Business and financial performance of an organisation over a three-year period -- Organisation is Tesco

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ACKNOWLEDGEMENT

No words can express my appreciation and gratitude to my research advisor _______ through the course of this research, Professor _____has taught me numerous values that extend well beyond the realm of _________ (Your Subject Name). His emphasis on dedication to work and his valuable and practical insights of life are some of the major highlights of my education at The University _________. To Professor _____, I say with great respect, thank you very much.

DECLARATION

I [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for the academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

ABSTRACT

In this research, we have analyzed the three-year business and financial performance of TESCO Plc. For the purpose of analysis, we had 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. They have expanded their operations through the help of debt financing and they had not allowed this to make an impact on their financial figures. Furthermore, their liquidity and profitability position was also very good.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

1.1 Introduction1

1.2 Topic chosen1

1.3 Reason for choosing the topic1

1.4 Aims and objectives of the research2

1.5 Research questions3

CHAPTER 2: INFORMATION GATHERING5

2.1 Sources used and reasons5

2.2 Methods used to collect information6

2.3 Limitation of information8

2.4 Accounting and business techniques used9

CHAPTER 3: ANALYISIS AND PRESENTATION10

3.1 Profitability comparison of TESCO and Morisson10

3.1.1 Operating income margin10

3.1.2 Return on equity11

3.1.3 Return on assets analysis13

3.1.4 Net profit margin14

3.2 Liquidity comparison of TESCO and Morissons14

3.2.1 Current ratio analysis14

3.2.2 Quick ratio analysis16

3.2.3 Cash ratio analysis18

3.3 Gearing ratio comparison of TESCO Plc and Morissons19

3.3.1 Total debt to assets analysis19

3.3.2 Debt to equity analysis20

3.3.3 Interest coverage ratio analysis22

3.3.4 Long-term debt to Net working capital ratio analysis23

3.4 Investor ratio comparison of TESCO and Morissons25

3.4.1 Earnings per share25

3.4.2 Price-Earnings Ratio26

3.4.3 Dividend Yield27

3.5 Discussion of results28

3.6 SWOT analysis of TESCO Plc29

3.6.1 Strengths of TESCO29

3.6.2 Weaknesses of TESCO29

3.6.3 Opportunities available for TESCO29

3.6.4 Threats for TESCO30

3.7 Porter five forces model analysis30

3.7.1 The threat of buyer power for TESCO30

3.7.2 The threat of supplier power for TESCO31

3.7.3 The threat of new entrants in the retail industry for TESCO31

3.7.4 The threat of substitutes for TESCO32

3.8 Recommendations for TESCO Plc33

3.9 Conclusion33

REFERENCES35

APPENDICES40

Appendix A: TESCO financial statements40

Appendix B: Morrisons financial statements48

Appendix C: Spreadsheet used for calculations56

CHAPTER 1: INTRODUCTION

1.1 Introduction

Tesco Plc is amongst the biggest grocery and food retailers in the United Kingdom. TESCO has its operations in Asia, US and Europe, as well. Headquarter of Tesco is in Hertfordshire, UK and has workforce of nearly 472,000 employees (Plunkett 2009, 80).

In this research, we will make an analysis of the business performance of TESCO Plc over the past three ...