Importance of Financial Management for TESCO Ltd.

Introduction to Business
Studies

Contents
PART 1 (Case Study)......................................................................................................................1
Introduction..................................................................................................................................1
Main Body...................................................................................................................................1
Conclusion...................................................................................................................................3
PART 2 (Report)..............................................................................................................................4
Introduction to Human Resource Management...........................................................................4
Roles of Human Resource Management.....................................................................................4
HRM at TESCO Ltd....................................................................................................................5
Organisational Culture.................................................................................................................6
Conclusion...................................................................................................................................7
REFERENCES................................................................................................................................8

PART 1 (Case Study)
Introduction
Financial management is one of the most essential activities of a business organisation
which involves planning, organising, allocating and utilising the company’s limited financial
resources for attainment of business goals and objectives (Shapiro and Hanouna, 2019). TESCO
Ltd. was started in the year 1919 by Jack Cohen and is one of the biggest grocery supermarket
chain of United Kingdom. Headquarters of the company are located at Hertfordshire, England,
United Kingdom (Palmer, 2005). In the following case study, aspects and effectiveness of
financial management by TESCO Ltd. is being determined through its ratio analysis underlying
the importance of financial management for TESCO ltd.
Main Body
Importance of Financial Management for TESCO Ltd:
Financial management is one of the most important activity and function of management of
the company which ensures the long-term growth and sustainability of the business. Importance
of financial management for TESCO Ltd. can be comprehended by considering the following
points:
Optimum utilisation of funds: Financial management is primarily concerned with optimum
utilisation of available funds at the disposal of company. It involves deciding and evaluating
various alternative sources of finance and allocating the limited funds of company to diverse
organisational activities for accomplishment of objectives (McMenamin, 2002).
Financial decision-making: Financial management improves the effectiveness of financial
decision-making such as decisions related to capital expenditure and resource acquisition. With
the help of effective financial management, the managers of TESCO Ltd. can better maintain the
liquidity position of the company and take better financial decisions.
Increases Profitability: Profit is the primary objective of any business organisation and the
ability to earn maximum revenue and profits depends a great deal on the effective allocation and
utilisation of funds of the company which is an important aspect of financial management
(Musah, Gakpetor and Pomaa, 2018). Hence, financial management at TESCO Ltd. is crucial for
improving profitability of the company.
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