Business Accounting Assignment :Tesco

Added on - 21 Apr 2021

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RUNNING HEAD: Business Accounting0Name of the studentTopic- Business AccountingUniversity Name
Business Accounting11IntroductionThis report is accompanied by the financial information of a company. It is evaluated thatthere are several financial information which is used by the external users of the company tomake the investment decision such as balance sheet, profit and loss and shareholders informationstatement. Non-management external users do not make Investment Company for its businessbut they invest capital with a view to earning revenue on the same. In this report, TescoCompany has been taken into consideration. It is the UK based listed company which is runningits business on a domestic and international basis. The non-management external users areinterested in evaluating the past performance of a company and invest on the basis of past andexisting financial performance. Therefore, they ideally use balance sheet, profit and loss andshareholders information statement. It is evaluated that financial statements are the main keysource of information which is used by stakeholders to make effective investment decisions.Description of the companyTesco Plc, trading as Tesco, is a British multinational grocery and general merchandiseretailer company. The Headquarter of company is in Welwyn Garden city, United Kingdom. TheCEO of company is Dave Lewis who takes all the imperative decisions. The stock price of thecompany is 202.00GBX-6.60 (-3.16%)(Lakis and Masiulevičius, 2017).Key information of TescoAs Per the annual report of Tesco Company, the overall turnover of the company rose by4.3% to£49.9 Billion. The operating profit of company is £5,750m which reflects the goodearning capacity of the organization.The qualitative characteristics of useful financial information reflect the understanding,comparability, verifiability and timeless which could improve the usefulness of information.Non-management external users need to analyze whether the performance of a company iseffective or not. If they find that the financial performance of a company is not effective then itmay destruct the value of the investment (Lakis and Masiulevičius, 2017).
Business Accounting2The objective of financial statements is to provide the financial information such as aperformance of company, position and business sustainability of the company. It is consideredthat if stakeholders use this information to either to invest in Tesco plc or to take their investmentdecisions. There are several Non-management external users who evaluate financial informationnamed as balance sheet, profit and loss and shareholders information statement before investingin Tesco Plc.Financial information of Tesco Company could be evaluated by using the following financialstatements.ParticularDetailsBalance sheetIt contains all the assets and liabilities of thecompany. It reflects the net assets and capitalemployed in Tesco.Cash flow statementIt reflects the cash inflow and outflow from thebusiness in the particular year.Income statementIt is prepared to record all the expenses andincome of company. It is prepared to evaluatethe profit and loss of the company.Shareholders statementIt reflects the equity share holders details andchanges in sameCharge annexureIt showcases the details of charges created bythe assets of the company.The objective of the essay is to discuss how the financial information meets the needs of fivedifferent non-management external users.There are several five different non-management external users which are given as belowBanks and financial institutionsAs per the perception ofYoo, and Shim, 2017, it is reflected that the bank and financialinstitutions are the main sources of finance which provide capital to the organization. However,they need balance sheet information to evaluate the available assets which could be used tocreate a charge on the assets. This will help non-management external users to analyze the creditrating of the company and to what extent it would be able to pay back its debts.Creditors
Business Accounting3These are the persons who provide stocks and other material to the organization on creditbasis. They need the income statement and last past years financial books to determine whetherthey should give stocks and other material on credit basis or not.Tax authorities and regulatory agenciesThese tax authorities and regulatory agencies are the main bodies that implement taxregulatory requirements and impose tax amount. It is evaluated that Tesco needs to submit SECregulatory compliance report with the tax authorities to showcase how much tax company hasbeen paying to the government.CustomersThese are the key stakeholders in the company. They evaluate the quality check list andother trademarks detail of company to determine whether the company is providing the goodquality of products in the market (Jhanji, Facebook Inc, 2017).InvestorsIt is evaluated that investors are the persons who invest in the capital. They need to analyzethe balance sheet, profit and loss and shareholders information statement before investing capitalin the business. In addition to this, the company needs to summarize the historical information onperformance, financial position, and business activities to make an investment decision in thecompany(Cañibano, 2017).As per the perception ofHenderson, et al. 2015 it is reflected thatthe qualitative intents of usefulfinancial information reflect the understanding, comparability, verifiability and timeless of thecompany by using the financial information of the Tesco. It is analyzed that company needs toprovide all the imperative information to its stakeholders so that they could make their financialinvestment decisions. However, Tesco Plc has been following international financial reportingstandards in its financial reporting framework (Henderson, et al. 2015).It not only helps incomplying with the reporting requirements but also establishes harmonization in the domesticand international reporting rules and regulations (Collier, 2015).
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