The Business and Financial Performance of Tesco Plc
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Oxford Brookes University
Research and analysis report
Topic 8
The Business and Financial Performance of
Tesco Plc.
By: BINAY YADAV
(6338 words)
March 2009
Reg. no.1346326
CONTENT
1. INTRODUCTION
1.1 TOPIC CHOSEN
1.2 REASON FOR TOPIC CHOSEN
1.3 AIMS AND OBJECTIVE
2. INFORMATION GATHERING
2.1 SOURCES USED AND REASON
2.2 METHOD USED TO GATHER INFORMATION
2.3 LIMITATION TO INFORMATION
3. ANALYSIS AND PRESENTATION
3.1 OVERVIEW
3.2 FINANCIAL ANALYSIS
3.2.1 REVENUE ANALYSIS
3.2.2 PROFITABILITY MEASURE
GROSS PROFIT MARGIN
NET PROFIT MARGIN
3.2.3 EARNING MEASURE
RETURN ON CAPITAL EMPLOYED
3.2.4 STABILITY RATIO
GEARING RATIO
INTEREST COVER RATIO
3.2.5 LIQUIDITY RATIO
CURRENT RATIO
QUICK RATIO
3.2.6 INVESTOR RATIO
BASIC EARNING PER SHARE
DIVIDEND PER SHARE
SHARE PRICE
PRICE / EARNING RATIO
3.2.7 EFFICIENCY MEASURE
NE T ASSET TURNOVER
RETURN ON TOTAL ASSET
3.3 NON FINANCIAL ANALYSIS
SWOT ANALYSIS
STRATEGIC ANALYSIS
4. CONCLUSION
5. RECOMMENDATION
6. BIBLIOGRAPHY
7. APPENDICES
RATIO CALCULATION
FINANCIAL STATEMENT
1. INTRODUCTION:
1.1Topic Chosen
This research and analysis report is based on topic 8 The business and financial performance of an organization over a three year period. This report analyses the financial situation of Tesco Plc. This report will analyse the financial situation of Tesco Plc from an investors point of view. It will be carried out by looking at the key ratios and important aspects of the business and evaluating Tesco performance in light of general economic environment. To make the analysis more meaningful, J Sainsbury, one of the close rivals has been chosen.
1.2 Reason for the topic chosen
I have chosen this topic of analysing the position of Tesco Plc because of my interest in the retail sector and have always been attracted by vision and values what Tesco possess in comparison to its competitor. I am also impressed by the values of Tesco which its core purpose is to create value for customer to earn their lifetime loyalty. Tesco is the leading retailer in the UK market occupying over 31.2% market share (TNS worldpannel 30 December 2008) despite of entrants of many rivals in the same sector. Tesco has a well established and consistent strategy for growth which has allowed them to strength the core UK business and drive expansion into new market. EC Harris writes in a article that Tesco have been able to sustain a long term position in its development programme because of the track record in being able to deliver up to 30% cost saving in schemes, improving on the aggressive delivery plan as well as introducing retail rollout best practice such as programme management and supply chain management.
The press release www.ft.com says that Tesco has cast itself as the nations biggest discounter response to research suggesting that consumers are more anxious about food prices. And I am so interested to know that how Tesco is much profitable after being the biggest discounting superstore.
Tesco plcs has opened a chain of convenience store named “Fresh and Easy” Neighbourhood market in 2007 in United States which is one of its key expansions. They have opened over 60 stores since last November and are still continuing its expansion. Also the financial news on 12th August 2008 announces that Tesco is going to develop cash-and-carry business