The Perspective of a Selected Private Company Firm: A Case Study on the Impact of the Pandemic in 2020

THE PERSPECTIVE OF A
SELECTED PRIVATE
COMPANY FIRM IE CASE
STUDY AND ITS REACTION
TO THE IMPACT OF THE
PANDEMIC IN 2020 WHAT
CAN BE LEARNED FROM THE

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Analysing financial performance for both crises period and non pandemic...........................3
2. Company performance and strategy during covid..................................................................5
3. Financial statement analysis....................................................................................................6
4. Ratio analysis........................................................................................................................10
5. Risk factor organisation is surveying in existing crisis situation..........................................12
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
Financial management is defined as managing the financial performance of the business
entity in the respective market. This report is based on the case study of the Tesco Company in
respect to its financial performance. The organisation was established in the year 1919. The
founder of the company is Jack Cohen. Headquarter of the company is located in England,
United Kingdom. Company is currently operating its operations at approximately 7005 locations
in United Kingdom and all other locations. This report is project the financial management of the
organisation in context to the existing market trends. Henceforth, reports will emphasis over the
financial performance of the organisation with support of different financial management tools.
Comparative analysis of the organization with other business entities will also conduct in this
project. Ratio analysis will also be done to project the overall performance of the entity in
respective market. Furthermore, report will discuss different risk factor affecting the business in
the existing crisis situation.
MAIN BODY
1. Analysing financial performance for both crises period and non pandemic
The statement has been provided for the span of 3 years. From the analysis of income
statement it can be evaluated that company revenue is increasing as compared to previous years.
In previous covid period years such as 2018 to 2019 is in upward trend that is increasing from
5,74,91,000 to 6,39,11,000 which is an positive sales growth of company. While comparing
revenue from the period of pandemic it can be understood that organization does not get
affected due to the crises as the revenue has enhanced which is a positive indicator of
continuous growth and sustainability till 2020. In year 2021 the revenue has dropped to
57887000 due to crises effect which requires improvement for inclining sales. In case of sale
that Tesco has incurred in order to continue its operational practices is varying from 5,41,41,000
to 5,97,67,000 in previous and as compared to pandemic the cost 53,53,8000 that is lower from
earlier. This is reflection that expenditure ahs declined with varying sales revenue. This may
positively impact the firm. Gross profit is inclination stage of Tesco as it is continuously
moving in high direction in both the mentioned situation. The strengths and weakness with

regards to income statement is its net profit and gross profit is showing favourable outcome in
crises as well non pandemic circumstances. In addition to this, weakness is more effective
measures can be taken in order to enlarge sales.
Balance sheet provides assistance in preparing important decisions regarding the
investments, etc. There are various types of people that utilize it to formulate proper structure.
The Tesco balance sheet can be analysis in following form which will aid to get more insights
into company policy of handling business activities (Ragas and Culp 2021). Liquidate position
can be understood by assets which is decreasing from 2018 to 2019. In 2020 it has enhanced by
4686000 and then again dropped to 3598000. Company need to have good liquidated position
for meeting its short term obligations. Reducing cash and equivalent assets largely impact its
market position. In same aspect inventory has went down which tend to represent negative sign.
Declination of net receivable shows company’s efficiency of collection period from debtors
(Tesco financial statements, 2021). Non current assets such as property, plant, etc are also
lessening in both mentioned environment which does not represent much change. Total current
liability has failing off from 19238000 to 15997000 it is positive dimension. Lessening liability
reflects Tesco is taking important measures which positively affect the firm’s goodwill in
favourable manner. Non current liability in period of covid 19 in year of 2020 is 21122000
which is higher than current year 2021. It validates the statement that important course of
actions are taken by Tesco Plc. in respect to dropping the liability. Shareholders equity in non
crises era 2018 & 2019 are 10480000 and 14858000 respectively. The strengths that can be
identified from the evaluation of balance sheet is that company have less effectual pattern of
managing current assets. The strength is paying capacity of both short & long term liability for
better position in market. There is no larger change in balances sheet related to pandemic and
non covid period.
Cash Flow Statement (CFS) of business gives details regarding in and out flow of cash
which is helpful in deterring current liquidity position. Tesco’s CFS is divided into three parts
operating investing and financing. The net balance from operation activities in 2018 is 2782000
lessened to 1966000 in non pandemic durations. In 2020 the situation ahs become worst as it was
only 38000 then inclined to 602000 which is representation of up lighting company from
adverse situation to normal. In investing part it had went to negative figure from 2018 to 2019