The Role of Accounting and Finance in Tesco Plc and Financial Ratio Analysis of Alpha Ltd.

Business Decision
Making- BM414

Contents
INTRODUCTION.................................................................................................................................3
TASK 1.................................................................................................................................................3
Discuss on the Role Of accounting and finance in Tesco Plc............................................................3
TASK 2.................................................................................................................................................3
Compute the financial ratios of Alpha Ltd. with the given financial statements................................3
Analyze and interpret the ratios and state the reason and causes for the changes in the two
consecutive years 2017 and 2018......................................................................................................3
CONCLUSION.....................................................................................................................................4
References.............................................................................................................................................5

INTRODUCTION
The performance of any company can be measured through accounting only. It is the
vital function for any company and is mandatory to perform for the various reasons. Finance
is the lifeblood without which no company can go on in a successive manner. Business
decisions highlights any decision that have effect on the operations, goals and future activities
of a business concern (Siti-Nabiha, Nordin and Poh., 2021). The business has to make sure
that whether it is applying the right kind of decision for the variety of distinct situations.
Business decisions helps in determining the long -term and short – term activities of a firm. It
is important to make business decisions as it impacts the longevity of the firm, expands
profitability, affects successful hiring activities. Ratio analysis is the financial and
quantitative technique that helps in the assessment of a company’s liquidity, operational
efficiency and profitability by reading its fiscal reports like balance sheet and income
statement. The upcoming report looks into the role of accounting and functions of the Tesco
Plc. In addition to this, it will comprise the computation of ratios of the Alpha Ltd.
Furthermore, the report also encompasses on the reasons and causes that affects the
profitability, efficiency and liquidity of the Alpha Ltd.
TASK 1
Discuss on the Role Of accounting and finance in Tesco Plc
Accounting is the key role function that every organization needs to perform whether
it is big or small. It is a system of maintaining, art of analyzing and interpreting the financial
situation of a business concern. Accounting helps the business to keep record of its day – to –
day settlements that happens in a company as it is not possible for the owner to keep the
transactions in mind. It helps in tracking the sales. purchase, expenses and income of the
business enterprise. Accounting is also useful for the business to attract the investments from
the interested parties. Finance is the money that a business uses for various operations, it is
foundation stone on which the company stands. Finance enables the Tesco Plc to manage the
funds and also avail them from the marketplaces whenever the business is in need.
Role Of accounting: Accounting is the huge source of communication to the Tesco Plc. It
communicates the achievements and accomplishments to the people who are directly or
indirectly involved in the business. Accounting is the method of identifying, measuring and
communicating the results to the parties and permit them to make informed decisions and

judgements. The function includes the systematized tracking, recording, analyzing,
summarizing the business settlements (Moh'd Ali, and et.al., 2020). The responsibility of the
accounting is listed as below:
 To keep the fiscal records: Accounting assists the businessman of Tesco Plc to
maintain the accurate records of its transactions like the sales. purchases, invoices and
receipts. Which helps in organizing the records up – to – date.
 Assists in monitoring the financial transactions: Accounting helps the company owner
and accountant to ascertain the amount of payment and revenue that it has to pay and
receive from the other parties by keeping the track of the financial records (Ballou.,
Heitger and Stoel., 2018)
 Making payments of bill: Accounting aids the managers in checking the invoices to
make sure the lawfulness of charges, fixing payment dates and paying those invoices
to the people to whom the business owes money like suppliers, vendors etc.
 Paying salaries of employees and other staff: Tesco Plc uses accounting for making
the payroll payments. These payments are made from the funds of company.
Moreover, the accounting is also used in managing employee benefit and deliver
work- related bonus to the employees (Weygandt and et.al, 2018).
 Helps in achieving the business objectives: Through accounting the accountant can
make various strategies and policies by interpretation of the financial statements and
make best decisions and plans to attain the desired objective.
 Assist in the preparation of budgets: The accounts department of Tesco Plc provides
the fiscal data to the other administration heads and the departments can use this data
to prepare the all in all budget for the company and the project budgets as well.
 For auditing purpose: Accounting helps the accountant experts to perform the
financial audits of the Tesco Plc. It helps the auditor to find the mistakes and take the
best corrective measures at the right point of time.
 To assess the financial resources: Accounting can help the business in the
identification of those areas that are bringing strengths and weaknesses to the
company. And the manager of the organization can evaluate how to overcome such
weakness, and implement the suitable strategies.
 To meet the legal requirements: Accounting allows the company to make sure that it
regulates with the principles, rules and regulations of government and fulfill the