Financial Performance Analysis

Financial
Performance
Analysis

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Ratio analysis for businesses:......................................................................................................3
TASK 2............................................................................................................................................8
Balance score card:......................................................................................................................8
TASK 3..........................................................................................................................................11
Integrated reporting:..................................................................................................................11
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
The aspects in which a firm controls and tracks financial statements within an entity are
referred to as financial performance management (Gartenberg, Prat and Serafeim, 2019).
Financial performance management's key objective is to equate real outcomes to projections and
predictions and make corrections as required. Firms are well able to accomplish their targets by
help of proper management of outcomes. Basically, financial performance is a subjective
indicator of a company's ability to produce money from its primary mode of operation. The
concept is often used as a broad indicator of a company's overall financial performance over
time. The report is based on different kinds of tasks which have been performed. The main
organization which has been chosen for report is Tesco. This company was founded in year 1919
and operates at a global level. This company offers different kinds of grocery items with wider
portfolio of products. The objective of project report is to analyze financial performance of
chosen company with financial and non-financial aspects. There are three main tasks in report
under which first task is based on analyzing financial performance of company by help of ratio
analysis. In the second task, detailed analysis of balance scorecard matrix has been done. In the
end of report, critical analysis of the benefits and challenges of adopting Integrated Reporting
(IR) for selected organization has been done.
TASK 1
Ratio analysis for businesses:
Ratios Formula Tesco Sainsbury
Particulars 2018 2019 2018 2019
Current ratio
Current
assets
Current
assets /
current
liabilities 13600 12570 7857 7581
Current
liabilities 19233 20680 10302 11417
Results 0.71 0.61 0.76 0.66

Quick ratio
Quick
assets
Quick
assets /
current
liabilities 11336 9953 6047 5652
Current
liabilities 19233 20680 10302 11417
Results 0.59 0.48 0.59 0.50
Net profit margin
Net profit
Net profit /
revenues *
100 1210 1320 309 219
Revenues 57493 63911 28456 29007
Results 2.10 2.07 1.09 0.75
Gross profit margin
Gross profit
Gross
profit /
Revenues *
100 3352 4144 1882 2007
Revenues 57493 63911 28456 29007
Results 5.83 6.48 6.61 6.92
Gearing ratio
Debts
Debts /
Equity 34404 34213 14590 15085
Equity 10480 14834 7411 8456
Results 3.28 2.31 1.97 1.78
Price earning ratio