Tesco Plc Financial Analysis
PART 1
TESCO PLC
Tesco was founded in 1919 by Jack Cohen, when he purchased the shipment of tea from T.E Stockwell and later in 1924 combined the initial of the names (TES) with the first two letters of his surname (CO). The first TESCO store was opened in Burnt Oak, Middlesex in 1929. Tesco is now operating in 14 different countries around the globe with almost 5000 stores worldwide and it is one of the largest retailers around the world. According to Kantar worldpanel, 2012 Tesco covers almost 30% of the market share in the UK.
The financial data of company does not tell us the entire position of an organisation and its performance over the year or certain period of time for comparative purposes. Therefore, the use of ratios to analyse the position and performance is better approach.
Advantages of Ratios Analysis:
• It helps to understamd FS: Ratios not only simplifies the financial statement these also help to compare the changes in financial area of the company. • It helps in budgeting: Ratios work as forecasting and budgeting tool for management by telling the current and previous year performance of the company. Informed decision making is possible through planning, control, co-ordination and communication. • Assist in comparasion: Ratios provide data for inter-company evaluation and it helps identify the factors linked between a successful and unsuccessful firms. • Helps making investment decision: Ratios by simplifying the financial information and by separating key areas information helps investors to make decision on their investment. • Ratios help providing reliable financial information. • It is tool to disclose the information the way the user wants. • It provides the information required to calculate the earnings of an organisation.
These help identifying other information like substitute market, company’s obligations and change in economic resources (Ratio Analysis Benefits, 2009)
TESCO PLC
Tesco was founded in 1919 by Jack Cohen, when he purchased the shipment of tea from T.E Stockwell and later in 1924 combined the initial of the names (TES) with the first two letters of his surname (CO). The first TESCO store was opened in Burnt Oak, Middlesex in 1929. Tesco is now operating in 14 different countries around the globe with almost 5000 stores worldwide and it is one of the largest retailers around the world. According to Kantar worldpanel, 2012 Tesco covers almost 30% of the market share in the UK.
The financial data of company does not tell us the entire position of an organisation and its performance over the year or certain period of time for comparative purposes. Therefore, the use of ratios to analyse the position and performance is better approach.
Advantages of Ratios Analysis:
• It helps to understamd FS: Ratios not only simplifies the financial statement these also help to compare the changes in financial area of the company. • It helps in budgeting: Ratios work as forecasting and budgeting tool for management by telling the current and previous year performance of the company. Informed decision making is possible through planning, control, co-ordination and communication. • Assist in comparasion: Ratios provide data for inter-company evaluation and it helps identify the factors linked between a successful and unsuccessful firms. • Helps making investment decision: Ratios by simplifying the financial information and by separating key areas information helps investors to make decision on their investment. • Ratios help providing reliable financial information. • It is tool to disclose the information the way the user wants. • It provides the information required to calculate the earnings of an organisation.
These help identifying other information like substitute market, company’s obligations and change in economic resources (Ratio Analysis Benefits, 2009)