Financial Statement Analysis for 2018 to 2020 Financial Year

Financial Statement
Analysis for 2018 to
2020 Financial Year

EXECUTIVE SUMMARY
Financial statements are a critical part for any working organisation. It aids the business to easily
perform the different business activities. The management of the business analyse these financial
statements to understand the performance of the business and how they can bring changes in the
business which will be beneficial for the business to create a strong edge in a competitive
market. The following report highlights how Tesco, a British food and consumer goods retailer
in the UK uses the financial statements of the business to analyse the business performance. The
interpretations of different financial ratios is performed within the report following the valid
recommendations to the business.

Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Calculation of different financial ratios of Tesco for the last three years...................................4
Results of Ratio Analysis.............................................................................................................7
Recommendations......................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13
APPENDIX....................................................................................................................................14

INTRODUCTION
Tesco plc is a British food and consumer goods retailer established in Welwyn Garden City,
England. In terms of revenue earnings, it is the third-largest retailer, and it is the ninth-largest in
terms of revenue growth. Tesco PLC was founded by Jack Cohen in 1919 in London, England.
After returning from the war, Cohen began selling food from a small booth, generating a profit of
£1 on sales of £4. Tesco is one of the country's largest supermarkets, employing around 530,000
people and providing millions of customers each week in 14 countries. Tesco's Basics The goal
is to work together to improve what matters (Kusuma, and et.al., 2020).It's true to their roots, but
it's lot more relevant to today's era and the type of firm they prefer to be. The main goal is to use
ratio analysis to analyse the company's financial performance from 2019 to 2021. Along with
presenting all data information in relation to ratio analysis using charts and identifying problems
based on the ratio Provide relevant recommendations for effective company improvements at the
conclusion of the report.
MAIN BODY
Calculation of different financial ratios of Tesco for the last three years
CALCULATIONS:
Tesco PLC
Input data for Liquidity Ratios: 2019 2020 2021
Current Assets 13,889 13,893 10807
Current Liabilities 8,395 4,763 5190
Inventories 2,617 2,433 2069
Cash 4,277 4,137 2510
LIQUIDITY RATIOS: 2019 2020 2021
Current Ratio 1.65 2.92 2.08
Current Assets/Current Liabilities
Quick Ratio (or Acid Test Ratio) 1.34 2.41 1.68
(Current Assets-Inventories)/Current Liabilities
Cash Ratio 0.51 0.87 0.48