Financial Management Time allowed Reading and planning: 15 minutes Writing: 3 hours ALL FOUR questions are compulsory and MUST be attempted. Do NOT open this paper until instructed by the supervisor. During reading and planning time only the question paper may be annotated. You must NOT write in your answer booklet until instructed by the supervisor. This question paper must not be removed from the examination hall. The Association of Chartered Certified Accountants Paper
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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
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56.6% | 45.7% | Asset Turnover | | 2.01 | 2.08 | | 3.64x | 3.12x | Cash Return on Capital Employed | | 66.7% | 41.8% | | 73.4% | 54.9% | GEARING | | 2010 | 2009 | | 2010 | 2009 | Interest Cover | | 27.77x | 1.28x | | 20.97x | 9.44x | Gearing Ratio D/E (Short term Borrowings) | | 35.0% | 45.4% | | 3.5% | 86.27% | Gearing Ratio D/E (Long term borrowings) | | - | - | | 390% | 403.80% | Cash Interest Cover | | 69.95x | 18.36x | | 21.42x | 11.49x | EFFICIENCY
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Findings………………………………………………………………………………..4 5.1. Profitability Ratios…………………………………………………………………………………….4 5.2. Efficiency Ratio………………………………………………………….................................5 5.3. Liquidity Ratio…………………………………………………………..………………………………5 5.4. Gearing Ratio…………………………………………………………………………………………….5 5.5. Investors Ratios…………………………………………………………………………………………5 5. Conclusion……………………………………………………………………………6 6. Recommendations……………………………………………………………….6 7. References…………………………………………………………………………
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company’s liquidity. Seeking a better image vis-à-vis its rival Compass‚ Sodexo has increased its dividends pay out on the account of its liquidity‚ thus‚ relying on borrowing rather than operating activities. This is explained by the high financial gearing ratio that has not been translated to an increase in the company’s profitability‚ a short sighted strategy that should be reconsidered by the board. Recommendations: 1. Focus on maximising profit from operations‚ 2. Revaluate the entire trade
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analyze the financial position of the company. The ratios that he has used are Return on Investment (ROI)‚ Return to shareholders‚ Return on Capital Employed (ROCE)‚ Earnings per share (EPS)‚ Price-Earnings Ratio (P/E)‚ Dividend yield‚ Dividend payout‚ Gearing ratio‚ Interest cover‚ Current ratio and Acid test ratio. The author was not able to use the gross profit ratio‚ net profit ratio and working capital turnover because since only JKH PLC is considered and not its subsidiaries‚ the total sales figure
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their ability to patent active ingredients as shown in the graph below.. (L’Oreal‚ 2014i) (L’Oreal-Finance‚ 2013a) (L’Oreal-Finance‚ 2013b) Strong and well define advertising strategy. = 3697 / (29531-6370) * 100% = 3875 / (31298-6595) * 100% Gearing 1.1% 1.6% = (47+201) / (29531-6370) * 100% = (94+293) / (29531-6370) * 100% (L’Oreal Finance‚ 2013d)
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The following report contains a financial analysis of Tesco PLC and its current trading position for the financial year ending February 2010. The data that has been analysed will be compared with the previous year’s finances. It will include information such as performance‚ the businesses liquidity‚ and Tesco’s efficiency. It will also show the extent to which Tesco may or may not appeal to potential investors after the past financial year. In the current economic situation facing the country
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The Cost of Capital 1 Background As investors desire to obtain the best/highest return on their investments in securities such as shares (Equity) and loans to companies such as debentures (Debt)‚ these returns are costs to the companies paying these Dividends (on equity) and Interest (on Debts)! It all depends on the perspective from which we chose to view the calculation (are we Earning or Paying?) Companies MUST consider the cost of financing they receive in the form of equity or debt if they
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Turnover 2.3 Total Asset Turnover 3. “Short-term Liquidity 3.1 Current Ratio 3.2 Acid Test Ratio 4. WORKING CAPITAL RATIOS 4.1 Inventory Days 4.2 Trade Receivables Days 4.3 Trade Payables Days 5. LONG TERM SOLVENCY 5.1 Interest Cover 5.2 Gearing 6. Investor ratios 6.1 Dividend Cover Ratio 6.2 Dividend Pay-out Ratio 6.3 Dividend Yield 6.4 Earnings Per Share Ratio 6.5 P/E Ratio” Chairman’s statement Review Share price movement over the two years period Review Annexure
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