FINANCIAL ANALYSIS

Financial Analysis

Financial Analysis

Introduction

In this report we will be analyzing the share price of a company along with its ratios and pother performance indicators. The company which we have chosen for this report is TESCO plc. Tesco ( LSE : TSCO ) is a multinational chain of stores retail headquartered in the United Kingdom .In 2008, Tesco became the fourth largest retailer in the world, displacing the fifth largest distributor Metro AG , the first movement of positions among the top five companies in the sector since 2003. Originally TESCO specializes in food and drinks, however they have diversified into areas such as clothing, electronics, financial services, selling and renting DVDs , compact discs, digital downloads , Internet service, telecommunications , medical and dental insurance and software as well.

Company Statistics

Tesco is the largest English distribution group with nearly 30% market share. Its activities are divided among 5 divisions; food retailing in the UK: 692 outlets (labels Extras, Superstores, Compact Superstores, Metro and Express stores) occupying an area of 2 million, food distribution (90 points of sale): textile, cosmetics, culture, pharmaceuticals, computers, optics, TV / Hi-Fi / Video, home appliances, etc. Virtual supermarket (tesco.com, and tescodirect.com tesco.net): food and no food; - financial services: insurance, loans, savings, credit cards, etc.. Tesco has more than 2 million consumers - international: 139 supermarkets and hypermarkets located in Hungary (45), Poland (40), Czech Republic (12), Slovakia (10), Thailand (24), South Korea (7) and Taiwan (1). The VN is distributed geographically as follows: UK (77%), rest of Europe (15%) and Asia (8%).

Share price over last 5 years

The share prices for TESCO plc for the last 5 years are as follows

Date

Open

High

Low

Close

Volume

8/17/2012

11.63

12.2

10

10.85

0.32 Mil

7/31/2012

12.03

12.77

10.75

11.59

0.16 Mil

6/29/2012

11.72

12.63

10.17

12

0.28 Mil

5/31/2012

16.43

16.88

11.78

12.02

0.26 Mil

4/30/2012

14.19

16.45

13.32

16.33

0.20 Mil

3/30/2012

15.47

15.7

13.31

14.19

0.17 Mil

2/29/2012

13.91

16.81

13.14

15.32

0.20 Mil

1/31/2012

12.64

14.35

12.64

13.88

0.16 Mil

12/30/2011

13.29

13.94

10.9

12.64

0.19 Mil

11/30/2011

14.7

16.58

11.43

13.33

0.29 Mil

10/31/2011

11.44

17.54

10.01

15.47

0.22 Mil

9/30/2011

16.71

16.71

11.33

11.6

0.19 Mil

8/31/2011

21.75

21.75

13.45

16.7

0.37 Mil

7/29/2011

19.38

23.39

18.79

21.26

0.23 Mil

6/30/2011

20.27

20.96

16.94

19.41

0.28 Mil

5/31/2011

18.85

21.21

16.46

20.37

0.29 Mil

4/29/2011

22.17

22.49

18.14

18.81

0.21 Mil

3/31/2011

18.41

22.36

16.43

21.93

0.25 Mil

2/28/2011

15.35

18.5

15.23

18.39

0.13 Mil

1/31/2011

16.14

16.19

14.2

15.26

0.14 Mi

12/31/2010

13.54

16.4

13.5

15.88

0.13 Mil

11/30/2010

12.81

14.18

12.36

13.21

0.10 Mil

10/29/2010

12.15

13.36

11.3

12.66

0.14 Mil

9/30/2010

10.08

12.58

10.08

12.03

0.12 Mil

8/31/2010

13.97

14.47

9.64

9.92

0.20 Mil

7/30/2010

12.32

14.45

11.55

13.7

0.11 Mil

6/30/2010

11.03

13.51

9.57

12.28

0.33 Mil

5/28/2010

12.53

12.62

9

11.23

0.18 Mil

4/30/2010

11.76

13.45

11.45

12.52

0.14 Mil

3/31/2010

13.69

14.42

10.85

11.67

0.16 Mil

2/26/2010

13.71

14.3

12.18

13.63

0.11 Mil

1/29/2010

13.13

15.24

12.69

13.07

0.17 Mil

12/31/2009

10.83

13.29

10.21

12.91

0.15 Mil

11/30/2009

8.67

10.99

7.72

10.69

0.24 Mil

10/30/2009

7.95

10.58

7.59

8.68

0.19 Mil

9/30/2009

7.61

9.14

7.2

7.98

0.32 Mil

8/31/2009

10.1

10.28

7.4

7.68

0.32 Mil

7/31/2009

8

10.28

6.38

10.03

0.33 Mil

6/30/2009

9

9.84

7.68

7.94

0.18 Mil

5/29/2009

10.14

11.41

8.51

8.9

0.22 Mil

4/30/2009

7.66

10.22

7.55

10.09

0.20 Mil

3/31/2009

7.45

9.65

6.25

7.82

0.16 Mil

2/27/2009

9.78

10

6.3

7.67

0.16 Mil

1/30/2009

7.1

10.34

7.1

9.94

0.21 Mil

12/31/2008

6.72

7.94

5.25

7.14

0.23 Mil

11/28/2008

11.35

11.48

4.75

6.9

0.28 Mil

10/31/2008

20.69

20.73

6.76

11.3

0.38 Mil

9/30/2008

33.64

34.02

20.11

21.39

0.30 Mil

8/29/2008

30.89

35.2

28.86

33.97

0.21 Mil

7/31/2008

31.75

32.82

27.77

31.07

0.24 Mil

6/30/2008

32.91

36.76

29.81

31.95

0.34 Mil

5/30/2008

27.32

34.26

26.53

33.63

0.31 Mil

4/30/2008

23.95

28.25

23.56

27.77

0.22 Mil

3/31/2008

24.58

26.5

18.88

23.95

0.28 Mil

2/29/2008

22.98

25.45

19.78

24.63

0.28 Mil

1/31/2008

28.89

30.1

21.29

22.74

0.23 Mil

12/31/2007

21.93

29.55

19.85

28.67

0.21 Mil

11/30/2007

29.23

30.44

21.28

21.88

0.19 Mil

10/31/2007

27.04

31.12

26.77

29.49

0.13 Mil

9/28/2007

27.22

28.72

26.22

27.15

0.10 Mil

8/31/2007

33.21

34.76

26.2

27.35

0.19 Mil

If we look at the trends of prices for TESCO plc, we will come to know that the prices suddenly fell down in the end of 2008. It can also be observed that it was same year when global economic crises affected he entire economy of the world. The graph below shows the trend of share prices for TESCO plc.

Funding of the Company

The Company has huge sum of money involved in it, however its funding is divided into 3 major categories which are as follows:

2007-08

2008-09

2009-10

2010-11

2011-12

Additional paid-in capital

170

187

190

196

207

Retained earnings

90

143

137

144

171

Accumulated other comprehensive income

45

22

36

36

36

Total stockholders' equity

305

352

362

376

413

The data above shows the overall composition of funding of TESCO plc for the last 5 years, however if we only talk about the composition of this year's capital and reserves of the company, then it can be illustrated as follows:

Ratios of the Company

The three major ratios selected for the analysis of TESCO plc are as follow:

2007-08

2008-09

2009-10

2010-11

2011-12

Return on Equity %

11.87

16.11

-1.47

1.91

6.85

Earnings Per Share USD

0.86

1.4

-0.14

0.18

0.69

Return on Assets %

7.61

10.91

-1.13

1.57

5.38

Return on Equity

ROE (return on equity, ROE) is where ...