Tesco’s performance in the two preceding year 2008 and 2009 has been good and the company has been performing with its best abilitites. Although the company has operated well, there are few areas that my need improvement. The profitability of the company has been good and has increased a bit but the net profit margin has decreased, indicating that the company’s conversion of its gross profit to net profit is rather low and it has gone bad in the year 2009 as compared to 2008. The liquidity is a bit shaky and needs some attention.
The liquidity ratios calculated above clearly predict that the company is facing some working capital issues; the feasible result for the current ratio is 2:1, whereas the feasible result for acid test ratio would be 1:1. According to the ratios calculated, TESCO does not have the necessary current assets to deal with its current liabilities. The company as per the calculations above seems to have too many current liabilities (almost double to the amount of the current assets), such an effect is really alarming for any company and Tesco should clearly employ techniques to overcome this issue.
The chairman has concluded that the company has performed well during the year end 2009 although there were major economic downturns for the global business environment due to which many weak companies collapsed. Considering that particular economic recession, TESCO has performed exceptionally well in the year 2009. Besides this, the chairman has pointed out on the acquisition of TESCO personal finance held by the Royal Bank of Scotland considering this an organic growth for the company. TESCO has certainly grown over the years and it would have been in a much better state if it was not for the global economic recession.
Debenhams is a leading department stores group. Debenhams has a strong presence in key product categories including women’s wear, menswear, home wares, health and beauty, accessories, ...
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The research includes financial statement analysis of the company’s 2010 accounting period and 2011 accounting period. The financial statements indicate Tesco Plc fared financially well during the 2010 and 2011 accounting periods. Part 1 (a) Chief Executive’s Review Some of the contents of the chief executive officer’s report are useful.
60,000. Plant and Machinery Item 1: As per IAS 16, depreciation charge for the current year would be cost divided by the useful life. As such, the charge would amount to ?800,000/5=?160,000. Plant and Machinery Item 2: Assuming that the policy of depreciating plant and machinery for 5 years applies to all items of plant and machinery, the depreciation charge for the year in relation to this item would be ?
FINANCIAL ACCOUNTING ESSAY Table of Contents Table of Contents 2 Introduction 3 Assets 3 Use of Technology and Revenue Generation 4 Asset Valuation 5 Source of Funds 6 Conclusion 7 References 8 Introduction Ford Motor Company is one of the leading automobile manufacturing companies of the world which was founded by Henry Ford in the year 1909 (Yahoo Finance, 2012).
In the final accounts, it is an expenditure that is deducted from the revenue. Deprecation shows the amount of decrease in the past worth of assets. Stakeholders can review this data and identify when to purchase substitute assets for the organization. For instance, an industry frequently replaces its manufacturing equipment at some time throughout its operations.
Hence it is not necessary for Foster’s to show that there is a current obligation in its financial statements. However due to the past events, it can be construed that there is a possibility of outflow of resources in the future. In this case,
t and machinery for 5 years applies to all items of plant and machinery, the depreciation charge for the year in relation to this item would be £180,000/5=£36,000.
Motor Vehicles: The depreciation charge for the new vehicle purchased would be £25,000 x 40% = £10,000. The
Profitability ratios are used in the determination of a bottom line of a company and the returns it offers the investors. They basically show the overall performance and efficiency of a company. Ratios in this category are dived into
See appendix 1 (Albrecht 2007, pp. 901).
(a): when preparing the profit and loss account, the sales increase by £ 3,000 has been factored in. On a similar note, the quarterly payment of electricity cost and the reduction of the electricity by £
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