Investment analysis report



Investment analysis report

Executive Summary

This report discusses the analysis of the company based on its financials, industry performance, technical analysis, management analysis and macroeconomic analysis. Each of the analysis is discussed individually. The company which is being chosen to conduct all these analysis is Tesco Plc. The industry analysis includes the complete information about the retail and grocery industry prevailing in economy in which the company is operating. The industry analysis does not only include the performance of the industry but also the key external drivers that are driving this whole industry. The financial analysis and technical analysis are discussed separately below. The financial analysis includes the profitability and liquidity analysis of the company. Although there are number of ratios that are used to evaluate the financial strength and judgment of the company, but in this report only two types of ratios are calculated and interpreted which gives out the best analysis of the company. The macro economic analysis includes the social, legal and environmental factors which are affecting the company and the industry as well.

Table of Contents

Introduction4

About Tesco4

Discussion4

Industry Analysis4

Per Capita Disposable Income5

Earnings still weak5

Consumer sentiment index7

Current Performance7

Macro Economic Analysis8

Legal Factors8

Economic Factors9

Social Factors9

Financial Analysis of Tesco Plc10

Profitability Analysis10

Liquidity Analysis12

Analysis of Financial Statements13

Technical Analysis14

Management Analysis15

Company Culture15

Company Performance16

Management Style16

Conclusion16

Introduction

About Tesco

Tesco came into existence in 1919. It was Jack Cohen's idea that gave rise to such a huge and gigantic organization. Tesco is involved in grocery and general merchandising retailing. Tesco is considered on number three largest retailer in the world if we gauge its position in terms of revenue. First store of Tesco started its operation in 1929. Tesco is one of the companies that are listed in London Stock Exchange. Tesco has diversified both geographically and into areas such as retailing of books, clothing, electronics, furniture, finance, telecom and music download. Tesco is operating over 3,700 stores globally and employing over 440,000 people. Tesco operates in 13 countries outside the UK - Republic of Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland in Europe; China, Japan, Malaysia, South Korea, Thailand and India in Asia, and the U.S (Copeland, 2000).

Discussion

Industry Analysis

The five years to 2016 will be crucial for the Supermarket and Grocery Stores industry. As the nation pulls out of the recession, the industry's greatest fear is that Americans will lose interest in their airtight budgeting and revert to overpaying for regular take-out and restaurant meals. With high-paced consumer lifestyles based around long workweeks and little free time, many gladly choose to pay the added premium for the convenience of pre made foods. Although supermarkets still offer staple products that will keep industry demand relatively stable, the quality and value added of the goods are much more volatile. As incomes and consumer spending ease back to pre recession levels, researchers expects that shoppers will be much more likely to purchase premium brand, value-added products. Researchers forecasts that industry revenue will grow slightly between 2011 and 2016 at a rate of 0.1% per year to ...