Analysis and Evaluation of the Business and Financial Assignment

''An analysis and evaluation of the business and financial performance of
Tesco as compared to Sainsbury ''

Executive summary
The competition among businesses in retail sector has become so intense that it is not
easy for firms to attract more customers and retain their old ones. For this purpose, it is required
by organizations to analyze, evaluate their financial and business performance at regular
intervals. In the present dissertation comparison between the financial performance of Tesco and
Sainsbury has been carried out.
It can be stated that positivism philosophy and deductive approach is used to carry out
research on the above mentioned topic. The information has been collected from both primary
and secondary sources. Furthermore, quantitative technique of data analysis is used to carry out
evaluation of information collected.
The results of study highlight that the financial and business performance of Sainsbury is
very good as compared to Tesco. Along with this, it can be recommended that the company is
required to take corrective measure for improving sales and profits.

Acknowledgment
I would like to thank my supervisor who has helped in throughout competing this
dissertation. The continuous support from my guide and his/ her efforts helped me in learning,
overwhelming immense knowledge and motivated me. I would also like to thank my family and
friends for their support and faint in me.

ABSTRACT
The measurement of financial performance of business gives a deeper insight into the use
of financial resources by business. The UK retail industry is highly growing and attractive
sector, therefore, investors are willing to invest in retailing organization. The study aims to make
a comparative analysis into the business as well as financial performance of Tesco and
Sainsbury, both are leading retail organization in the UK. A quantitative approach is selected for
the investigation to which a positivism philosophy is adopted. The data for the present study
have been collected from secondary sources including books, journals, articles, research papers
and online stuffs. To assess the financial performance of Tesco and Sainsbury, annual reports
prepared by the both the companies for last 5 years are used to gather financial information.
Ratio analysis is used to carry out the accurate financial analysis in which Sainsbury is found
more efficient as compared to Tesco in terms of financial performance.

Table of Contents
Acknowledgment..................................................................................................................................3
ABSTRACT.........................................................................................................................................4
Table of Contents................................................................................................................................5
INTRODUCTION................................................................................................................................1
Main Body............................................................................................................................................1
1.1 Background............................................................................................................................1
1.2 Rationale of investigation......................................................................................................1
1.3 Significance of the proposed research study..........................................................................1
BACKGROUND OF RESEARCH......................................................................................................3
2.1 Introduction............................................................................................................................3
2.2 Significance of the business and financial performance to the stakeholders.........................3
2.3 Ratio Analysis and significance.............................................................................................4
2.4 Classification of the ratios.....................................................................................................4
2.5 Limitations of the ratio analysis.............................................................................................5
Aims and objectives.............................................................................................................................6
RESEARCH METHODOLOGY.........................................................................................................7
3.1 Research philosophy..............................................................................................................7
3.2 Research approach.................................................................................................................7
3.3 Research design.....................................................................................................................7

3.4 Data collection.......................................................................................................................8
3.5 Data Analysis.........................................................................................................................8
3.6 Ethical and accessibility issues..............................................................................................8
DATA COLLECTION AND PRESENTATION................................................................................9
ANALYSIS AND DISCUSSION........................................................................................................9
CONCLUSION AND RECOMMENDATION.................................................................................16
REFLECTIVE STATEMENT...........................................................................................................19
REFERENCES...................................................................................................................................20
Appendix 1.........................................................................................................................................22
Appendix 2.........................................................................................................................................23

INTRODUCTION
Main Body
1.1 Background
Financial performance is denoted as a subjective measure of how an organizations is
using or can use assets to generate revenues as well as profitability (Rao, 2011.). The retail
industry of the United Kingdom has become competitive in terms of sales performance and profit
generation, however, it becomes important to compare the financial performance to assess the
effectiveness of retail in firms in generating revenues and profits (UK Retail Stats and Facts,
2016). The dissertation herewith aims at comparing the financial performance of two leading
retail organization of the UK named as Tesco and Sainsbury. Through this investigation, a
deeper insight to the existing financial position of both the firms have been quoted.
1.2 Rationale of investigation
The UK retail industry is highly growing and attractive sector, therefore, investors are
willing to invest in retailing organization. Tesco and Sainsbury Plc. both have gained a
significant market image however, a huge competition is witnessed in terms of improved
business practices and financial performance (UK Retail Stats and Facts, 2016). From the
investor’s point of view, financial strong company is a sources from where better returns can be
raised. Sainsbury Plc. is a the major competitor of Tesco , however, the questions is that which
firm is financially strong , hence, the study will attempts to make an analysis and evaluation
into business and financial performance of Tesco and Sainsbury. The rationale behind present
investigation is to analysis the financial information of both the companies so that various
decision makers can be assist with effective insights in financial health to facilitate effective
decision making.
1.3 Significance of the proposed research study
The herewith investigation is significant for retailing industry, academicians, researchers
as well as the management of both Tesco and Sainsbury. The academicians are going to get
insights into the use of ratio analysis and its interpretations. The investigation is going to analysis
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the financial position of Tesco and Sainsbury in last 5 year (2011-2015) which have hardly done
in previous studies. The information pertaining to financial performance of retail sectors will
allow researchers to identify the significance of ratio analysis and financial performance
companies in retail industry. In addition to that, investors and shareholder are going to be
assisted with effective decision on investments and the findings of this study will provide
assistance to them in making effective decisions. The comparison of the financial performance of
Tesco with its competitor, Sainsbury is going to be carried out in this investigation which will
provide information to the potential investors about the financial performance of Tesco and
Sainsbury so they can make decisions. The management of Tesco and Sainsbury are going to be
recommended with the ways to improve financial performance.
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