Thomas Cook collapses: Why and what happens now?

Running Head: Economics
0
Thomas Cook
ECONOMIC AND FINANCIAL MANAGEMENT
[/30/2020]
[Module Name & Code]
[Assessment Number]
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Economics
1
Executive Summary
The effective decision in the company can be taken through analyzing the economic market of
the country in which they are operating. As the market is very dynamic so there are many
contemporary issues that the companies faced. In this report, the company Thomas Cook has
taken which has collapsed due to their unstable market condition. If the company has properly
analyzed the micro and macro environment then the financial condition of the company can be
improved. The assignment relates to the economic and financial management of the company to
evaluate the performance of the Thomas Cook Company. In this report, the bankrupt company
has to be chosen in the UK so Thomas Cook has chased as it is the well-established company
which was the leading company in the UK and providing effective services globally. But due to
the increased liability of unpaid compensation, the company has decided to collapse in the year
2019.

Economics
2
Contents
Introduction......................................................................................................................................3
Economic impact on business organization.....................................................................................3
Background of the chosen company................................................................................................5
Income Statement of last three years...............................................................................................5
Microeconomic impact on business organization............................................................................8
SWOT..........................................................................................................................................8
Macro-economic impact on business organization..........................................................................9
PESTEL.......................................................................................................................................9
Recommendations..........................................................................................................................11
Conclusion.....................................................................................................................................11
References......................................................................................................................................12

Economics
3
Introduction
The business environments are very dynamic and there are many micro and macro-economic
factors that affect the business functioning. This report is about measuring the performance of
the organization that has failed in the economy of the country. The failure of the company can be
due to several factors such as due to change in political reasons, the economic conditions are not
favorable or many other factors (Ritzén and Sandström, 2017). In this report, the economic
theory will be applied and economic models will be evaluated such as PORTERS FIVE
FORCES, SWOT, PESTEL, etc. which helps in making certain decisions. In this report, the
positive and negative impact of these factors will be evaluated so that the economic performance
of the company can be evaluated.
Economic impact on business organization
There are many economic factors which affect the business organization such as due to the
interest rate, exchange rate, rate of inflation, demand and supply in the market, wage rate, etc. if
the economic conditions of the UK will be stable then the company expands to rise but if the
economic conditions are not good then it is expected that the position of the company will
decline. The interest rate in the UK and England are 0.75% which has risen from the previous
year so the economy has slowed down and it was impacting the companies. The inflation rate is
also high in the UK as it was 2.48% which was disrupting the business planning and even the
companies are making less investment. The economic growth has declined due to the rising
inflation and prices of the services and products rise in the market.