This website uses cookies to ensure you have the best experience. Learn more

Financial Support Essay

1610 words - 7 pages

Daz Ware
Gaz Price
Justine Williams

Managing Financial Principles and Techniques

Assignment 1

1. Explain what documents and statements you have consulted.

The Group Income Statement (P&L) and the Group Balance sheet were consulted. The following information was extracted. A companies profit and loss account shows revenue, expenditure and the profit or loss resulting in operations for a given financial year.

Item 2012
£ M 2011
£M
Sales (Revenue) 64539 60455
Cost of Sales (59278) (55330)
Gross Profit 5261 5125

Overheads Expenses (1652) (1640)
Property 376 432
Net Profit 3985 3917

Balance Sheet for Tescos – A financial statement ...view middle of the document...

It must be noted that there has been a fall from 2011 to 2012.

Net Profit: Net Profit x 100 3985 x 100 3917 x 100
Sales 64539 60455

= 6.18% =6.48%

The net profit takes into account the day to day operations of the firm. At over 6% there is a marginal reduction from the gross figure which is to be expected from a cash rich company, suggesting that the company is running with minimal overheads and running costs.

Net Assets: FA+CA-CL = 37918 + 12353 35167 + 11608
- 19180 -17731

= 31091 =29044

ROCE: Net Profit x 100 3985 x 100 3917 x 100
Net Assets 31091 29044

= 12.82% = 13.49%

This figure takes the profit performance and measures its value against the investment in the business. At almost 13% this is not a bad return. The figure has dropped from 2011.

Gearing: Debt 9911+688 9689+600
Equity 402+4964 402+4896

= 1.98 : 1 = 1.94 : 1

The ideal figure is 2:1, we can say that this is a highly geared company and its gearing is increasing, hinting at possible danger signs in equity and debt. This may be the norm for this type of company and will need to be compared to a similar retail company.

3. Using non-financial information – on both internal and external aspects of the company – explain how it is helpful in making a decision on this company.

For 2012, 12.2% of the fixed assets is tied up in goodwill.

Internal External
Socio – Cultural Continue to invest in people by employing an additional 20,000 people in the UK in the 2 years. Reinforcing its commitment to local communities.
Increase in employment.
Improving the market for the customer.
Technical Developing online shopping. Tesco bank up by 14%.
Economic Developing its own ‘value’ brand.
Expanding by creating ‘worlds’ such as baby and sports worlds. Increase in Employment.
Crisis tax in Hungary costs £38m which affected its profit margin in Europe.
Expanded in US and Asian market.

Political - Legal Carbon zero policies. Produced a carbon zero training academy.

In the UK Tesco is reinvesting by developing its people, its products, its stores.
In the US they are consolidating, they are not in profit yet. The focus will be on getting more of there existing stores to reach profitability before stepping up the rate of new store openings.
In Asia, sales grew by 10%, and are winning the share of the market.

4. Recommend a course of action. Would you advise the takeover bid to go ahead? Which parts of your financial and other analysis are the most important in coming to this decision?

Do not take over this company this year, wait one year to evaluate the figures again. If the figures dip it will represent huge problems for this cash rich company. The gearing aspect will give a clear indication of this company’s well being when compared to the figures from 2011.

This company is running a very tight ship (compare...

Other Papers Like Financial Support

Reserch Essay

299 words - 2 pages of the investor for which this company may be a fit, relative to that potential investor’s investment strategy. Provide support for your rationale. Select any five (5) financial ratios that you have learned about in the text. Analyze the past three (3) years of the company’s financial data, which you may obtain from the company’s financial statements. Determine the company’s financial health. (Note: Suggested ratios include, but are not

Regalatory Body Essay

270 words - 2 pages standards through a consulting process with individuals from around the world. This is done to ensure that financial reports are quality reports and that they are very easy to read and understand. The PCAOB (Public Accounting Oversight Board) this was created when the Sox Act was created. This protects investors and their investments from public traded companies. The ACIPA (American Institute of Certified Public Accountants) create the financial accounting and reporting standards through the FASB. They also assist with setting standards and technical support.

Donation Letter

321 words - 2 pages for the populations that Canon serves * Funding in support of economic development through financial literacy * Provide specialized training to a peer specialist on financial literacy Please join us at Canon Supply Company as we continue in our efforts to serve and respond to the needs of the community. Your assistance and expertise will be greatly appreciated. Sincerely,

Principles of Accounting

1094 words - 5 pages , regions, or firms in support of the above activities. Consulting (Strategic/Valuation) [pic] Main Financial Activities: [pic] Project, business-line, market, and/or financial advice which all center around valuation exercises designed to help the client make better decisions. Management Consulting (and General Management) [pic] Main Financial Activities: [pic

Assignment

616 words - 3 pages Week 10: Discussion #1 “Financial Analyst Skills” • Based on the information presented in the e-Activity, recommend the skills that are required to be a successful Financial Analyst, indicating how the role of a Financial Analyst adds value to a company. Provide support for your answer. o Confident Decision Maker: The financial analyst provides advice to brokers, investors, individuals and others regarding investments to

Fincial Iclusion

524 words - 3 pages Reserve Bank permitted commercial banks to make use of the services of NGOs, SHGs, MFIs and other civil society organization as intermediaries for providing financial and banking services. * To support the growth, a committee on FI was also formed in june 2006, to achieve a higher financial inclusion in the country. Challenges to Financial Inclusion: 1. For the Poor and Financially Disadvantage Group * Lack of legal identity like voter id

Decision Making Courses and How They Relate to Decision Making

1291 words - 6 pages calculation of typical life insurance contracts High percentage ii. Accounting Course Relation to Decision making Focus Computerized Support Principles of Accounting I Revenue recognition, inventory, long-lived assets, present value, and long term liabilities. construction of the basic financial accounting statements High percentage Managerial Accounting Teaches alternative methods of preparing managerial accounting Information, how

Planners Lab

302 words - 2 pages algebraic style in the user's native language. The Planners Lab is software for building Decision Support Systems (DSS). DSS is defined in many different ways depending upon the speaker or author. We define DSS as tools, processes, and methods for rehearsing the future. This is a term coined by Dr. Peter Keen, the founder of the DSS movement. In the early days of DSS there was a highly successful software product called the Interactive Financial

Companies Act

1791 words - 8 pages Contents Introduction • Target Company • Acquiring Company Transaction Flow Regulatory Authorities • Regulator/Role 2 2 3 8 Other Critical Issues • Court-ordered Meeting • Eliciting shareholders’ support ahead of the Court-ordered Meeting • Text of resolutions Documentation Requirements 9 9 9 10 Introduction In a merger transaction, the underlying goal is to consolidate the operations of the merging companies into one entity. In

Financial Vs Managerial Accounting

1340 words - 6 pages entity or a segment of the entity, such as a division, product, project, or territory.There are a very large variety of reports used in managerial accounting. The types of reports used vary by purpose (budgets, decision support, variance analyses, cost-volume-profit analyses, departmental performance reports, product costing reports, and many others). Financial and non-monetary information are prevalent in managerial accounting reports. Measurement

Effective Communication Work

546 words - 3 pages be able to start the course if the financial aid does not come through. Question: __________________________________________________________________________ Questions for Technical Support When you encounter technical problems with your computer within the ANGEL classroom, or if you have software issues, you can contact GCU Technical Support by submitting a ticket. To submit a ticket to Technical Support, follow these steps: 1

Related Essays

Hsa/525 Essay

294 words - 2 pages Using Financial Ratios Evangeline Hampton HAS/525 Debra Beazley May 9, 2014 Using Financial Ratios Introduction Suggest the financial ratio that most financial analysts would use to evaluate the financial condition of the company. Provide support for your rationale. Financial ratios are tools utilized to examine the financial condition and performance of company by financial analyst. Financial analysts look at many different

Financial Policies Essay

564 words - 3 pages , acceptable forms of payment such as cash, credit card, debit card, etc, and nay special circumstances for car accidents, or no insurance. o In what ways do medical office procedures support financial policies? Give Examples. o Medical office procedures must support financial policies. For example, if the financial policy states that only cash or check can be accepted as payment, then the office procedure must also follow that

Beaformativegroup Essay

668 words - 3 pages performance and position. Additionally, the analyst should use any comparison tables, figures, graphs, share price charts, as appropriate to support the financial analysis and illustrate the relevant issues. However, it may be appropriate to include these in the form of an appendix. Also, the analyst should bear in mind that ratios are valuable analytical tools and serve as screening devices. However, ratios themselves do not give much information

Accounting For Financial Instruments Essay

2485 words - 10 pages actual results of hedging or financial operation are known before disclosing the results. The fair value approach does seem more appropriate for the financial trading company whose rationale is to live, or die, through its financial activities than it is for other companies whose financial activities are to support their main business. Accordingly there are bodies who favor a dual regime using different bases for different types of company