Financial Performance Evaluation of Tesco.
Oxford Brookes University
RESEARCH AND ANALYSIS REPORT
TOPIC 8
AN ANALYSIS OF THE BUSINESS AND FINANCIAL PERFORMANCE OF
TESCO PLC
[pic]
(6444 words)
MARCH 2008
1. INTRODUCTION
1.1 TOPIC CHOSEN
This research analyses the financial situation of Tesco Plc; topic number 8. The analysis is carried from an investor’s point of view and will be achieved by evaluating key financial ratios, past trends and other key aspects with an aim to serve the current and prospective future investors in making investment decision. As the financial aspect is just a quantitative measure and cannot always give the true picture, so it is important to look at the qualitative aspect as well. Thus, this research will also look at the qualitative side of the story.
In this report, the financial situation of Tesco Plc has been compared with one of its close competitor J Sainsbury Plc and looks at the last 3 years of both the companies.
1.2 REASON FOR CHOOSING THE TOPIC
Tesco is currently market leader in the field of supermarket retail industry with group profit of £2803 million for the year ending 2008 and with maximum market share of around 31% in UK, so it was a natural choice for me to choose Tesco and this topic as I had always had an interest in retail sector and a keen interest on this business and wish to develop my career in this field.
And also to add to the fact that, as an ACCA student, analysing the business and financial performance of a company will provide me with the opportunity to enhance my ability and increase my knowledge in accounting and financial field and the situation and strategy a company needs to adopt to be successful. J Sainsbury Plc was chosen as Tesco’s comparator because of the fact that it has always traditionally been the Tesco’s competitor and is also the third largest retail store in UK with market share of 16%.
Tesco is not just a food retail store anymore and truly defines the meaning of shopping under one roof, offering
RESEARCH AND ANALYSIS REPORT
TOPIC 8
AN ANALYSIS OF THE BUSINESS AND FINANCIAL PERFORMANCE OF
TESCO PLC
[pic]
(6444 words)
MARCH 2008
1. INTRODUCTION
1.1 TOPIC CHOSEN
This research analyses the financial situation of Tesco Plc; topic number 8. The analysis is carried from an investor’s point of view and will be achieved by evaluating key financial ratios, past trends and other key aspects with an aim to serve the current and prospective future investors in making investment decision. As the financial aspect is just a quantitative measure and cannot always give the true picture, so it is important to look at the qualitative aspect as well. Thus, this research will also look at the qualitative side of the story.
In this report, the financial situation of Tesco Plc has been compared with one of its close competitor J Sainsbury Plc and looks at the last 3 years of both the companies.
1.2 REASON FOR CHOOSING THE TOPIC
Tesco is currently market leader in the field of supermarket retail industry with group profit of £2803 million for the year ending 2008 and with maximum market share of around 31% in UK, so it was a natural choice for me to choose Tesco and this topic as I had always had an interest in retail sector and a keen interest on this business and wish to develop my career in this field.
And also to add to the fact that, as an ACCA student, analysing the business and financial performance of a company will provide me with the opportunity to enhance my ability and increase my knowledge in accounting and financial field and the situation and strategy a company needs to adopt to be successful. J Sainsbury Plc was chosen as Tesco’s comparator because of the fact that it has always traditionally been the Tesco’s competitor and is also the third largest retail store in UK with market share of 16%.
Tesco is not just a food retail store anymore and truly defines the meaning of shopping under one roof, offering