Impact of Financial Information on Tesco: A Detailed Analysis

This report provides a comprehensive analysis of Tesco's financial performance. It begins with an introduction to Tesco, its mission, and value statements, followed by an overview of the problem statement, rationale, aims, objectives, and research questions. The report then delves into a literature review, exploring growth strategies, recession strategies, employment policies, and the application of general systems theory to Tesco. It examines the financial scenario, shareholder information, dividend policy, competition, and other relevant factors. The research methodology outlines the approach, design, data collection, and analysis plan, including ethical considerations. The core of the report lies in the data analysis and discussion, utilizing probability, liquidity, financial leverage, efficiency, and market value ratios to assess Tesco's financial health. The report concludes with findings, recommendations, limitations, and suggestions for future work, offering valuable insights into Tesco's financial performance and market position.

Running head: IMPACT OF FINANCIAL INFORMATION ON TESCO
Impact of financial information on Tesco
Name of the Student:
Name of the University:
Author’s Note:

1
IMPACT OF FINANCIAL INFORMATION ON TESCO
Abstract
The thesis structure explains the framework which has been followed by the
researcher thereby concluding the thesis in the stipulated timeframe. The first section of the
research consists of the introduction where a background of Tesco along with the financial
scenario of the company has been highlighted. The research aims and objectives have been
framed with respect to which the research questions have been constructed. The research
questions provide an idea about the issues that needs to be covered in this paper and thereby
concluding the research efficiently. The succeeding section of the thesis comprises of the
literature review where the variables that have been used in this paper can be highlighted. The
assessment that has been done by the previous researchers would be evaluated and thereby
the variables that are pertinent to the paper would be taken into consideration. The next
section of the paper is the research methodology where the process of data collection will be
highlighted. The various kinds of data that are available and the most precise data that is
useful for this paper would be used for the completion of the paper. The data analysis would
determine the findings attained from the data and this assessment would be used for the
purpose constructing the conclusion and the recommendation that can be given to the reader
in accordance to the effect of financial performance in Tesco.

2
IMPACT OF FINANCIAL INFORMATION ON TESCO
Table of Contents
Chapter 1: Introduction..............................................................................................................5
1.1 Background of the Study..................................................................................................6
1.1.1 Mission and value statements....................................................................................7
1.2 Statement of the Problem.................................................................................................8
1.3 Rationale of the paper......................................................................................................9
1.4 Aims and objectives of the research...............................................................................10
1.5 Research Questions........................................................................................................10
1.6 Structure of the Thesis...................................................................................................11
Chapter 2: Literature Review...................................................................................................12
2.1 Introduction....................................................................................................................12
2.2 Growth Strategy.............................................................................................................12
2.3 Recession Strategies.......................................................................................................13
2.4 Employment Policies.....................................................................................................14
2.5 General Systems Theory and Tesco...............................................................................14
2.6 Environment...................................................................................................................16
2.7 Diversification................................................................................................................17
2.8 Financial Scenario..........................................................................................................18
2.9 Shareholder Information................................................................................................19
2.10 Dividend Policy............................................................................................................19
2.11 Bad Credibility.............................................................................................................20
2.12 Competition..................................................................................................................21

3
IMPACT OF FINANCIAL INFORMATION ON TESCO
2.13 Summary of the Literature Review..............................................................................22
Chapter 3: Research Methodology...........................................................................................23
3.1 Introduction....................................................................................................................23
3.2 Outline of the method.....................................................................................................23
3.3 Research Approach........................................................................................................23
3.4 Research Design.............................................................................................................24
3.5 Data Collection Process.................................................................................................25
3.6 Data Analysis Plan.........................................................................................................25
3.7 Ethical Consideration.....................................................................................................26
Chapter 4: Data Analysis and Discussion................................................................................27
4.1 Introduction....................................................................................................................27
4.2 Analysis of the data........................................................................................................27
4.2.1 Probability Ratio.....................................................................................................27
4.2.2 Liquidity ratios........................................................................................................29
4.2.3 Financial Leverage Ratio........................................................................................31
4.2.4 Efficiency Ratio......................................................................................................32
4.2.5 Market Value Ratio.................................................................................................34
4.3 Discussion of the Analysis.............................................................................................35
Chapter 5: Conclusion, Recommendation, Future Work and Limitations...............................37
5.1 Conclusion......................................................................................................................37
5.1.1 Addressing the research objectives.........................................................................38

4
IMPACT OF FINANCIAL INFORMATION ON TESCO
5.2 Recommendation............................................................................................................39
5.3 Future Work...................................................................................................................41
5.4 Limitations.....................................................................................................................41
Reference List..........................................................................................................................42
Bibliography.............................................................................................................................49

5
IMPACT OF FINANCIAL INFORMATION ON TESCO
Chapter 1: Introduction
The world as we know it is changing and in the same way there has been development
of science and technologies that has made life easier all over the globe. The companies that
are operational in the modern world in the similar manner have been changing their ways of
operating in the economy in order to improve their performance and operational activities.
This development is significantly observed in the retail sector and especially in the European
market as the demand for retail products has increased in the market by a significant margin.
The rise in the level of demand has led to the entry of several new companies into the retail
sector and the main reason has been to share the profit and the customer base that is available
in the retail sector. The retail sector has been developing with the advent of time as the sector
has been looking to meet the desires and the needs of the customers who are coming from
different cultures. Similarly, Tesco, which is one of the leading retail sector chains in United
Kingdom and all over Europe, has been looking to expand their business and create their own
customer base and significant level of market share. Yu, Ramanathan and Nath (2014)
addressed that even though there have been several developments that are incorporated within
the operational structure of the companies, the process of gaining an understanding of the
effectiveness of a company is still dependent on assessing their financial performance in an
individual year. The companies that are operational in the economy has effective level of
accounting software system that is used by them in order to record all their transactions and
accordingly maintain construct a financial statement that can be looked down upon in order to
create a better working environment for the companies in the near future (Fornell, Morgeson
III and Hult 2016).
The paper that has been taken into consideration has the intention of analysis the
financial performance of Tesco and accordingly understands their level of effectiveness with
the help of which the company is able to operate in the economy. The effectiveness of their

6
IMPACT OF FINANCIAL INFORMATION ON TESCO
financial performance can even understood in a better way if their financial performance is
compared with other competitive companies of Tesco as well and therefore this paper in
order to undertake a comparison of the financial performance of Tesco, has even analysed the
financial performance of Sainsbury and Morrisons, which are two other retail chain
companies and thereby understand the actual position of Tesco in the economy. The financial
performance is understood in a better way with the help of computing the financial ratios of
the companies and therefore in the future course of this dissertation, construction of the same
would be done in order to complete this paper in an effective way.
1.1 Background of the Study
The extent of impact that takes places in the retail sector comprises of the several
factors that is related to every organization that are within this sector. Aguirre et al. (2015)
addressed that assessment of these factors are essential as these factors are helpful in creating
an understanding of how the retail sector companies are able to operate in the business and
how the companies are taking care of these issues in order to develop their business. The
development of a company is entirely dependent on the loyalty of the customers and the
development of customer loyalty is entirely dependent on the actions and the services that are
given out by the companies. The retail sector with the help of several sources has been able to
identify the features and the needs of the customers that need to be fulfilled in order to attain
customer loyalty as well as satisfaction. A customer remains loyal to an organization till the
time the companies are able to satisfy the customer needs and desires. In order to address to
these objectives, the organizations have developed the strategy of corporate social
responsibility with the help of which the companies try to take care of external stakeholders
and even create a sustainable plan that looks to take care of the environment and even the
community where the companies operate. Shin and Eksioglu (2015) explained that product
and service quality are essential features that are developed by the companies that are

7
IMPACT OF FINANCIAL INFORMATION ON TESCO
operational in the economy in order to develop their business. The extent to which the
companies are able to maintain customer satisfaction is understood when their financial
performance is analysed and in the same way the profit margin the extent of customer
satisfaction can be understood. The functional quality of any product assesses the behavioural
perspective and the use of the home furniture. The technical quality of a product associates to
the final utilisation of the products manufactured and these are the aspects with respect to
which the operational and the financial performance of Tesco can be understood that would
be used in order to complete this paper in a precise way.
Tesco is a worldwide general merchandising and grocery retailer that performs in
more than 4000 stores in the current scenario. The company has been functioning and
marketing in more than 13 markets globally and has been able to attain profit and competitive
edge. The company has multi format and flexible approaches and well established and unique
consistent strategy for the development, which aids Tesco in the rise in the total revenue.
It is seen that there has been a rise in the stores of Tesco during the time period of
2011 to 2017 and it is seen that there are over 3739 stores. The multinational shops and the
shops selling general merchandise of Tesco Plc were established in the year 1919 and the
company has a large number of employees all over the globe. The portfolio of the product of
Tesco is inclusive of the beverages and foods, financial services and home appliances. Tesco
is one of the renowned supermarket companies in UK and has been ranked with respect to the
share of the retail market.
1.1.1 Mission and value statements
Tesco is has the idea of establishing values for the customers to gain their lifetime
loyalty by gaining knowledge about the customers and be accountable to the societies and
even able be the first to satisfy the wants and the desires of the customers. Furthermore,

8
IMPACT OF FINANCIAL INFORMATION ON TESCO
Tesco covers food and non-food products, personal finance, internet retailing and petrol
retailing as well in the current period. They have the idea of keeping at the customers at the
priority and if the customers are pleased with the services and the products given by Tesco,
they will look to come back and shop again. Furthermore, Tesco has even incorporated the
club card service where the trusty and the loyal customers can avail point of order and special
vouchers in order to attain the mission statement.
Tesco has a market share that has been enhancing in UK sustainably and this has been
possible mainly due to the strategies that have been customer oriented. The company has
recorded a market share of 44.6% and this value has increased significantly from the previous
year. The shares of Tesco have been performing moderately in the past few months and the
share prices have shown an upward movement steadily.
1.2 Statement of the Problem
The declaration of the issues has influenced the researchers to initiate a research
process that is associated to the topic that has been selected in this dissertation. It is observed
that with the explanation of the development that has taken place in the economy and
globalisation that has taken place, there has been creation of new retail firms looking to enter
the UK market along with the monetary benefits that is subject to certain limitations.
Therefore, assurance of the impacts of these determinants is essential to be distinguished by
keeping in mind the end goal to develop different techniques. Retail industries are looked
upon to be a kind of an industry that tries to develop an approach that would be effective and
better with the help of which management of the retail companies are able to monitor the
overall operational activities of the business. The impact that framework of the companies
have on the overall business activities requires effective amount of supervision and thereby it
becomes easier for the companies to make use of the beneficial areas of the business and the
errors and the faults that are existent within the business can be recognised and then resolved

9
IMPACT OF FINANCIAL INFORMATION ON TESCO
in order to establish a better working environment along with effective level of relationship
with the employees.
The present research looks to inspect methods for benefit addition in order to enhance
the changes that are taking place in the retail sector of Tesco in accordance to their
competitors that would lead to effective operational and monetary benefits for the retail
organization. Because of the entry of the new companies, organizations with experience in
the field of retail shares their thoughts and views with the help of which the experiences can
be shared among the entire retail sector.
The development of the retail sector from time to time has created several issues and
these issues have significant amount of impact on the financial as well as the operational
performance of the companies and in this manner, assessment of the financial performance of
Tesco needs to be undertaken with the help of which the issues related to the business can be
understood and how Tesco has been taking measures in order to mitigate the issues and
develop their financial performance in accordance to their rival companies.
1.3 Rationale of the paper
The justification for undertaking this paper has been presenting the various elements
that are existent in the retail sector. UK is country that is developed and has small population
level. The nation comprises of a population that a need for diversity and therefore creating the
evaluation in accordance to the UK citizens would create an essential result for the research.
The development of globalisation and liberalisation in Europe, there has been availability of
the numerous multinational retail companies in the nation as the nation has extensive demand
for retail marketing. UK is making use of the area in the home improvement sector and there
is availability of the economic impacts that has influenced the companies to establish
themselves in the country.

10
IMPACT OF FINANCIAL INFORMATION ON TESCO
1.4 Aims and objectives of the research
The aims and objectives associated to the paper refer to the guidelines and the issues that
has to be resolved in order to complete the paper in an effective manner. The aims and
objectives have been given as follows:
 Critically assess the financial performance with association to the overall business
performance of Tesco in order to have an idea about their process of operations and
what actions they have been performing in the year “2014”thereby increasing their
level of sales and maintain competitive edge.
 The researcher even looks to provide lucid opinion with respect to the business and
the financial condition of Tesco to all their stakeholders.
 Synthesize the financial and the business performance to the precise implication of
the business strategies of Tesco, their impact on the financial presentation thereby
maintaining the long term competitive scenario.
1.5 Research Questions
The researcher in order to satisfy the research objectives, it is essential to construct
the “research questions” that would be answered in this research in order to complete this
paper in an effective manner. The following are the research questions.
Q1. What is the effect of financial information on Tesco in the year 2014?
Q2. Do the financial position and the business strategy of Tesco assist each other?
Q3. What are the key reasons that have an effect in the financial and the operational
performance of Tesco in the year 2014?

11
IMPACT OF FINANCIAL INFORMATION ON TESCO
1.6 Structure of the Thesis
The structure of the research explains the framework that needs to be followed by the
researcher so as to complete the thesis in the stipulated timeframe. The first section of the
research consists of the introduction where a background of Tesco along with the financial
scenario of the company has been highlighted. The research aims and objectives have been
framed with respect to which the research questions have been constructed. The research
questions provide an idea about the issues that needs to be covered in this paper and thereby
concluding the research in an effective manner. The next section of the research comprises of
the literature review where the variables that have been used in this paper can be highlighted.
The assessment that has been done by the previous researchers would be evaluated and
thereby the variables that are pertinent to the paper would be taken into consideration. The
next section of the paper is the research methodology where the process of data collection
will be highlighted. The various kinds of data that are available and the most precise data that
is useful for this paper would be used for the completion of the paper. The data analysis
would determine the findings attained from the data and this assessment would be used for
the purpose constructing the conclusion and the recommendation that can be given to the
reader in accordance to the effect of financial performance in Tesco.

12
IMPACT OF FINANCIAL INFORMATION ON TESCO
Chapter 2: Literature Review
2.1 Introduction
The literature review segment of the thesis has the idea of discovering the dependent
and the independent variables that would be used for the purpose of completing the paper.
There has been an observation that the variables play a pertinent role and these variables are
assessed with respect to the research aims and objectives and the issues that have been
highlighted so that effective answers can be obtained. The review of literature provides
answers and suggestions that have been provided by various researchers from various parts of
the globe with respect to the financial performance of retail organizations and even Tesco and
thereby an idea can be obtained with respect to the path that would be followed in order to
discover the idea that can be used to rectify the discovered issue. There are several elements
and activities that are performed by Tesco and all of these aspects are examined with the help
of which an idea about the overall activities of the business can be understood. The literature
review therefore provides an empirical analysis with respect to the activities that are
performed by the company in order to understand their operational activities and in the same
way these activities determine the financial performance of Tesco.
Tesco has been in the retail business with their functional activities having being
spread over UK, Japan, Malaysia, China, Korea, USA, Thailand etc. The firm is even into
retail insurance and banking services which is known as Tesco Bank. Tesco therefore has an
idea that their success is dependent on the employees and the customers.
2.2 Growth Strategy
The strategies of Tesco are reliant on five aspects and they are to become a successful
international retailer, to develop a core business in the market of UK, to become strong and
competitive in the food, non-food, enhancing the retail services and to put the society as the

13
IMPACT OF FINANCIAL INFORMATION ON TESCO
most important. The plan to classify has been on the recent development. The company has
expanded their business even in China by establishing the three Tesco Life Space shopping
malls in China. They have been concentrating on the customers and therefore have developed
Club Cards that act as the loyalty programs. The company even opened a zero carbon store at
Cambridgeshire. Tesco has the belief that extensive training for the employees, development
and the innovation with the suppliers (Schramm-Klein, Morschett and Swoboda 2015). The
other growth strategies include the effective returns form the shareholders and the
development of the financial services, new markets in Europe, Asia and USA and telecom
and non-food services and products. The company has the idea of becoming a zero-carbon
industry by the end of the year 2050 by decreasing the impact of carbon of the products that
are available within the supply chain and assisting the customers to lessen their own footprint
of carbon by the year 2020.
2.3 Recession Strategies
Tesco has been able to maintain their business in an effective manner during the time
of recession by undertaking investments in the employees, infrastructure and the offerings to
the customers. In spite of the challenges in the economic scenario, Tesco has been able to
develop their profits and sales in all over the globe. The strategy that has been implemented
by Tesco has assisted them to maintain their operations in the worldwide economic downturn.
Accountants and researchers trust Tesco was the main organization to survive the
retreat in the exploration survivability file. The data considered for this was not simply taken
a toll cutting but rather in view of components, for example, marking, cost administration,
web potential and client targeting (Cao and Li 2015). For example, Tesco supplanted a
considerable measure of high brand items with Tesco esteem items, which offer for less
however pull in more clients creating higher turnover, this decreased costs identified with
more costly items. Other cost reserve funds are through better utilization of IT, and from

14
IMPACT OF FINANCIAL INFORMATION ON TESCO
approaches and administration of providers to guarantee the best an incentive to the business
and client.
Tesco club card focuses and vouchers have been a colossal effect for client focusing,
by offering twofold club card focuses numerous clients who aren't consistent customer’s
progress toward becoming regulars (Cho et al. 2015). Tesco additionally screen their clients
much more strongly than different general stores. They investigate purchasing designs and
send vouchers in the post to pull in clients back, or when clients have not returned for some
time they send vouchers to allure them.
2.4 Employment Policies
The success of Tesco is dependent on the commitment and the experience and the
skills of their employees. The company has a competent strength of employees and the
sustainable training has provided to make sure that the employees have knowledge about the
customer service aims and objectives of the firm and are working towards accomplishing
them. Tesco has been an equivalent opportunities for the employers. The effective level of
internal communication aids in ensuring that the employees have effective knowledge about
the operations of the firm (Guariglia, Spaliara and Tsoukas 2016). The employees are
motivated and influenced to get involved in the financial performance with respect to the
profit sharing schemes, savings associated share option scheme and partnership sharing plan.
2.5 General Systems Theory and Tesco
According to Patten and Zhao (2014), the theory of General Systems explains that in
order to gain knowledge about a firm as a whole and it is essential to understand the
relationship between them. In a firm, the system aspects are the departments and the
individuals. The system aspects which follow in a firm are constructed in a highly difficult
ways to develop the super and the sub-systems, which follows an ordering that are hierarchal

15
IMPACT OF FINANCIAL INFORMATION ON TESCO
in nature. The operations of one aspect of a system are dependent on the other aspects of the
system. The aspects within a system are interdependent mutually. There is no aspect within
the firm that can exist actively without relying on the other parts. The other feature of the
system has been that they have boundaries that are highly permeable that permits the flow of
information in and out of the firm (Arun, Almahrog and Aribi 2015). The behaviour of the
system has been associated with the complexity concept. The tougher the system becomes,
the more intricate the behaviour becomes. The features of the complex and simple systems
have been outlined as follows:
 The systems that are simple are characterised
 A small number of fundamentals
 Very few interactions among the elements
 The attributes of the fundamentals have been pre-determined
 Communication among the elements are organised
 Well explained laws administer the behaviour
 The process does not develop over time
 The system does not follow their own goals
 The system remains unchanged by the influences in the behaviour
The features of the large and complex systems are:
 The system is related closely to the environment
 Huge number of fundamentals
 Not pre-determined attributes
 Communication among the fundamentals are organised loosely
 The behaviour is probabilistic
 The system develops over time

16
IMPACT OF FINANCIAL INFORMATION ON TESCO
 The sub-systems are intentional in nature and create their own goals
 The system is subjective to the influences of the behaviour
 The system is vastly open to the market and the environment.
A system that is complex in nature behaves in a manner that is unexpected and the
relationship among the effect and cause are complex to understand (Wongand Joshi 2015). A
system has been found to be less sensitive to the extrinsic structural influences than the
internal ones. The general force of unification maintains a systematic hierarchy unified with
respect to the developmental direction.
2.6 Environment
Tesco is known to be the fourth biggest retailer all over the globe and have
established the first “zero carbon shop” which acts as a feature of their promotions in order to
provide “carbon-neutral company” within the year 2050. The company has disclosed their
corporate obligations towards the reduction in the environmental alterations for example
dividing its usage in per square foot, recycling and reusing wherever possible (Jones,
Comfort and Hillier 2016). Tesco intends to put millions in sustainable environmental
innovation which is discovering more renewable resources to utilize sustainable power
source.
The environmental factors are winding up progressively critical throughout the years.
Environmental change has turned into a gigantic concentration for organizations. The
“Climate Change Act 2008” makes UK the primary country all over the globe in order to
have a legitimately limiting long heave structure to reduce carbon productions (Panwar et al.
2017). The government guarantees that associations are adjusting and that its strategies,
projects and speculation choice are made with regards to environmental change. By

17
IMPACT OF FINANCIAL INFORMATION ON TESCO
constantly rolling out ecological improvements Tesco fabricates notoriety as a more moral
organization.
One major issue that Tesco is confronting is nature element; as the developing
worldwide problems of the ecological issue, how Tesco reacts to this issue will have huge
effect to its future execution of the business. In the announcement, it was made sure that
Tesco would cut outflows from existing stores worldwide by no less than half by 2020, and
would try to confine air transport to less than 1% of the company's items. Besides, to cut CO2
and vitality sparing, Tesco additionally present a progression of procedure; by urge clients to
utilize reusable convey sack and reward shopping focuses to club individuals to lessen the
utilization of plastic packs; Tesco likewise acquaint new vitality sparing store with people in
general. As a major aspect of the environmental change program, the store's carbon
impression is 70% not as much as a proportional store. So far, Tesco has effectively gained a
considerable measure of ground, yet there are significantly more issues pausing.
2.7 Diversification
On the other side of development, Tesco is hoping to exploit the present question
towards banks following their part in the financial emergency. They had burned through huge
amount of money for buying half of Royal Bank of Scotland's offer. It is likewise intending
to extend its telecoms operation industry following the arrangement of Tesco promoting
Tesco telecom.
Tesco will endeavour infiltrate the fund advertise advance by offering current records
inside two years and furthermore offering contracts for their first time. Tesco has a gigantic
client base. They have a tremendous potential to expand turnover by pitching more items to
their current clients. They intend to open branches all inclusive not on in the United Kingdom
which could be a tremendous test for the organization. They have to time this venture

18
IMPACT OF FINANCIAL INFORMATION ON TESCO
flawlessly, particularly in the midst of the subsidence (Eccles, Krzus and Ribot 2015). They
expressed that it needs to manufacture the IT framework which required supporting the bank
framework, and this task is depicted as a huge effort.
2.8 Financial Scenario
The literature has tried to address the elements and the activities that are undertaken
by Tesco and an extensive assessment in a logical manner is undertaken. Pucheta‐Martínez,
M.C. and García‐Meca (2014) cited that the company has been looking to enhance their
financial performance and therefore they have been monitoring the activities that are
undertaken by the rival firms. There are several new and improved accounting tools that are
available in the market and most of the companies have been making use of the same. Tesco
in the similar manner has their own and unique accounting software system with the help of
which the company has been able to maintain all their financial transactions properly. The
assets and the liabilities that are related to the business are examined and with the help of the
software that are available to them the accountants prepare their income statements, balance
sheet and cash flow statements. These accounting processes determine the extent of net profit
that is earned by the company every year and the extent of asset and liabilities that the
company possesses (Usman and Amran 2015). The cash that is invested on the operating,
investing and the financial activities become easier to understand with the help of the cash
flow statements that have been constructed. The construction of these financial processes is
helpful in understanding the extent of development the business is having.
Tesco being a renowned retail chain has several outlets all over the globe and
therefore in it becomes difficult for them to maintain their overall income and expenditure.
The CEO of the firm has confirmed that they maintain unique accounting software that looks
to arrange all the transactions that are taking place globally in all their outlets and provide an

19
IMPACT OF FINANCIAL INFORMATION ON TESCO
accurate and overall result that assists the management of the company to understand the
profit that they are occurring.
See-To and Ho (2016) explained that construction of the financial ratios assists any
companies to understand the usage of their resources and the amount of liquidity, profitability
and the solvency the firm has. Even though these ratios are not disclosed in the annual report
of the companies, but Thakur and Srivastava (2015) cited that most of the companies look to
construct the ratios internally in a\order to self assesses their operational and profitability
scenario. When companies look to expand their business, they are in need of understanding
the changes that are essential and therefore these ratios play an essential role in order to
understand the overall scenario of the companies (Tjärnemo and Södahl 2015). Tesco in the
same way maintains their own line of looking after the financial aspect and even monitors the
industrial standards and the financial performance of their competitors in order to understand
their position and even gain knowledge about developments they can make in order to
improve their activities in a better way.
2.9 Shareholder Information
An essential factor in the eye of a financial specialist is foreseeing what's to come.
Investors are keen on organization execution, both long and here and now. They are
additionally intrigued by the organization's venture to expect development as well as so they
can accept levels of held income and money streams (Fraser, Bhaumik and Wright 2015).
This enables investors to make estimations on profit pay-out, the main type of money streams
an investor gets and foresee any development on share cost.
2.10 Dividend Policy
Tesco pay cash bonuses during the final and in the interim period. The profit is
relentlessly expanding even through the Recession. Yearly Dividends per share has expanded

20
IMPACT OF FINANCIAL INFORMATION ON TESCO
from the last year. The organization pay a genuinely low profit with a yield averaging 2.43%
from 2016-17. Low yields can prompt conceivable examples of high development not at all
like exceptional returns bringing about sharp falls.
2.11 Bad Credibility
Tesco were looked with a major authoritative issue. Tesco drivers of conveyance were
offered new contracts, which had more regrettable conditions and around 3000 to 6000
pounds less pay. This brought about drivers going on a 3day strike, causing issues for Tesco
when customers declined to shop in their stores and numerous drivers dismissed the new
contracts which brought about Tesco ending their positions. This issue implied Tesco needed
to invest a considerable measure of energy and cash with unions, while losing deals from
customers declining to shop with them and conveyances not being made. In spite of the fact
that this issue was just in one territory, the organizations picture would have been harmed by
news and reputation on the issue (Aykol and Leonidou 2015).
The competitive commission has begun to understand that the greater the retailer they
have a more grounded ability to constrain costs bring down from providers. Depicted as an
"ace hireling" relationship ranchers whine about Tesco's scratching off requests finally
minute and constraining cost lower than creation cost. In outrageous cases agriculturists have
challenged particularly finished drain costs (Yazdanfar and Öhman 2014). This shows Tesco
has done little to enhance their association with ranchers throughout the years. It could be
accepted that legislature may start to intercede soon as Tesco turns out to be more
untrustworthy.
Issues like this influence individuals to lose believe, they are uncertain if later on
more issues will emerge. When taking a gander at contributing you should believe an
organization ensuring they are solid and ready to give you what you need from them.

21
IMPACT OF FINANCIAL INFORMATION ON TESCO
Different financial specialists who get news of issues have a tendency to retreat and offer
stock. In the event that enough individuals offer cost will start to fall, this might be a chance
to buy shares at a lower cost as long as you acknowledge the dangers (Platonova et al. 2016).
Unfaltering profit instalments and low profit returns targets higher employees and
those on searching for long term venture. Trading out the business is relied upon to be put
resources into ventures with positive net present esteems as financial specialists are searching
for capital increases. This suits Tesco as one reason for a lower yield and profit is because of
huge interests in growing and making the organization more various.
2.12 Competition
The intense level of competition within the UK retail sector leads to the adverse cost
cutting and innovative ways with the help of which the companies are able to segment them
for their competitors. Rivalry between the bigger retailers brought about wars regarding the
values with the huge companies namely; Sainsbury and Tesco decreasing the edge of the
value for the business all in all as different competitors need to respond according to the
market.
The market is managed in an effective manner. The limiting framework and the
commissions to the mergers always try to observe the market in order to guarantee
competition in an effective manner. The management has dynamic additionally in creating
the limitations for the opening of the new stores. The developments look to originate from the
rise of the new and prospective customers, developing new products for the consumers and
from the non-preserving products for instance the money associated management (Chen,
Wang and Jiang 2016). In case of Tesco, they have looked to enhance and furthermore
differentiating their run of the product.

22
IMPACT OF FINANCIAL INFORMATION ON TESCO
Customers are as yet number one in the eye of the retailers. Accomplishment in the
business is as yet reliant on how well the retailer can meet the client needs. The expenses that
are observed in UK have been observed to be a dominant aspect. By looking at the recession,
it will place pressure on the retailers in order to place lower costs and maintain that extent of
level. The primary factor is that the customers are limiting their expenses and are reluctant to
purchase things that are extravagance and therefore are only purchasing the goods that are
essential.
2.13 Summary of the Literature Review
The conclusion of the literature has explained that the company has been making use
of effective financial strategies with the help of which the firm has been able to sustain and
improve their financial position in the global market. The researchers have even explained
that there are various aspects on which the company can focus on with the help of which the
financial scenario can improve. Hence, financial information is a key aspect for Tesco.

23
IMPACT OF FINANCIAL INFORMATION ON TESCO
Chapter 3: Research Methodology
3.1 Introduction
The research methodology has been constructed in order to create an idea about the
sort of data that would be used in this research paper and the procedure that would be used in
order to collect these kinds of data in an effective way. The description of the data is even
addressed in this section with the help of which the data analysis procedure can be initiated.
The choice of the methodology and the sort of data analysis is even explained in this section
of the paper in order to create an understanding of the analytical tools that would be used in
the next section during the process of data analysis.
3.2 Outline of the method
The process of outlining the methodology explains the direction and the actions,
which would be followed by the researcher in this paper so as the gather the materials and the
elements that are necessary in order to collect the data and understand which kind of data is
actually suitable for this topic. The statistical tools and techniques that would be used in this
paper is highlighted as well so that transparency is maintained and the readers have an idea
that the data gathered is true and fair. The methodology that has been selected for this paper
is based on the topic that is being examined (Sullivan and Gouldson 2016). The data
gathering procedure that is to be used by the researchers is properly outlined so that
knowledge and understanding of the same can be understood. The outline is constructed in
such a manner so that the results that would be obtained from this paper would be able to
explain the objectives that have been constructed in the earlier section.
3.3 Research Approach
The approach of the research is the most critical action of the paper for reaching the
desired and the real outcome of the paper. In this scenario, Wilson (2015) explained that the

24
IMPACT OF FINANCIAL INFORMATION ON TESCO
research approach assists the researcher to recognise every step for undertaking the
operations that have been desired from the research. The research approach is generally of
two kinds and they are inductive and deductive research approach. Moultrie and Livesey
(2014) stated that inductive approach aids the researchers in constructing new and innovative
theories and frameworks after the discovering the end result of the research. Battaglia et al.
(2015) on the other hand, has the intention of explaining that deductive approach concentrates
on assessing the theories and the structures that are already available that is associated to the
topic of the research thesis by taking assistance of the available data. However, in accordance
to this paper, the research would look to make use of the deductive approach as the paper
concentrates on assessing the financial impact faced by Tesco in the year 2014 and looks to
make a comparison of the financial scenario of Tesco with few of their rivals. The paper
would make use of the data that is already available and would even make use of the existing
models and theories in order to gain the accurate results and therefore this approach is
deemed appropriate.
3.4 Research Design
The “research design” assists researchers with the chance of guiding the research in
order to gain a distinct goal that is dependent on the objectives of the research. As explained
by Shaukat, Qiu and Trojanowski (2016), the design of the research aids the researcher in
providing the answers by restricting the desired outcome in which the existing section of the
overall research is undertaken in accordance to the goal that has been constructed. The
research design consists of three kinds and they are the exploratory research design,
explanatory research design and descriptive research design. The researcher generally
concentrates on the insights of the research issues. Therefore, in accordance to this research
paper, the researcher has looked to utilise the “descriptive research design” because of the
fact that this research design looks to explain all the variables and the financial data that is

25
IMPACT OF FINANCIAL INFORMATION ON TESCO
available for Tesco and the other companies. The explanation of the financial statements
would be fundamental in understanding the financial impact and accordingly the paper can be
concluded in a precise manner.
3.5 Data Collection Process
Data is computed and is looked upon as the demand in order to certify the attainment
rate of the research thesis, where the collection of the precise information that is dependent
on the characteristics of the paper and accordingly a result can be attained. Ding and Hou
(2015) cited that information can be segmented into “primary data” and “secondary data”.
The “primary data” is generally obtained from the selected participants who are selected and
thereafter their answers and responses are used as the key data in accordance to which the
analysis of the data could be undertaken. On the other hand, the secondary data is generally
collected by taking assistance of the financial statements and the annual report of the
companies that have been chosen and even from websites of the companies. This paper is
associated with creating an understanding of the financial performance Tesco and
undertaking a comparison with other competitive companies in order to create an
understanding of how the company has been performing in the economy. Therefore,
secondary data has been used in this paper because of the fact that in order to undertake the
process of empirical analysis of the data, the information that is available from the annual
report of the needs to be taken into consideration (Harjoto and Jo 2015). The company
websites have even been used so that any additional information that would be required for
the discovery of the results can be collected.
3.6 Data Analysis Plan
The assessment of the information is on the basis of the process that has been used in
order to assess the collected data. The paper has therefore undertaken quantitative data
analysis as the financial information that is collected for the companies have been converted

26
IMPACT OF FINANCIAL INFORMATION ON TESCO
into figures and these figures have been inserted in Microsoft Excel software and thereafter
the analytical tools are used in order to prepare the ratios and other relevant empirical results
with the help of which the overall outcome of the paper can be attained.
3.7 Ethical Consideration
It is seen that ethics plays an essential job in the minds of the researcher and the
reader and therefore the researcher has collected the data by taking assistance of authentic
and reliable sources so that the data that is used by the researcher is true and the results for
the researcher would be real. Hence, the ethics have been maintained by the researcher in this
paper (Nobes and Stadler 2015).

27
IMPACT OF FINANCIAL INFORMATION ON TESCO
Chapter 4: Data Analysis and Discussion
4.1 Introduction
The data evaluation process will be undertaken by taking assistance of the data that
has been collected and accordingly taking measures that would be useful for the completion
of the paper effectively. In order to have an understanding of the financial condition of Tesco
in the year 2014, it is essential to have an understanding of the financial scenario of the
previous years. The other mode of analysis would be undertaken by making a comparison of
Tesco with the other peer and competitive companies. The companies that would be taken
into consideration for the purpose of evaluation have been Sainsbury and Morrisons. This
would be helpful in ascertaining the actual financial scenario of Tesco in the year 2014 and
accordingly an idea can be attained in accordance to the effect of the scandal in the financial
scenario of Tesco in the year 2014.
4.2 Analysis of the data
The analysis of the information would be possible by taking assistance of the data that
is available from the annual report of Tesco and the other rival companies so that an
understanding of the financial scenario can be understood in an effective manner.
4.2.1 Probability Ratio
The profitability ratios of the three companies have been explained individually in
order to have a clear idea about the performance that is being performed by the companies
within the economy.

28
IMPACT OF FINANCIAL INFORMATION ON TESCO
Tesco
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Profit for the year A -40 138 -5741 974
Revenue B 55917 54433 62284 63557
Total Assets C 45853 43904 44214 50164
Total Equity D 6438 8626 7071 14715
Net Profit Margin E= A/B -0.07% 0.25% -9.22% 1.53%
Return on Equity (ROE) F=A/D -0.62% 1.60%
-
81.19
% 6.62%
Return on Assets G=A/C -0.09% 0.31%
-
12.98
% 1.94%
The results that have been obtained in accordance to the current, quick and the cash
ratios of Tesco has explained the fact that the company has not been functioning properly
well within the economy. All the ratios that have been are negative in the year 2010 and
thereby indicating that their financial performance has not been efficient.
Morrison
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Profit for the year A 305 222 -761 238
Revenue B 16317 16122 16816 17680
Total Assets C 9246 9299 9171 10729
Total Equity D 4063 3756 3594 4692
Net Profit Margin E= A/B 1.87% 1.38% -4.53% 1.35%
Return on Equity (ROE) F=A/D 7.51% 5.91%
-
21.17
% 5.07%
Return on Assets G=A/C 3.30% 2.39% -8.30% 2.22%
The profitability scenario of Morrison has been moderate in the year 2014 but faced a
fall in the year 2015. However, the company has recovered and currently have moderate

29
IMPACT OF FINANCIAL INFORMATION ON TESCO
profitability ratios and thereby indicating that the company has been making profits at a low
level.
Sainsbury
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Profit for the year A 377 471 -166 716
Revenue B 26224 23506 23775 23949
Total Assets C 19737 16973 16537 16540
Total Equity D 6872 6365 5539 6003
Net Profit Margin E= A/B 1.44% 2.00% -0.70% 2.99%
Return on Equity (ROE) F=A/D 5.49% 7.40% -3.00%
11.93
%
Return on Assets G=A/C 1.91% 2.77% -1.00% 4.33%
The results that have been obtained for Sainsbury has revealed that the company in
the current time period has been performing moderately as their profitability ratios are not
significantly high. The ratios have indicated that the company has been performing
moderately and has been making profits at a lower extent.
4.2.2 Liquidity ratios
Tesco
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Current Assets A 15417 14828 11958 15572
Current Liabilities B 19405 19714 19810 21399
Inventory C 2301 2430 2957 3576
Prepayments & Other Assets D 0 319 333 388
Cash & Cash equivalents E 3821 3082 2165 2506
Current Ratio F=A/B 0.79 0.75 0.60 0.73
Quick Ratio
G=(A-C-
D)/B 0.68 0.61 0.44 0.54
Cash Ratio H=E/B 0.20 0.16 0.11 0.12

30
IMPACT OF FINANCIAL INFORMATION ON TESCO
The liquidity scenario of Tesco has explained that the company has liquidity scenario
lower than 1 but the values have been close to 1 and thereby explaining that the company has
moderate level of liquidity.
Morrison
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Current Assets A 1176 1308 1144 1430
Current Liabilities B 2864 2747 2273 2873
Inventory C 614 616 658 852
Prepayments & Other Assets D 68 56 51 116
Cash & Cash equivalents E 317 488 241 261
Current Ratio F=A/B 0.41 0.48 0.50 0.50
Quick Ratio
G=(A-C-
D)/B 0.17 0.23 0.19 0.16
Cash Ratio H=E/B 0.11 0.18 0.11 0.09
The liquidity scenario of Morrison has been similar to Tesco as the values have been
lower than 1. The figures of Morrison have been lower than Tesco and the results indicate
that in case of liquidity the firm would face issues in order to pay off the liquidity.
Sainsbury
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Current Assets A 6312 4444 4421 4362
Current Liabilities B 8573 6724 6923 6765
Inventory C 614 616 658 852
Prepayments & Other Assets D 0 107 99 61
Cash & Cash equivalents E 1083 1143 1285 1592
Current Ratio F=A/B 0.74 0.66 0.64 0.64
Quick Ratio
G=(A-C-
D)/B 0.66 0.55 0.53 0.51
Cash Ratio H=E/B 0.13 0.17 0.19 0.24

31
IMPACT OF FINANCIAL INFORMATION ON TESCO
For Sainsbury, the liquidity scenario has been almost the same and thereby it is seen
that their ratios has been lower than 1. However, the values have been pretty much close to 1.
The outcome indicates that in case of paying off, the company would have liquidity scenario.
4.2.3 Financial Leverage Ratio
Tesco
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 45853 43904 44214 50164
Total Equity B 6438 8626 7071 14715
Total Liabilities C 39415 35278 37143 35449
Debt-to-Equity Ratio D=C/B 6.12 4.09 5.25 2.41
Debt Ratio E=C/A 0.86 0.80 0.84 0.71
Equity Ratio F=B/A 0.14 0.20 0.16 0.29
The financial leverage ratio of Tesco has indicated that the company has maintained a
sustainable debt to equity ratio, debt ratio and equity ratio. The values have not been
significantly good but the figures have been effective enough in maintaining sustainable
business for the company.
Morrison
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 9246 9299 9171 10729
Total Equity B 4063 3756 3594 4692
Total Liabilities C 5183 5543 5577 6037
Debt-to-Equity Ratio D=C/B 1.28 1.48 1.55 1.29
Debt Ratio E=C/A 0.56 0.60 0.61 0.56
Equity Ratio F=B/A 0.44 0.40 0.39 0.44

32
IMPACT OF FINANCIAL INFORMATION ON TESCO
The financial leverage ratio of Morrison has been not been very good as it is seen that
values have been lower than the idea figures of the ratios. Therefore, it can be said the
financial leverage ratio of the company has not been good and therefore measures need to be
taken with the help of which the ratios can be improved.
Sainsbury
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 19737 16973 16537 16540
Total Equity B 6872 6365 5539 6003
Total Liabilities C 12865 10608 10998 10537
Debt-to-Equity Ratio D=C/B 1.87 1.67 1.99 1.76
Debt Ratio E=C/A 0.65 0.62 0.67 0.64
Equity Ratio F=B/A 0.35 0.38 0.33 0.36
The leverage ratio for this company has been a bit better than the others who have
been taken into consideration as the debt-to-equity ratio of the company has been better. The
overall financial leverage ratio has highlighted that the even though the values are not good
but the results have been good enough in order to operate their business.
4.2.4 Efficiency Ratio
Tesco
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 45853 43904 44214 50164
Fixed Assets B 18108 17900 20440 24490
Revenue C 55917 54433 62284 63557
Trade & Other Receivables D 6284 5534 5910 8086
Total Asset Turnover Ratio E=C/A 1.22 1.24 1.41 1.27
Fixed Asset Turnover Ratio F=C/B 3.09 3.04 3.05 2.60
Receivables Turnover Ratio G=C/D 0.11 0.10 0.09 0.13

33
IMPACT OF FINANCIAL INFORMATION ON TESCO
The efficiency ratio of Tesco has explained that the values have been moderate and
the value has been decreasing indicating that the operating environment has improved for
total asset turnover. However, the there has been a rise in the receivables and fixed asset
turnover and therefore explains that they have not been effective even though rise is not very
steep.
Morrison
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 9246 9299 9171 10729
Fixed Assets B 7227 7161 7252 8625
Revenue C 16317 16122 16816 17680
Trade & Other Receivables D 177 148 194 201
Total Asset Turnover Ratio E=C/A 1.76 1.73 1.83 1.65
Fixed Asset Turnover Ratio F=C/B 2.26 2.25 2.32 2.05
Receivables Turnover Ratio G=C/D 0.01 0.01 0.01 0.01
The results that have been attained indicate the fact that the ratios have observed a bit
of fluctuations even though the values have not changed much. The figures indicate that the
values are moderate and therefore their operating environment is ideal in order to function
their business properly.
Sainsbury
Particulars` 2017 2016 2015 2014
$000 $000 $000 $000
Total Assets A 19737 16973 16537 16540
Fixed Assets B 10006 9764 9648 9880
Revenue C 26224 23506 23775 23949
Trade & Other Receivables D 3354 2178 2040 1704
Total Asset Turnover Ratio E=C/A 1.33 1.38 1.44 1.45
Fixed Asset Turnover Ratio F=C/B 2.62 2.41 2.46 2.42
Receivables Turnover Ratio G=C/D 0.13 0.09 0.09 0.07

34
IMPACT OF FINANCIAL INFORMATION ON TESCO
The efficiency ratio of Sainsbury explains that the company has been functioning
properly even though the values have not been that much better. The results that have been
uncovered reveal the fact that the turnover ratios are moderate and therefore their assets have
not been very much efficient.
4.2.5 Market Value Ratio
Tesco
Particulars` 2017 2016 2015 2014
Earnings per Share A 0.000 0.020 -0.71 0.12
Dividend per Share B 0.000 0.0000 0.11 0.15
Market Value per Share C 0.73 0.8 1.65 1.94
Dividend Payout Ratio D=B/A 0.00% 0.00%
-
15.49
%
125.00
%
Dividend Yield Rate E=B/C 0.00% 0.00% 6.67% 7.73%
Price-to-Earnings Ratio F=C/A 0.00 38.00 -2.32 16.17
The market value ratio for Tesco has been poor in the year 2017 as the company has
not provided dividend and therefore all the ratios have been 0. In the earlier years the
company has been able to provide certain amount but this year the company has been
incompetent to provide any.
Morrison
Particulars` 2017 2016 2015 2014
Earnings per Share A 0.650 0.470 -1.63 -0.51
Dividend per Share B 0.240 0.5600 0.61 0.57
Market Value per Share C 10.39 10.9 15.12 18.59
Dividend Payout Ratio D=B/A
36.92
%
119.15
%
-
37.42
%
-
111.76
%
Dividend Yield Rate E=B/C 2.31% 5.15% 4.03% 3.07%

35
IMPACT OF FINANCIAL INFORMATION ON TESCO
Price-to-Earnings Ratio F=C/A 15.98 23.15 -9.28 -36.45
The company has good market value ratio even though the values have reduced with
respect to the earlier years. However, the current rate is good enough for the company and
accordingly has been able to satisfy their investors as well.
Sainsbury
Particulars` 2017 2016 2015 2014
Earnings per Share A 0.170 0.230 -0.08 0.36
Dividend per Share B 0.120 0.1200 0.17 0.17
Market Value per Share C 2.74 3.0 2.87 3.02
Dividend Payout Ratio D=B/A
70.59
%
52.17
%
-
212.50
%
47.22
%
Dividend Yield Rate E=B/C 4.38% 4.04% 5.92% 5.63%
Price-to-Earnings Ratio F=C/A 16.12 12.91 -35.88 8.39
Sainsbury has indicated that their market ratio has been effective and the performing
very well and therefore the payout ratio as well as the yield rate has been high. The price to
earnings ratio has been better as well and thereby has been able to meet the desires of the
investors.
4.3 Discussion of the Analysis
In an overview of the ratios that have been assessed for Tesco Plc in accordance to
Morrison and Sainsbury indicates that the performance between the year 2014 and 2017 has
not been satisfactory when a comparison is made with the other organizations in the similar
industry. It is seen that online shopping of Tesco Plc has been developing slowly, but it still
stays to be a slight percentage of the overall profit particularly in the global market. It is seen
that, “Tesco Plc” has effective level of development and potentiality in the sector of online
shopping in countries like China and United Kingdom. Hence, in the coming future, Tesco

36
IMPACT OF FINANCIAL INFORMATION ON TESCO
should make sure to enhance their operational capability towards the online shopping items
and get ready for worldwide expansion of the online retail market. The three companies that
have been taken into consideration have not been functioning very well at the current time
period but out of the three on an overall comparison, it can be said that the Tesco has better
ratio figures than the others except for the market value ratio. There are room for
improvement and therefore the management should undertake actions and steps in order to
improve the financial as well as the operational activities of Tesco.

37
IMPACT OF FINANCIAL INFORMATION ON TESCO
Chapter 5: Conclusion, Recommendation, Future Work and Limitations
5.1 Conclusion
This research paper has been constructed in order to have an understanding of the
operational activities of Tesco Plc in accordance to the other companies in the same industry
in the year 2017. There has been an observation that the company has not been performing
well in the year 2017 with respect to their operational activities and the financial transactions
that have taken place. The main reason for the fall has been rise in competition ineffective
management strategies within the organization. There are numerous retail companies that are
operational all over the globe and in the market of UK; Tesco has been one of the essential
players who are functioning in the UK market for a longer period of time.
The background of the paper has looked to assess the market history and the
background of United Kingdom and there has been an observation that retail market has been
gaining demand with the introduction of new and innovative products and services. The
companies that are operational in the market have the intention of gaining competitive edge
and increasing their level of revenue. The paper has addressed the history and the background
of Tesco so that one an idea about the operational activities they have been performing in the
economy for very long time.
The paper has even framed a problem statement so that the issues that are pertinent
with the operational activities of Tesco can be understood. The paper has identified that there
have been several internal flaws existent within the management of the company and these
have been the factors that have led to the financial and economic downfall of the company.
The paper has even created research objectives and goals for the paper have been to
reach the research objectives. The results that have been obtained would look to address

38
IMPACT OF FINANCIAL INFORMATION ON TESCO
whether the objectives have been attained or not. Therefore, the paper would look to ascertain
whether the results that have been attained are in line with the research objectives or not.
5.1.1 Addressing the research objectives
The initial goal of the paper has been to evaluate the financial performance of Tesco
in accordance to the overall business performance of the company. The results that have been
collected indicated that the financial performance of the company has not been significantly
good and therefore the overall business performance of the company has not been effective
either. There are observations that in certain line of business that are undertaken by Tesco, it
is seen that the company has been doing well and thereby has been able to generate profit out
of it.
The next objective of the paper has been to understand whether a detailed suggestion
has been provided to the stakeholders of Tesco Plc with respect to what have been their faults
and what changes can they implement thereby improving the business activities. The end
results that have been obtained by taking assistance of the financial ratios have indicated that
the research has been able to provide detailed insight within the company and have explained
that faults and the mistakes that are existent within the company and has been able to provide
suggestions to the stakeholders in order to reduce their level of operations.
The third and the last objective of the paper have been to synthesize the business and
the financial performance to the effective application of the business strategies of Tesco so
that long term competitive edge can be maintained. The results that have been attained in this
paper have explained that in the year 2017 the company has been incompetent in making
developments because of several factors and thereafter a comparison with the previous years
have been undertaken in order to provide an effective idea about the changes that have taken
place in the year 2017 with respect to their financial and business performance. The paper

39
IMPACT OF FINANCIAL INFORMATION ON TESCO
with the assistance of several financial variables have been able to provide opinions and
suggestions with the help of which the company would be able to function their business in
the longer run and accordingly make profits even in the long run in order to create
competitive edge and make profits that would be ideal for them.
The assessment of the results that have been obtained and comparing the same with
the research aims and objectives have been able to justify the fact that this paper has been
successful in addressing the objectives and therefore the results that have been obtained are
true and authentic and would therefore be useful in making business decisions in the coming
years.
The paper has undertaken an in-depth assessment of the various financial ratios by
collecting the data from the annual report of Tesco for the years 2014 to 2017. The results
that have been obtained explains the fact that the company has been functioning moderately
in the years 2014 to 2017 and in these years the company has been generating moderate level
of profit. The results have explained that Tesco has not been performing in an effective
manner and their performance has been similar to what has been performed by Sainsbury and
Morrison, even though in certain cases Tesco’s performance has been better. The online
shopping sector of Tesco has been developing at a slow pace even though the revenue that is
generated from this sector forms a small part of the overall business profit. Hence, it can be
concluded that the financial scandal that took place in the year 2014 had a key level of effect
on the financial as well as the business performance of Tesco Plc even though the company is
looking to recover from that event and is recovering slowly.
5.2 Recommendation
The recommendations that have been constructed are in accordance to the results that
have been attained from the process of data analysis. As explained earlier, the company has

40
IMPACT OF FINANCIAL INFORMATION ON TESCO
faced massive losses because of the financial scandal that occurred in the year 2014 and
therefore it is recommended that a change in the management personnel should be undertaken
by discovering the personnel who are corrupt and had a key impact on the business.
It is even recommended that the management should establish plans and polices with
the help of which Tesco would have a transparent and a better business strategies and policies
so that no such frauds and scandals can occur in the near future.
It is even recommended that the management undertakes an extensive monitoring of
all the business activities that are existent within the business on a frequent basis in order to
have an effective hold on the functional activities and thereby establish a better business
environment.
It is even recommended that the company should create a better and effective
relationship among the management and their employees so that a better business workplace
can be created and decisions and opinions can be conveyed in an effective manner to the top
level management and even to the bottom level management.
The management should even look to assess the market and the external factors so
that the changes that are taking place within the economy with the advent of time can be
understood in a proper manner and thereby the company would be in line with the changes in
the market and thereby make additional changes within their organization as well. The
incorporation of these recommendations can be helpful in the growth of Tesco Plc and
thereby would be able to preserve their earlier level of profitability and operate their business
in accordance to the changing market condition.

41
IMPACT OF FINANCIAL INFORMATION ON TESCO
5.3 Future Work
There are several chances of future work in accordance to business and monetary
performance of “Tesco Plc” as the company is still operational and there will be various
changes that would be taking place with the advent of time. The future work on this topic
would be helpful in determining and undertaking a comparison with the current financial
performance of Tesco and the performance the company would be making at a future course
of time. The changes would be helpful in determining how the changes in the strategies have
been helpful and in that manner idea can be attained as to how to whether the company has
been able to improve their business performance.
5.4 Limitations
The limitations refer to the restrictions that have taken place and accordingly have
slowed the function of the researcher. The limitation of time and the data authenticity with
respect to the information that has been gathered from various resources is even an essential
issue. In case, the information is not valid, it would lead to results that would not be desirable
to the researchers.

42
IMPACT OF FINANCIAL INFORMATION ON TESCO
Reference List
About.sainsburys.co.uk. (2018). Welcome to Sainsburys Home. [online] Available at:
https://www.about.sainsburys.co.uk [Accessed 20 May. 2018].
Adomako, S., Danso, A. and Ofori Damoah, J., 2016. The moderating influence of financial
literacy on the relationship between access to finance and firm growth in Ghana. Venture
Capital, 18(1), pp.43-61.
Aguirre, E., Mahr, D., Grewal, D., de Ruyter, K. and Wetzels, M., 2015. Unraveling the
personalization paradox: The effect of information collection and trust-building strategies on
online advertisement effectiveness. Journal of Retailing, 91(1), pp.34-49.
Alves, P. and Francisco, P., 2015. The impact of institutional environment on the capital
structure of firms during recent financial crises. The Quarterly Review of Economics and
Finance, 57, pp.129-146.
Arun, T.G., Almahrog, Y.E. and Aribi, Z.A., 2015. Female directors and earnings
management: Evidence from UK companies. International Review of Financial Analysis, 39,
pp.137-146.
Assaf, A.G., Josiassen, A., Cvelbar, L.K. and Woo, L., 2015. The effects of customer voice
on hotel performance. International Journal of Hospitality Management, 44, pp.77-83.
Aykol, B. and Leonidou, L.C., 2015. Researching the green practices of smaller service
firms: A theoretical, methodological, and empirical assessment. Journal of Small Business
Management, 53(4), pp.1264-1288.
Battaglia, M., Bianchi, L., Frey, M. and Passetti, E., 2015. Sustainability reporting and
corporate identity: action research evidence in an Italian retailing cooperative. Business
Ethics: A European Review, 24(1), pp.52-72.

43
IMPACT OF FINANCIAL INFORMATION ON TESCO
Birkey, R., Michelon, G., Patten, D.M. and Sankara, J., 2016. Does assurance on CSR
reporting enhance environmental reputation? An examination in the US context.
Cao, L. and Li, L., 2015. The impact of cross-channel integration on retailers’ sales
growth. Journal of Retailing, 91(2), pp.198-216.
Caritte, V., Acha, S. and Shah, N., 2015. Enhancing corporate environmental performance
through reporting and roadmaps. Business Strategy and the Environment, 24(5), pp.289-308.
Chen, X., Wang, X. and Jiang, X., 2016. The impact of power structure on the retail service
supply chain with an O2O mixed channel. Journal of the Operational Research
Society, 67(2), pp.294-301.
Cho, C.H., Michelon, G., Patten, D.M. and Roberts, R.W., 2015. CSR disclosure: the more
things change…?. Accounting, Auditing & Accountability Journal, 28(1), pp.14-35.
Ding, R. and Hou, W., 2015. Retail investor attention and stock liquidity. Journal of
International Financial Markets, Institutions and Money, 37, pp.12-26.
Eccles, R.G., Krzus, M.P. and Ribot, S., 2015. Models of best practice in integrated reporting
2015. Journal of Applied Corporate Finance, 27(2), pp.103-115.
Fornell, C., Morgeson III, F.V. and Hult, G.T.M., 2016. Stock returns on customer
satisfaction do beat the market: gauging the effect of a marketing intangible. Journal of
Marketing, 80(5), pp.92-107.
Fraser, S., Bhaumik, S.K. and Wright, M., 2015. What do we know about entrepreneurial
finance and its relationship with growth?. International Small Business Journal, 33(1), pp.70-
88.

44
IMPACT OF FINANCIAL INFORMATION ON TESCO
Graves, C. and Shan, Y.G., 2014. An empirical analysis of the effect of internationalization
on the performance of unlisted family and nonfamily firms in Australia. Family Business
Review, 27(2), pp.142-160.
Guariglia, A., Spaliara, M.E. and Tsoukas, S., 2016. To what extent does the interest burden
affect firm survival? Evidence from a panel of UK firms during the recent financial
crisis. Oxford Bulletin of Economics and Statistics, 78(4), pp.576-594.
Hahn, P.D. and Lasfer, M., 2016. Impact of foreign directors on board meeting
frequency. International review of financial analysis, 46, pp.295-308.
Harjoto, M.A. and Jo, H., 2015. Legal vs. normative CSR: Differential impact on analyst
dispersion, stock return volatility, cost of capital, and firm value. Journal of Business
Ethics, 128(1), pp.1-20.
Jacobs, B.W. and Singhal, V.R., 2017. The effect of the Rana Plaza disaster on shareholder
wealth of retailers: Implications for sourcing strategies and supply chain governance. Journal
of Operations Management, 49, pp.52-66.
Jones, P., Comfort, D. and Hillier, D., 2016. Materiality in corporate sustainability reporting
within UK retailing. Journal of Public Affairs, 16(1), pp.81-90.
Maglaras, G., Bourlakis, M. and Fotopoulos, C., 2015. Power-imbalanced relationships in the
dyadic food chain: An empirical investigation of retailers' commercial practices with
suppliers. Industrial Marketing Management, 48, pp.187-201.
Mason, C.M. and Harrison, R.T., 2015. Business angel investment activity in the financial
crisis: UK evidence and policy implications. Environment and Planning C: Government and
Policy, 33(1), pp.43-60.

45
IMPACT OF FINANCIAL INFORMATION ON TESCO
Michelon, G., Pilonato, S. and Ricceri, F., 2015. CSR reporting practices and the quality of
disclosure: An empirical analysis. Critical Perspectives on Accounting, 33, pp.59-78.
Morrisons-corporate.com. (2018). Corporate - Morrisons. [online] Available at:
https://www.morrisons-corporate.com [Accessed 14 Apr. 2018].
Moultrie, J. and Livesey, F., 2014. Measuring design investment in firms: Conceptual
foundations and exploratory UK survey. Research Policy, 43(3), pp.570-587.
Nobes, C.W. and Stadler, C., 2015. The qualitative characteristics of financial information,
and managers’ accounting decisions: evidence from IFRS policy changes. Accounting and
Business Research, 45(5), pp.572-601.
Ortas, E., Gallego‐Alvarez, I. and Álvarez Etxeberria, I., 2015. Financial factors influencing
the quality of corporate social responsibility and environmental management disclosure: A
quantile regression approach. Corporate Social Responsibility and Environmental
Management, 22(6), pp.362-380.
Panwar, R., Nybakk, E., Hansen, E. and Pinkse, J., 2017. Does the business case matter? The
effect of a perceived business case on small firms’ social engagement. Journal of Business
Ethics, 144(3), pp.597-608.
Patten, D.M. and Zhao, N., 2014, June. Standalone CSR reporting by US retail companies.
In Accounting Forum (Vol. 38, No. 2, pp. 132-144). Elsevier.
Peric, M. and Vitezic, V., 2016. Impact of global economic crisis on firm growth. Small
Business Economics, 46(1), pp.1-12.

46
IMPACT OF FINANCIAL INFORMATION ON TESCO
Platonova, E., Asutay, M., Dixon, R. and Mohammad, S., 2016. The impact of corporate
social responsibility disclosure on financial performance: Evidence from the GCC Islamic
Banking Sector. Journal of Business Ethics, pp.1-21.
Pucheta‐Martínez, M.C. and García‐Meca, E., 2014. Institutional investors on boards and
audit committees and their effects on financial reporting quality. Corporate Governance: An
International Review, 22(4), pp.347-363.
Qian, W. and Xing, K., 2018. Linking environmental and financial performance for privately
owned firms: some evidence from Australia. Journal of Small Business Management, 56(2),
pp.330-347.
Rainey, H.J., Pollard, E.H., Dutson, G., Ekstrom, J.M., Livingstone, S.R., Temple, H.J. and
Pilgrim, J.D., 2015. A review of corporate goals of No Net Loss and Net Positive Impact on
biodiversity. Oryx, 49(2), pp.232-238.
Ramanathan, U., Bentley, Y. and Pang, G., 2014. The role of collaboration in the UK green
supply chains: an exploratory study of the perspectives of suppliers, logistics and
retailers. Journal of Cleaner Production, 70, pp.231-241.
Scarborough, P., Matthews, A., Eyles, H., Kaur, A., Hodgkins, C., Raats, M.M. and Rayner,
M., 2015. Reds are more important than greens: how UK supermarket shoppers use the
different information on a traffic light nutrition label in a choice experiment. International
Journal of Behavioral Nutrition and Physical Activity, 12(1), p.151.
Schramm-Klein, H., Morschett, D. and Swoboda, B., 2015. Retailer corporate social
responsibility: Shedding light on CSR’s impact on profit of intermediaries in marketing
channels. International Journal of Retail & Distribution Management, 43(4/5), pp.403-431.

47
IMPACT OF FINANCIAL INFORMATION ON TESCO
See-To, E.W. and Ho, K.K., 2016. A study on the impact of design attributes on E-payment
service utility. Information & Management, 53(5), pp.668-681.
Shaukat, A., Qiu, Y. and Trojanowski, G., 2016. Board attributes, corporate social
responsibility strategy, and corporate environmental and social performance. Journal of
Business Ethics, 135(3), pp.569-585.
Shin, S. and Eksioglu, B., 2015. An empirical study of RFID productivity in the US retail
supply chain. International Journal of Production Economics, 163, pp.89-96.
Sikka, P., 2015, March. The corrosive effects of neoliberalism on the UK financial crises and
auditing practices: A dead-end for reforms. In Accounting Forum (Vol. 39, No. 1, pp. 1-18).
Elsevier.
Sullivan, R. and Gouldson, A., 2016. Comparing the climate change actions, targets and
performance of UK and US retailers. Corporate Social Responsibility and Environmental
Management, 23(3), pp.129-139.
Tesco plc. (2018). Tesco PLC. [online] Available at: https://www.tescoplc.com [Accessed 14
Apr. 2018].
Thakur, R. and Srivastava, M., 2015. A study on the impact of consumer risk perception and
innovativeness on online shopping in India. International Journal of Retail & Distribution
Management, 43(2), pp.148-166.
Tjärnemo, H. and Södahl, L., 2015. Swedish food retailers promoting climate smarter food
choices—Trapped between visions and reality?. Journal of retailing and consumer
services, 24, pp.130-139.

48
IMPACT OF FINANCIAL INFORMATION ON TESCO
Towery, E.M., 2017. Unintended consequences of linking tax return disclosures to financial
reporting for income taxes: Evidence from Schedule UTP. The Accounting Review, 92(5),
pp.201-226.
Usman, A.B. and Amran, N.A.B., 2015. Corporate social responsibility practice and
corporate financial performance: evidence from Nigeria companies. Social Responsibility
Journal, 11(4), pp.749-763.
Wilson, J.P., 2015. The triple bottom line: Undertaking an economic, social, and
environmental retail sustainability strategy. International Journal of Retail & Distribution
Management, 43(4/5), pp.432-447.
Wong, K. and Joshi, M., 2015. The impact of lease capitalisation on financial statements and
key ratios: Evidence from Australia. Australasian Accounting Business & Finance
Journal, 9(3), p.27.
Yazdanfar, D. and Öhman, P., 2014. The impact of cash conversion cycle on firm
profitability: An empirical study based on Swedish data. International Journal of Managerial
Finance, 10(4), pp.442-452.
Yu, W., Ramanathan, R. and Nath, P., 2014. The impacts of marketing and operations
capabilities on financial performance in the UK retail sector: A resource-based
perspective. Industrial Marketing Management, 43(1), pp.25-31.

49
IMPACT OF FINANCIAL INFORMATION ON TESCO
Bibliography
Afrifa, G.A., 2016. Net working capital, cash flow and performance of UK SMEs. Review of
Accounting and Finance, 15(1), pp.21-44.
Akamah, H., Hope, O.K. and Thomas, W.B., 2018. Tax havens and disclosure
aggregation. Journal of International Business Studies, 49(1), pp.49-69.
An, Y., Davey, H., Eggleton, I.R. and Wang, Z., 2015. Intellectual capital disclosure and the
information gap: Evidence from China. Advances in Accounting, 31(2), pp.179-187.
Benedettini, O., Neely, A. and Swink, M., 2015. Why do servitized firms fail? A risk-based
explanation. International Journal of Operations & Production Management, 35(6), pp.946-
979.
Bertrand, J.L., Brusset, X. and Fortin, M., 2015. Assessing and hedging the cost of
unseasonal weather: Case of the apparel sector. European Journal of Operational
Research, 244(1), pp.261-276.
Camacho‐Miñano, M.D.M., Segovia‐Vargas, M.J. and Pascual‐Ezama, D., 2015. Which
characteristics predict the survival of insolvent firms? An SME reorganization prediction
model. Journal of Small Business Management, 53(2), pp.340-354.
Charlo, M.J., Moya, I. and Muñoz, A.M., 2015. Sustainable development and corporate
financial performance: a study based on the FTSE4Good IBEX Index. Business Strategy and
the Environment, 24(4), pp.277-288.
Du Preez, R. and Bendixen, M.T., 2015. The impact of internal brand management on
employee job satisfaction, brand commitment and intention to stay. International Journal of
Bank Marketing, 33(1), pp.78-91.

50
IMPACT OF FINANCIAL INFORMATION ON TESCO
Du, X. and Lai, S., 2018. Financial distress, investment opportunity, and the contagion effect
of low audit quality: Evidence from china. Journal of Business Ethics, 147(3), pp.565-593.
Elbeltagi, I. and Agag, G., 2016. E-retailing ethics and its impact on customer satisfaction
and repurchase intention: a cultural and commitment-trust theory perspective. Internet
Research, 26(1), pp.288-310.
Feijóo, C., Gómez-Barroso, J.L. and Voigt, P., 2014. Exploring the economic value of
personal information from firms’ financial statements. International Journal of Information
Management, 34(2), pp.248-256.
Ferrando, A. and Mulier, K., 2015. Firms’ financing constraints: Do perceptions match the
actual situation?. The Economic and Social Review, 46(1, Spring), pp.87-117.
Filatotchev, I. and Dotsenko, O., 2015. Shareholder activism in the UK: types of activists,
forms of activism, and their impact on a target’s performance. Journal of Management &
Governance, 19(1), pp.5-24.
Gallego-Álvarez, I. and Quina-Custodio, I.A., 2016. Disclosure of corporate social
responsibility information and explanatory factors. Online Information Review, 40(2),
pp.218-238.
Gatzert, N., 2015. The impact of corporate reputation and reputation damaging events on
financial performance: Empirical evidence from the literature. European Management
Journal, 33(6), pp.485-499.
Goh, L. and Gupta, A., 2016. Remuneration of non-executive directors: Evidence from the
UK. The British Accounting Review, 48(3), pp.379-399.

51
IMPACT OF FINANCIAL INFORMATION ON TESCO
Goodridge, P., Haskel, J. and Wallis, G., 2017. Spillovers from R&D and other intangible
investment: evidence from UK industries. Review of Income and Wealth, 63(s1).
Grimmer, L., Miles, M.P. and Grimmer, M., 2015. A research note on the effect of
entrepreneurial orientation on small retailer performance: a resource-advantage
perspective. International Entrepreneurship and Management Journal, 11(2), pp.409-424.
Gupta, J., Wilson, N., Gregoriou, A. and Healy, J., 2014. The effect of internationalisation on
modelling credit risk for SMEs: Evidence from UK market. Journal of International
Financial Markets, Institutions and Money, 31, pp.397-413.
Hunt, V., Layton, D. and Prince, S., 2015. Diversity matters. McKinsey & Company, 1,
pp.15-29.
Jayasinghe, M., 2016. The operational and signaling benefits of voluntary labor code
adoption: Reconceptualizing the scope of human resource management in emerging
economies. Academy of Management Journal, 59(2), pp.658-677.
Jones, P., Hillier, D. and Comfort, D., 2014. Assurance of the leading UK food retailers'
corporate social responsibility/sustainability reports. Corporate Governance, 14(1), pp.130-
138.
Lepper, J., Shabani, M., Toporowski, J. and Tyson, J., 2016. Monetary adjustment and
inflation of financial claims in the UK after 1980. Financialization and the Financial and
Economic Crises: Country Studies, pp.68-88.
Lin, H.L. and Yen, A.R., 2016. The effects of IFRS experience on audit fees for listed
companies in China. Asian Review of Accounting, 24(1), pp.43-68.

52
IMPACT OF FINANCIAL INFORMATION ON TESCO
van Duuren, E., Plantinga, A. and Scholtens, B., 2016. ESG integration and the investment
management process: Fundamental investing reinvented. Journal of Business Ethics, 138(3),
pp.525-533.
Venkatesh, V.G., Rathi, S. and Patwa, S., 2015. Analysis on supply chain risks in Indian
apparel retail chains and proposal of risk prioritization model using Interpretive structural
modeling. Journal of Retailing and Consumer Services, 26, pp.153-167.
Young, W., Russell, S.V., Robinson, C.A. and Barkemeyer, R., 2017. Can social media be a
tool for reducing consumers’ food waste? A behaviour change experiment by a UK
retailer. Resources, Conservation and Recycling, 117, pp.195-203.