Managerial Finance: Financial Ratios, Performance Analysis, and Recommendations

Managerial Finance

Table of Contents
INTRODUCTION...........................................................................................................................1
PORTFOLIO 1 ................................................................................................................................1
Calculation of financial ratios for two years................................................................................1
Interpreting the financial performance of firm on the basis of ratio and charts..........................4
Recommendation on the poor performance...............................................................................11
Limitations of ratio analysis.......................................................................................................12
Portfolio 2 .....................................................................................................................................13
Investment appraisal techniques for adoption of two alternatives.............................................13
Evaluating Limitation of investment appraisal techniques........................................................16
CONCLUSION .............................................................................................................................16
REFERENCES..............................................................................................................................17

INTRODUCTION
The term “managerial finance” is referred to the branch of finance which concerns the
different managerial financial applications of finance techniques. The sound financial
management leads to create the value through the allocation of the scarce and optimum resources
among the competitive business opportunities (Aabo, Hvistendahl and Kring, 2020). It is referred
to the aid to the implementation and monitoring of business strategies and helps the business
companies to achieve their goals and objectives of the business company. The report is based on
the managerial financial position of TESCO plc and Sainsbury plc. The report below includes
the financial ratios, the analysis of financial position and investment potential of the companies,
recommendations for the poor performance, limitation of the ratio analysis along with its
conclusion.
PORTFOLIO 1
Calculation of financial ratios for two years
Ratio analysis refers to measuring and analysing the performance of financial statements
of companies and it is done by investor and analyst to make better decision in future (Al-
Malkawi and Pillai, 2018). It helps in identify the liquidity, efficiency and probability of
organisation. Its importance is increasing day by day in operation of company and helpful in
deep analysis of firm.
The ratio analysis of two entity Tesco and Sainsbury to determine from the view of point
of investor and able to analyse the higher profit in long run and efficiency in company.
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