Analysis of Business and Financial Performance of an Organisation over a Three Year Period: Organisation is TESCO

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ACKNOWLEDGEMENT

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DECLARATION

I, (Your name), would like to declare that all contents included in this thesis/dissertation stand for my individual work without any aid, & this thesis/dissertation has not been submitted for any examination at academic as well as professional level previously. It is also representing my very own views & not essentially which are associated with university.

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ABSTRACT

In this research, we have analyzed the business and financial performance of TESCO Plc over the period of three Years. For the purpose of analysis, we had calculated different financial ratios of Tesco, and compared the financial performance of TESCO with Morrisons, which is a competitor of TESCO in the UK retail market. In our analysis, we have seen that the financial performance of TESCO has been very good over the past few years and the ratios of Tesco plc shows satisfactory performance. Tesco has expanded their operations through the help of debt financing and they had not allowed this to make an impact on their financial figures, thats why we can conclude that business and financial performance is very good, and it has good impact on the organisation's funding strategies. Furthermore, their liquidity and profitability position was also very satisfactory. This shows the strength of the management of TESCO Plc as they had managed the expansion of the company in such a way that it had made no impact on the financial ratios and performance of the company and TESCO. The investor ratios of TESCO are not very good, so we would recommend that TESCO should work on improving their investor confidence.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

LIST OF TABLESVI

LIST OF FIGURESVII

CHAPTER 01: INTRODUCTION1

Background of the Research1

Selection of Topic1

Rational of the Chosen Topic1

Aims and Objectives of the Study2

CHAPTER 02: INFORMATION GATHERING4

Selection of Sources5

Selected Methodology6

Limitation of Methodology8

Analytical Techniques Used8

CHAPTER 3: ANALYISIS AND PRESENTATION10

Profitability Analysis of TESCO and Morisson11

Operating income margin11

Return on Equity12

Return on assets analysis13

Net profit margin14

Liquidity Analysis of TESCO and Morissons15

Current ratio analysis15

Quick ratio analysis16

cash ratio analysis17

Gearing Ratio Analysis of TESCO Plc and Morissons20

Total debt to assets analysis20

Debt to Equity analysis21

Interest coverage ratio analysis22

Long-term debt to Net Working capital ratio analysis24

Investor Ratio Analysis of TESCO and Morissons25

Earnings per share25

Price-Earnings Ratio26

Dividend Yield27

Conclusion29

Recommendations for TESCO Plc29

SKILL AND LEARNING STATEMENT30

REFERENCES39

APPENDICES44

Appendix A: financial statements of TESCO44

Appendix B: financial statements of Morrisons49

Appendix C: Spreadsheet used for calculations52

LIST OF TABLES

Table 1: Operating Income Margin comparisons11

Table 2: Return on equity comparison12

Table 3: Return on assets comparison13

Table 4: Net profit margin comparison14

Table 5: Current ratio comparison15

Table 6: Quick ratio comparison16

Table 7: cash ratio comparison18

Table 8: Debt to assets comparison20

Table 9: Debt to equity ratio21

Table 10: Interest coverage ratio comparison23

Table 11: Long-term Debt to Net Working Capital ratio comparison24

Table 12: EPS Comparison25

Table 13:P/E Ratio Comparison26

Table 14: Dividend Yield Comparison27

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