Importance of Accounting and Financial Management in Retail Companies: A Case Study of Tesco Plc

ACCOUNTING
PROJECT

ABSTRACT
The research has identified that importance of the accounting and financial management
concept along with the issue that the retail company might face while dealing with this aspect.
The report has also defined the method of the accounting and financial management. Further, the
research also analysed the ratio of the Tesco and their competitor Sainsbury and concluded they
the Tesco’s performance is better than its competitors. But also concluded that the company need
to improve their performances when it compared to their own past performance. The research
also recommended the company with accounting and finance consultant in order to overcome the
issues and also to keep eyes on the government steps to overcome the change taxation rates.

TABLE OF CONTENTS
ABSTRACT....................................................................................................................................2
INTRODUCTION...........................................................................................................................5
Background..................................................................................................................................5
Research Aims and Objectives....................................................................................................5
Research Question.......................................................................................................................5
Rationale......................................................................................................................................6
Significance.................................................................................................................................6
LITERATURE RIVIEW.................................................................................................................6
Theme 1 Concept and Aspects of Accounting or Finance management.....................................6
Theme 2 Different methods of accounting and financial management.......................................7
Theme 3 Identification of issues faces by the company while addressing the aspects of the
accounting and FM......................................................................................................................8
RESEARCH METODOLOGY.......................................................................................................9
Research type...............................................................................................................................9
Research approach.......................................................................................................................9
Research philosophy....................................................................................................................9
Data collection.............................................................................................................................9
Data analysis..............................................................................................................................10
Reliability and Validity..............................................................................................................10
Research Limitations.................................................................................................................10
Ethical Consideration.................................................................................................................11
Findings, Analysis and Discussion................................................................................................11
Ratio Analysis of Tesco Plc.......................................................................................................11
Ratio Analysis of Sainsbury company.......................................................................................13
Interpretation and Discussion....................................................................................................15
Aspects of Taxation policy at Tesco Plc....................................................................................18
CONCLUSION..............................................................................................................................19
RECOMMENDATION.................................................................................................................19
REFERENCES................................................................................................................................1

INTRODUCTION
Background
Accounting is a day-to-day process of recording the financial transaction of the company
along with summarize and present the results in the form of reports in order to analyse the
performance of the company. So, in this context the research will cover the aspects of the
accounting or FM at Tesco company and the main objective of the research is to identify the
issues faces by the Tesco. Tesco is the largest food retailer company in the UK that offers the
grocery to their customers all over the world along with 3400 stores nationwide (Rosnizam and
et.al., 2020).
Research Aims and Objectives
Aims:
 “To address the different issues of the Accounting and Financial Management faces by
company.” A study on Tesco Plc.
Objectives:
 To understand the concepts and aspects of accounting and financial management.
 To evaluate the various methods of accounting and financial management for Tesco
company.
 To identify different issues might face by the Tesco while addressing the accounting and
financial management aspects.
 To recommend corrective measure to the company in order to overcome the accounting
and financial challenges.
Research Question
Q.1. What does the mean of accounting and financial management aspects?
Q.2. What are the various methods of accounting and FM that are available to the Tesco
company?
Q.3. What are the different issues that the Tesco Plc. might faces while considering the aspects
of the accounting and FM in the company?
Q.4. What are the recommendations available to the company so that the company can reduce its
issues related to accounting and FM?

Rationale
The current study is based on the issues faces by the company while incorporating accounting
and financial management aspects. It is important for the company that they overcome all the
issues before such issues badly affects their performance and productivity. That’s why in this
research the researcher will discuss the operational and financial performance of the company on
the basis of their annual report and explain the importance of annual report. Further, the research
will cover the comparison of the Tesco’s annual reports data with their competitors reports and
industry in the form of literature. For this the researcher will select the secondary sources such as
Tesco past trends, annual reports, websites, published articles etc.
Significance
With the help of accounting or financial management (FM), the company can not only identify
their profit percentage but also compare their profit with their competitors profit making ability.
The ratio analysis is important factor and helps the research in further analysing and
interpretating the performance of two company of same sector and come with a result that whose
performance is better. It is also important in identifying the issues faces by the company while
addressing the aspects of the accounting and FM. And the steps they need to adopt in order to
solve these issues and improve the performance of the retail business. It is also significant for
analysing the gaps between the expected figures as defined by budgets and the actual figures of
income and expenses.
LITERATURE RIVIEW
Theme 1 Concept and Aspects of Accounting or Finance management
As per the opinion of the Turysbekova, Konysbaeva and Dyrka (2019), accounting and
finance management is important for all business in order to identify and understand each and
every aspect of daily transactions and operations. For example; managers of the company can
look out and manages the sources of the cash inflows and cash outflows by preparing the cash
flow statement and take appropriate steps in case of negative flows. For managing their income
and expenses the managers of the company use the accounting and finance tools and techniques
in their business and build a stronger potential for the growth of the company. Not only that the