: 10
Post Completion Review (PCR): 10 Methods of Investment Appraisal 11
Ratio Analysis: 13
Profitability Ratios: 13
Return on Assets: 15
Efficiency Ratios: 17 Liquidity Ratios: 20 Quick Ratio: 21 Stability Ratios: 22
References: 23
Introduction:
TESCO was founded by Mr. Jack Cohen in 1919, when he initiated to sell surplus groceries from a stall in the East End of London. It’s first own brand product was TESCO Tea and its first store was Burnt Oak, Edgware, North London. In 1932 TESCO stores became a private limited company. First modern food warehouse was introduced by TESCO in 1934.
In last ten years, the following are the major milestones of TESCO.
• Tesco.com was launched and in this was it became online.
• TESCO became leading organic retailer in the UK.
• TESCO launched ‘Customer Champions’ in its stores.
• It entered Malaysia, Japan, Turkey, China, United States, South Korea and India in different types of business opportunities and with different products according to the local requirements.
• It became first major British Super Market to enter music download market.
• It launched Tesco Homeplus.
The current strategy of TESCO is to diversify the business which was laid down in 1997 and it has proved the base of success for the business not
TESCO Ltd.
[pic]
[pic]
Zahid Iqbal
ID: 8531
Abstract:
This paper highlights different financial aspects of TESCO Ltd. Company. It identifies different sources of finance for the company. An overview of different financial ratios which represent liquidity, profitability and performance of the company. Then an investment appraisal has been developed for TESCO for further growth, development and expansion of the business.
Table of Contents
Abstract: 2
Introduction: 4
Sources of Finance: 5
Internal Resources: 5 External Sources: 6 Recommendations: 8
INVESTMENT APPRAISAL: 10
Post Completion Review (PCR): 10 Methods of Investment Appraisal 11
Ratio Analysis: 13
Profitability Ratios: 13
Return on Assets: 15
Efficiency Ratios: 17 Liquidity Ratios: 20 Quick Ratio: 21 Stability Ratios: 22
References: 23
Introduction:
TESCO was founded by Mr. Jack Cohen in 1919, when he initiated to sell surplus groceries from a stall in the East End of London. It’s first own brand product was TESCO Tea and its first store was Burnt Oak, Edgware, North London. In 1932 TESCO stores became a private limited company. First modern food warehouse was introduced by TESCO in 1934.
In last ten years, the following are the major milestones of TESCO.
• Tesco.com was launched and in this was it became online.
• TESCO became leading organic retailer in the UK.
• TESCO launched ‘Customer Champions’ in its stores.
• It entered Malaysia, Japan, Turkey, China, United States, South Korea and India in different types of business opportunities and with different products according to the local requirements.
• It became first major British Super Market to enter music download market.
• It launched Tesco Homeplus.
The current strategy of TESCO is to diversify the business which was laid down in 1997 and it has proved the base of success for the business not
References: Atrill and McLaney (1995). Accounting and finance, 1st ed, United Kingdom. Duncan, W (1996), Cost and Management Accounting, Prentice Hall Ennew and Waite (2007). Financial services Marketing: an international guide to principles and practice, Amsterdam ; Boston ; London :Butterworth-Heinemann. Hirst and Kerrison (2009), Corporate Finance 1, United Kingdom Lin et al. (2000), CIM Justification and optimization. London: Taylor & Fancis. pp.36. Ritter et al. The financial system and the economy: principles of money and banking, 5th ed, Addison-Wesley. Sayer, K (2007), Practical Guide to Financial Management, 3rd ed, Directory of Social Change, London.