Financial Performance Management: Analysis of Two Companies

Financial performance
management

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Financial performance using the ratio analysis of two companies.............................................3
Critically determine the Balance scorecard.................................................................................8
Evaluating the benefits and challenges of the Integrated reporting..........................................10
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Financial performance management refers that company is manages and monitor
financial results across organisation. The primary objective of the company to compare the goals
and objective of forecasted and make adjustment accordingly (Agyabeng-Mensah, Afum and
Ahenkorah, 2020). In this report the company that is chosen is Asda, which is UK based
company that deals in supermarket chain and it is second largest supermarket chain in the UK.
The second company that is chosen is Tesco, this is also UK based company that deals in retail
stores and largest supermarket chain in Britain. In this report, it is being discussed about the
financial performance of the companies and evaluate their annual financial performance. Apart
from that critically evaluate the Kaplan and Norton's balance scorecard as strategic management,
It is being analysed the benefits and challenges of adopting integrated reporting for the selected
organisation and determine the effectiveness of the company.
MAIN BODY
Financial performance using the ratio analysis of two companies
Tesco Ratios 2018-2019
2018 2019
Liquidity ratios
Current ratio: Current assets/current
liabilities
Current assets 13577 12570
Current liabilities 5512 8012
current ratio. 2.46 1.57
Quick ratio: Quick assets/current
liabilities
Quick assets 11314 9953
Current liabilities 5512 8012
Quick ratio 2.05 1.24

Profitability ratio
Gross profit ratio: GP/sales*100
Gross profit 3350 4144
Net sales 57491 63911
GP Ratio 5.83 6.48
Net Profit ratio; NP/Net sales*100
Net Profit 1208 1320
Net sales 57491 63911
Net profit ratio 2.1 2.07
Efficiency ratio
Inventory Turnover
Ratio:COGS/Inventory
COGS 54141 59767
inventory 2263 2617
ITR 23.92 22.84
Fixed Assets Turnover ratio:
Revenue/Fixed Assets
Revenue 57491 63911
Fixed Assets 54474 55541
FATR 1.06 1.15
Investment Ratios
Debt 20678 21545
equity 10480 14834
Debt/equity 1.97 1.45