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Finance & Accounting
Pages 8 (2008 words)
Tesco: Case Study Introduction Tesco is a UK based Multinational Corporation founded by Jack Cohen in 1919. It deals with groceries and general merchandise. Today in terms of profits, Tesco is the world’s second largest retailer, and the third largest on the strength of revenues.
The company’s corporate history shows that “it had a market capitalisation of approximately ?24.4 billion as of 15 January 2012” (Tesco Plc’s brand licensing, n.d.). This paper will critically analyse Tesco’s financial strategy with respect to the firm’s sources of funds and dividend policy. The paper also recommends an appropriate financial strategy for the organisation. Tesco’s financial strategy In order to analyse the company’s financial strategy effectively, one must evaluate Tesco’s financial performance over the last years. The following chart indicates the firm’s turnover and profit for the last five fiscal periods (2007-11). (Tesco’s turnover, cited in Legan, 2011). From the above figure based on Tesco’s historical financial data, it is evident that the Tesco’s turnover and thereby profit have been consistently increasing over the last five years. At the end of the 2005-06 financial period, Tesco was positioned as the world’s fourth largest retailer behind Wal-Mart, Carrefour, and Home Depot with turnover ?38,300 million and a profit of ?1,576 million. ...
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