FINANCIAL REPORTING

Financial Reporting - Tesco PLC

Financial Reporting - Tesco PLC

Table of Contents

Company Overview1

Tesco PLC1

Analysis of the Mission2

Competitor Analysis2

Performance of the Company4

Strengths4

Weaknesses6

Financial Statement Analysis6

Statement of Performance by the Chairman6

Press Reviews7

Conclusion8

References10

Appendix A: Financial Statement Analysis11

Profitability Ratios11

Efficiency Ratios11

Liquidity Ratios11

Investment Ratios12

Financial Reporting of Tesco PLC

Company Overview

Tesco PLC

For the purpose of this paper, I have chosen Tesco PLC in order to carry out a strategic and financial reporting analysis of UK's retail giant. Tesco PLC was established in the year 1919 by an entrerprenuer named Jack Cohen. He utilised the incentives which was given to him for his time served in the army that fought in the World War I. However, in the year 1924, Cohen bought a devision of the Tea company named TE Stockwell. He later named it on the three initals of the company TE Stockwell and Cohen, his name, and decided to name his company TESCO. Jack Cohen decided to open Tesco's very first store in the year 1929 in a London town of Edgware. Initially, Cohen adospted the strategy which he called “Pile it High and Sell it Cheap”. Eventhough this strategy attracted a great deal of customer towards Tesco, it ended up creating a brand which was suitable for middle class customers and earned itself the image of a store which was low-end.

During the seventies, tesco acquired numerous companies which include Burnards, Williamsons, John Irwins, Victor Value, Charles Phillips and Harrow Stores. However, all of these companies did not incorporate effectively in Tesco due to lack of proper management. Additionally, the stores of Tesco were not well equipped and small in size. The products which Tesco offered at that time seems quite ordinary. However, increase in customer income means that the customers want products with high quality. This resulted in shutting down of many stores in order to focus completely on providing products with high quality.

Analysis of the Mission

The mission of Tesco is to be able to build customer value in order to achieve customer loyalty throughout Tesco's life span. The success of the company relies on its people and its customers. The people are employees who work for them and customers are individuals who shops form them. It is highly possible that the customers will return at Tesco if they like what they get. This is line with the company's value which states that no one treats customers and employees the way Tesco treats them.

Tesco PLC is a very well-known internatiional retail store. In this era of globalisation Tesco has percioeved itself playing a significant role to help diminish environmental affects. Even though Tesco was based in U.K., it has been able to develop itslef into a global retail giant and grocery store chain. It has around 440,000 employees working all over the world and its sales has exceeded the 59 billion pound mark in Feburary of 2009. The operating income of Tesco PLC has passed the 3 billion pund mark. These statistics prove that Tesco has achieved the status of the Britain's biggest retail store in ...