Financial Management: Analysis of Tesco Plc and Benedict Co.

Running head: FINANCIAL MANAGEMENT
Financial Management
Name of the Student:
Name of the University:
Author’s Note:
Course ID:

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Executive Summary:
The report is prepared with the intent to analyse the business performance of Tesco Plc and
Benedict Co. After analysing the annual report of Tesco Plc in 2016, it has been found that the
organisation has made a smart move by investing in supplier and employee relationships that
lead to sound working environment for skilled labour. In addition, it manages to earn supplier
trust as well that has assisted the organisation in offering products at reasonable prices for raising
the loyal customer base and attracting the shoppers to shop from its stores. In case of Benedict
Co, it has been found that the organisation has experienced a significant decline in its financial
condition in 20x1 compared to the past year. Due to such negative image, it would not be
selected after adjudication of the tender documents, although they have been at the top of the list.
The second organisation would be selected owing to the concern that Benedict Co. has not been
a stable organisation in the long-term and the image of the purchaser might be affected in the
market in near future.

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Table of Contents
Introduction:....................................................................................................................................3
1. Tesco Plc:.....................................................................................................................................3
a. Concept of the term ‘stakeholder’ and three types of stakeholders of Tesco:.........................3
b. Role played by Environmental and Social Review and Corporate Governance Report in
demonstrating its performance to two identified stakeholders:...................................................5
2. Benedict Co.:...............................................................................................................................7
a. Purpose and relevance of the chosen ratios:............................................................................7
b and d. Analysis and application of the chosen ratios in the context of Benedict Co.:..............8
c. Aspect of performance of concern for Benedict Co.:............................................................15
Conclusion:....................................................................................................................................15
References:....................................................................................................................................17
Appendices:...................................................................................................................................20

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Introduction:
The objective of the report is to conduct financial analysis of the two organisations,
which include Tesco Plc and Benedict Co. It would look at the key stakeholders of Tesco along
with utilising the 2016 annual report of the organisation for reviewing its performance in terms
of social and corporate responsibilities against its social and environmental review and corporate
governance report. Tesco Plc runs supermarkets in UK, which intends to earn profits by
investing and selling greater quality products (Tesco plc 2019). Like any other global
organisation, Tesco works with a number of stakeholders like suppliers, customers, investors,
employees, shareholders and others. This paper would analyse the contributions of customers,
suppliers and employees to the financial performance of the organisation. Along with this, the
paper would evaluate the financial condition of Benedict Co., which is one of the organisations
that placed tender for the contract. Therefore, a range of financial ratios would be conducted to
gauge the financial performance of the concerned organisation.
1. Tesco Plc:
a. Concept of the term ‘stakeholder’ and three types of stakeholders of Tesco:
Concept of stakeholder:
As stated by Wood, Wrigley and Coe (2016), stakeholders are individuals, groups or
organisations having concern or interest in an organisation. They could be influenced by or
influence the policies, actions and objectives of the organisation. From the broader perspective,
some stakeholders mainly constitute of creditors, employees, customers, shareholders,
government agencies and others. The stakeholders could be categorised into two major groups,
which include internal stakeholders and external stakeholders. In this context, Jenkins and

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Williamson (2015) advocated that internal stakeholders are those groups that are formally parts
of an organisation, while the external stakeholders are individuals or groups that could affect or
affected by an organisation.
Three types of stakeholders of Tesco Plc:
It is possible to group the stakeholders of an organisation into suppliers, employees,
customers and government. From the annual report of Tesco Plc in 2016, there are three main
types of stakeholders, which include suppliers, customers and its colleagues/staffs. The other
stakeholders are identified as the external stakeholders and for Tesco; these stakeholders include
shareholders along with social and environmental stakeholders. Back to the three major
stakeholders, the organisation clearly indicated about them in its annual report as follows:
The customers are denoted as organisations or individuals purchasing the products or
services or make repeat purchases or recommend the organisation to other shoppers. This group
belongs to the external stakeholders of Tesco Plc and the loyalty of the customers is explained by
the shopping frequency and average weekly spends (Tescoplc.com 2019).
Suppliers are categorised as the second major stakeholders belonging to partnerships and
they fall under connected stakeholders.
` Colleagues are referred to by the organisation as its employees where Tesco invests for
providing better services to the customers. This group falls under the internal stakeholders of the
organisation (Hanson et al. 2016). In addition, Tesco has focused on key performance indicators
of its staffs, in which it referred to the measurements regarding recommendation and great place
for work or shop.

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b. Role played by Environmental and Social Review and Corporate Governance Report in
demonstrating its performance to two identified stakeholders:
From the three identified stakeholders of Tesco, suppliers and employees/colleagues
have been chosen due to two main reasons. Firstly, in order to become a reputed brand in the
retail sector, the employees are the first individuals found to be involved with the customers
(Bamber and Parry 2014). Secondly, the suppliers are the significant components in sustaining
the aim of the organisation to provide promotional products and stable prices. The two
stakeholder groups have not been chosen randomly, the selection has been due to the association
between the changes of the organisation affecting the way the staffs involve with the suppliers.
Tesco has undertaken certain significant changes in 2014 for redeveloping the
relationship with the suppliers. In October 2014, Tesco has drawn a line under the past and it has
started of resetting its working procedure and for this, the support of the managers and
employees are crucial. According to Zentes, Morschett and Schramm-Klein (2017), the changing
environment meeting the resistance of managers has particular thinking pattern in the working
environment exposed in their long-term experience. In case of Tesco, for dealing with the
possible staff resistance, the management has designed new reward schemes along with initiating
training and induction programs. The external factors could influence the staff behaviour as well
that comprise of government or business policies, communities and others. For managing the
effect of the communities, Tesco has realised its unique change for undertaking favourable
environmental change and its communities by enforcing different national and global projects
(Tescoplc.com 2019).
For dealing with economic and social issues in the environment, it is vital for an
organisation to have a wide competent spectrum including its capability for fostering knowledge