Financial Analysis of Tesco Plc.

Running head: ACCOUNTING FOR DECISION MAKERS
Accounting for Decision Makers
Name of the Student:
Name of the University:
Author’s Note:
Word Count: 1655

1ACCOUNTING FOR DECISION MAKERS
Executive Summary
The aim of the report is to conduct a financial analysis on the Tesco Plc. Company and
analyse the financial performance of the company in the trend period of 2015-2018. The
financial analysis of the company was done with the help of the ratio analysis and horizontal
and vertical analysis of the company. Profitability, liquidity and leverage of the company
were some of the key factors that were analysed in the due course of the assignment.
Horizontal and Vertical Analysis of a company are some of the crucial steps that were
performed for analysing the company.

2ACCOUNTING FOR DECISION MAKERS
Table of Contents
Introduction................................................................................................................................3
Discussion..................................................................................................................................3
Ratio Analysis........................................................................................................................3
Horizontal and Vertical Analysis...........................................................................................5
Year Wise Performance.........................................................................................................5
Business and Growth Strategy...............................................................................................6
Limitation of Ratio Analysis..................................................................................................6
Conclusion..................................................................................................................................6
References..................................................................................................................................8
Appendix..................................................................................................................................10

3ACCOUNTING FOR DECISION MAKERS
Introduction
Tesco Plc. Company is one of the largest Multinational British Grocery Company
operating in the United Kingdom. The company in terms of revenue is said to be the world’s
third largest company globally. The company is having operations globally across seven
major countries Asia, Europe, Thailand, Ireland, Hungary and UK. The company is listed in
the London Stock Exchange with its ticker symbol as “TSCO” and is also a part of the FTSE
100 Index (Wood, Coe and Wrigley 2016).
Discussion
Ratio Analysis
The financial analysis of the Tesco Plc. Company was done with the help of the
quantitative assessment tool; ratio analysis for the trend period 2015-2018.
Gross Profit Margin: The gross profitability of the company changed has shown a
consistent upward trend for the company in the trend period from -3.87% in the year 2015
and was around 5.83% in the year 2018 (Wood, Wrigley and Coe 2016). The gross
profitability of the company has been consistent for the company where the growth of
revenue and costs were comparatively equally.
FY 2018 FY 2017 FY 2016 FY 2015
-6.00%
-4.00%
-2.00%
0.00%
2.00%
4.00%
6.00%
8.00% 5.83% 5.19% 5.24%
-3.87%
Gross margin ratio = Gross
profit/Net Sales