FINANCIAL MANAGEMENT

Financial Management

[Name of the intitution]

Financial Management

Introduction

Thi report provide an analyi and comparion of two companie i-e; Teco Plc and omerfield, both from the retail indutry. The report demontrate the ue of an appropriate range of ratio in order to compare the companie from the management, invetor and lender' viewpoint. All the data for ratio calculation ha been obtained from the annual account of both the companie for the year ended 2005.

1.1 Determine how to obtain financial data and ae it validity

Teco i one of the world' leading international retailer. ince the company firt ued the trading name of Teco, in the mid 1920, the group ha expanded into different format, different market and different ector (Teco at a glance, acceed 24-10-2005). The Group' principal activity i the operation of food tore and retailing, purchaing, property invetment, property development, peronal finance and other activitie. The Group operate in 2,365 tore around the world providing a variety of ervice and product uch a Teco expre, Teco Metro, Teco upertore and Teco Extra (Teco Plc, acceed 24-10-2005).

omerfield plc incorporate omerfield and Kwik ave upermarket which together operate over 1,300 tore nationwide omerfield i a high treet upermarket chain with tore in many prominent location throughout the UK. Offering high quality food with a particular emphai on freh food and convenient hopping, the tore provide a modern retail environment in a convenient location with friendly and efficient ervice. In the current competitive food retail market omerfield ha focued on it clear trength: providing hopper with an eay alternative to the larger out-of-town upermarket whilt maintaining a commitment to freh quality food (omerfield portfolio, acceed 24.10.2005).

The comparion hown in thi report would help to ae the companie' poition in term of profitability, invetment and olvency, which would not only be helpful for the management but alo the invetor a well a hort and long-term creditor of both the companie. The report provide an analyi baed on ratio calculation and then compare thee companie' data to help grap the current performance of the companie and thu howing a financial naphot of the companie' poition.

1.2 Apply different type of analytical tool and technique to a range of financial document and formulate concluion

The profitability of a company reflecting management' effectivene can be undertood by applying the following ratio to the financial tatement. Thee ratio are ued below to ae and compare the profitability of Teco Plc and omerfield, both from the ame indutry.

Return on Invetment (ROI)

Teco Plc

omerfield

14.95%

5.91%

 

The above ratio indicate the management capability to ue the company' aet effectively to generate return, which i 14.95% for Teco and 5.91% for omerfield. It how that Teco i earning about 14.95%, which i much greater than 5.91% in omerfield, making it clear that Teco' operational management i more efficiently utiliing the company' aet toward more profit a compared to omerfield a it i getting more return on the invetment made by the company.

Gro Profit Ratio

Teco Plc

omerfield

7.3%

3.29%

 

The gro profit (GP) ratio i a very important profitability meaure for ...