Financial Performance Analysis of Tesco Plc. - Company Project Report

This report presents a comprehensive financial analysis of Tesco Plc., addressing key aspects of the company's performance. It begins with an overview of Tesco's commercial activities, highlighting its market share and diverse product portfolio. The analysis then delves into the company's recent stock trades, examining price variations, trading volumes, and trade values. Furthermore, the report distinguishes between executive and non-executive directors, explaining their roles and significance within the company's governance structure. The analysis continues with an examination of Tesco's financial statements, specifically focusing on gross profit, operating profit, and turnover changes. The report also identifies and discusses an unfamiliar account from the annual report, shedding light on its importance to investors. The report utilizes data from the London Stock Exchange and Tesco's annual reports to provide a detailed and insightful evaluation of the company's financial health.

Running head: COMPANY PROJECT
Tesco Plc.
Name of the Student:
Name of the University:
Author’s Note:

Table of Contents
Question 1..................................................................................................................................3
Question 2..................................................................................................................................3
Question 3..................................................................................................................................4
Question 4..................................................................................................................................5
Conclusion..................................................................................................................................6
Reference....................................................................................................................................7
Appendix....................................................................................................................................8

Question 1
The British multinational grocery shop and a retailer shop headquartered in the United
Kingdom is having a substantial market share in the market thereby enjoying around 28.4%
of the total market share for the company. The company is the third largest retailer shop in
terms of the revenue generated by the company. The company has its commercial activities
primarily into the retailing industry with a global presence and with around 476,000
employee’s base. Tesco plc. Has a diversified product portfolio base which includes,
clothing, toys, furniture, electronics, petrol, software and other financial services. The Tesco
Plc. Company is listed in the London Stock Exchange and is also a part of the FTSE 100
Index. The company aims to provide a high value good with the feature of affordable costing
for the consumers. The company has expanded the business products and services by
applying organic and inorganic growth strategy for the company (Tescoplc.com 2018).
Question 2
The analysis were done by evaluating the 10 recent trades and incorporating the
variation in prices in the stocks and the relevant analysis on the volume traded on particular
day. The variation in the prices of the stock were analysed there assessing the movement of
the share price in these recent trades. The trend period taken for the analysis of the same was
on 2ND January 2019. (Vogel 2014).
The variation in prices were observed to be at a moderate level on the ten last trade
observed for the company where the share price moved around from 191.5 on 2-01-2019 to
around 191.40 that was the lowest price on the trade analysed for the company (Appendix 2).
The share price movement for the company was at a moderate level (Paul and Mitra 2017).

15:50:10 02-Jan-2019
15:50:10 02-Jan-2019
15:50:10 02-Jan-2019
15:50:10 02-Jan-2019
15:50:10 02-Jan-2019
15:49:47 02-Jan-2019
15:49:38 02-Jan-2019
15:49:37 02-Jan-2019
15:49:37 02-Jan-2019
15:49:37 02-Jan-2019
191.34
191.4
191.46
191.52
Tesco Plc. Share Price
The movement in the volume for the shares were analysed for the company where the
highest volume for the company was observed when the share price started hitting at the days
low of around 191.40 around 4061 share were traded on that single moment thereby making
the highest trade value for the stock in that particular trade analysed. The lowest trade for the
company was observed at 15:50 when the volume of the shares were around 24 shares
making it the lowest trade value for the stock on that particular day. The average volume for
the company was around 1118.9 shares for the company over the ten recent trade for the
company. The average trade value for the company was 2.14 million dollars (Vogel 2016).
Question 3
The executive director is a member of the board for a company however on the other
side the non-executive director is a member of the board for a firm who does not enjoy the
management roles and responsibility of a company or controls and influences the operations
of the company. The executive director for a company is also said to be a part of the
management however the non-executive director is not. Tesco Plc. has both executive and
non-executive directors in there company (Dewachter et al. 2015). The non-executive
directors provides the sound judgements and share their experience with the management so
that the same can be applied for the better growth and overall development of company. The

Chief Executive executes his leadership skills in the company thereby managing the
operations and guiding the management in their daily day-to-day operations. The company
engages in overall development and incorporates the ideas and experience shared by the non-
executive directors of the company. The company then review all the crucial decisions of the
company with the help of both the executive and non-executive directors of the firm. Tesco
Plc. has defined the roles and responsibility associated with the managerial position of the
executive and non-executive directors of the company so that the operations of the company
runs smooth and effective.
Question 4
The gross profit of Tesco Plc. was around 2.9 million in the year 2017 and the same
has increased to around 3.35 million in the year 2018. The profit for the company grew
around by 15.44% in the trend period analysed for the company (Cucchiella, D’Adamo and
Gastaldi 2015).
The operating profit was around 1.168 million in the year 2017 and the same was
around 1.589 million for the year 2018. The operating income for the company rose in the
trend period analysed for the company. The key difference between the gross profit and
operating profit was that the operating income include all types of operating expenses and the
costs of revenue while the gross profit only includes the cost of revenue (Nesticò and Pipolo
2015).
The absolute and percentage change were analysed for the company using the last two
financial statement of Tesco Plc (Appendix 1).
Turnover Analysis
Absolute Change
157400
0
Percentage
Change 2.81%

The goodwill software and intangible assets of Tesco Plc. were one of the following
account, which we were unfamiliar with as the cost of these assets in the financial assets of
the company is at the significant level. The company is reporting the following account at fair
value after incorporating the annual impairment charges. However, investor should asses the
account and analyse the same thereby incorporating various factors and conditions in the
same. The account plays a significance role as the same contains important material
information about the company in relation to the goodwill of the company, which has been
created internally by the company and through acquisition of the other business and
companies.
Conclusion
The financial analysis of the Tesco Plc. was conducted thereby analysing the recent
trades performed. The share price analysis was conducted by analysing the trend in the share
price of the company and the volume traded for the company. The financial evaluation
included identifying the gross profit and the operating profit of the company and thereby
analysing the trend followed by the Tesco Plc.

Reference
Cucchiella, F., D’Adamo, I. and Gastaldi, M., 2015. Financial analysis for investment and
policy decisions in the renewable energy sector. Clean Technologies and Environmental
Policy, 17(4), pp.887-904.
Dewachter, H., Iania, L., Lyrio, M. and de Sola Perea, M., 2015. A macro-financial analysis
of the euro area sovereign bond market. Journal of Banking & Finance, 50, pp.308-325.
Londonstockexchange.com. (2019). TESCO share prices and trades (TSCO) - London Stock
Exchange. [online] Available at: https://www.londonstockexchange.com/exchange/prices-
and-markets/stocks/exchange-insight/trade-data.html?
page=0&pageOffBook=0&fourWayKey=GB0008847096GBGBXSET1&formName=frmRo
w&upToRow=10 [Accessed 2 Jan. 2019].
Nesticò, A. and Pipolo, O., 2015. A protocol for sustainable building interventions: financial
analysis and environmental effects. International Journal of Business Intelligence and Data
Mining, 10(3), pp.199-212.
Paul, S. and Mitra, G., 2017. Impact of Financial Ratios on Stock Price: A Comparative
Study with Hang Seng and Nifty Data. Research Bulletin, 43(2), pp.64-71.
Tescoplc.com. (2018). Annual Report 2018. [online] Available at:
https://www.tescoplc.com/media/474793/tesco_ar_2018.pdf [Accessed 30 Dec. 2018].
Vogel, H.L., 2014. Entertainment industry economics: A guide for financial analysis.
Cambridge University Press.
Vogel, H.L., 2016. Travel industry economics: A guide for financial analysis. Springer.
Vogel, H.L., 2016. Travel industry economics: A guide for financial analysis. Springer.

Appendix
1) Income Statement
Source: Tescoplc.com. (2018).
P artic ulars
Total
£m
Total
£m
Continuing operations
Revenue 57491 – 57491 55917 – 55917
Cost of sales -54092 -49 -54141 -52899 -116 -53015
Gross profit/(loss) 3399 -49 3350 3018 -116 2902
A dministrative expenses -1786 153 -1633 -1734 -261 -1995
P rofits/(losses) arising on property-related items 31 89 120 -4 114 110
Operating profit/(loss) 1644 193 1837 1280 -263 1017
Share of post-tax profi ts/(losses) -6 – -6 -30 -77 -107
Finance inc ome 98 – 98 109 – 109
Finance c osts -593 -38 -631 -630 -244 -874
Profit/(loss) before tax 1143 155 1298 729 -584 145
T axation -286 -20 -306 -185 98 -87
Profit/(loss) for the year from continuing operations 857 135 992 544 -486 58
Discontinued operations
P rofit/(loss) for the year from disc ontinued operations – 216 216 -37 -75 -112
Profit/(loss) for the year 857 351 1208 507 -561 -54
Attributable to:
Ow ners of the parent 857 349 1206 515 -555 -40
N on-c ontrolling interests – 2 2 -8 -6 -14
52 week s ended
24 F ebruary 2018
52 week s ended
25 F ebruary
2017

2) Share Price Analysis
Time/date of
execution Price Currency Volume
Trade
value* Trade type
Trade
flags MIC
15:50:10 02-Jan-2019 191.5 GBX 314 601.31 Automatic Trade ALGO XLON
15:50:10 02-Jan-2019 191.5 GBX 24 45.96 Automatic Trade ALGO XLON
15:50:10 02-Jan-2019 191.5 GBX 629 1,204.54 Automatic Trade ALGO XLON
15:50:10 02-Jan-2019 191.5 GBX 4,061 7,776.81 Automatic Trade ALGO XLON
15:50:10 02-Jan-2019 191.5 GBX 812 1,554.98 Automatic Trade ALGO XLON
15:49:47 02-Jan-2019 191.41 GBX 285 545.52 Off-book XLON
15:49:38 02-Jan-2019 191.4 GBX 1,791 3,427.97 Off-book SINT
15:49:37 02-Jan-2019 191.45 GBX 1,006 1,925.99 Automatic Trade ALGO XLON
15:49:37 02-Jan-2019 191.45 GBX 1,139 2,180.62 Automatic Trade ALGO XLON
15:49:37 02-Jan-2019 191.5 GBX 1,128 2,160.12 Automatic Trade ALGO XLON
Average Volume 1118.9
Average Trade Value 2142.382
Tesco Plc.
(Source: Londonstockexchange.com 2019)