Strategic Corporate Finance

Strategic corporate finance

Table of Contents
Part A...............................................................................................................................................3
Introduction..................................................................................................................................3
Financing strategy........................................................................................................................3
Gross Profit Margin.................................................................................................................3
Operating Profit Margin..........................................................................................................4
Beta..............................................................................................................................................4
Investment strategy......................................................................................................................4
Dividend Policy...........................................................................................................................5
Conclusion...................................................................................................................................5
Part B...............................................................................................................................................6
Part C...............................................................................................................................................8
References......................................................................................................................................11

Part A
Introduction
Tesco PLC, founded in 1919 and based in Welwyn Garden City, the United Kingdom,
operates as a Grocery retailer with its subsidiaries altogether (Bloomberg, 2018). The company
provides with insurance and retail banking services as well (TESCO PLC, 2018a). It currently
operates in the United Kingdom, the Czech Republic, Hungary, Ireland, Poland, Malaysia,
Slovakia, India, Thailand and many more internationally. Customers are served by the company
through 6,809 stores and online as well. It currently has 440,658 employees (Reuters, 2018).
As of July 16 2018, Jason Tarry has been appointed as the new CEO of the company
(TESCO PLC, 2018b). In 2018, Tesco completed merging with wholesaler Booker Group
(TESCO PLC, 2018c). UK’s leading food business is created by these two companies who
brought together wholesale and retail expertise.
Financing strategy
Ratio analysis is a tool that has been developed for analyzing the numbers found in the
financial statements of organizations (Fraser, Ormiston & Fraser, 2010). Ratios are required for
linking the three types of financial statements.
The profitability ratios are widely used across organizations. They help in determining a
firm’s capabilities of earning sufficient returns.
Gross Profit Margin
The GP margin is calculated by dividing the Gross income by the net revenue (Lan,
2012). It determines the cost of products and pricing decisions of a firm. The firm’s figures