Financial Performance Management of Tesco and Walmart Analysis Report

This report provides a comprehensive analysis of financial performance management, focusing on the application of financial ratios to assess the financial health of companies, including Walmart and Tesco. The report calculates and interprets various financial ratios, such as liquidity, solvency, and profitability ratios, to evaluate the companies' financial positions. It further explores the Balanced Scorecard as a strategic management system, evaluating its application and proposing a Balanced Scorecard for the analyzed companies. Additionally, the report examines the benefits and challenges associated with adopting integrated reporting, emphasizing its role in providing a comprehensive view of organizational performance. The report uses the case studies of Tesco and Walmart to illustrate these concepts and provides insights into their financial strategies and performance.

Financial Performance
Management

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................4
1. Calculate ratios and measure the financial performance of the business................................4
2. Evaluate Balanced scorecard and Prepare proposed Balanced Scorecard of the company as a
Strategic Management System....................................................................................................8
3. Benefits and Challenges in adopting Integrated Reporting based of the organisation..........12
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Financial performance management helps in measuring the performance by using various
financial measure in the working of the organisation. It is also known as corporate performance
management. The foremost objective of the financial performance is to compile the actual
performance with the forecasted performance of the business and to make adjustment
accordingly. Currency performance in a broader sense implies how much of the currency target
is being or has been achieved, and is an important part of the board currency risk. This is the
most common way of estimating the consequences of a company's strategy and mission in
money-related terms. It is used to quantify a company's overall financial health over a given time
frame, and equally can be used to view comparable companies in similar industries or to analyse
businesses or fields of collection. Monetary Executive Check remembers surveys and
translations of financial summaries for a complete picture of a business's productivity and
monetary adequacy. It is the capabilities of the management to assist the performance of the
business which indicates the plans forecast and also handles the reporting and increasing the
financial acquisition and efficiency companywide (Aguiar-Diaz and et.al., 2020). In the
following report it calculates the financial position of the corporate and determining the
outcomes. In the other part it states the scorecard of the both the companies Tesco and Walmart.
In the last part it states about the Integrated reporting of the company by critically evaluating the
benefits and challenges occurred by the organisation.

MAIN BODY
1. Calculate ratios and measure the financial performance of the business.

Interpretation:
From the above calculated ratio it can be seen that the average inventory states that the
inventory that the turnover days of the 46 Days for the Walmart and for the Tesco it is 97 days
which is more than the double of the Walmart. Liquidity of the firm denotes the company’s
liquid position which states that the companies paying capacity of paying short term liabilities.
Current ratio of Walmart States the Company’s current ratio is 1.17 which is more than the
current liabilities of company. It suggests that the company has significant resources in paying of
its Current obligations. On the other hand, Tesco has liquidity ratio closer which suggest that the
company is being able to meet its current liabilities but it would be difficult for the company if
its current obligation would have increased.
Solvency ratio states the sources of finance used by the firm in order to finance its
business activities. Walmart ’s debt equity ratio is 0.02 which means that the company is using
more of equity as compared to debt. In case of Tesco it is using half of its sources of finance as
debt and more share is of Equity.

Profitability ratio of the company states the share of profits earned by the company from
its revenue of the company. Tesco earns a profit of 5.33% from the yearly sales of the company.
On the other side Walmart is earning a gross profit margin of 2.57 from the annual sales of the
company. Operating profit ratio states, the amount of earning of the firm which is earned by the
operations of the company. Return on capital employed is the return earned by the company by
using its assets of the company. Price earnings ratio states the amount earned by the company in
terms of shareholders. The shareholders are the owners of the company whom invest their funds
in order to know the actual returns from the amount invested by the shareholders in the company.
The returns earned by the shareholders of Tesco has earned more than the shareholders of
Walmart (Bazzoli, G.J., 2021).
2. Evaluate Balanced scorecard and Prepare proposed Balanced Scorecard of the company as a
Strategic Management System.
Balance Scorecard is an important and primary tool designed by Kaplan and Norton for
estimating performance. The adjusted scorecard and its four 4 points of view contribute to the
critical preparation and execution of the management board. The business or management
utilizes the Balanced Scorecard strategy to measure the efficiency, execution and ability of each
representative and select the exhibition exam. The Balanced Scorecard helps drive monetary and
non-monetary results, showing exhibits and key results.
The Balanced Scorecard plays an important and fundamental role in the basic preparation
and execution of the board. The Balanced Scorecard is often used and it is the main ten
management device used by different associations to measure the performance of global boards.
Kaplan and Norton's balanced scorecard model was created in the mid-1990s to help companies
estimate business performance using monetary and non-monetary information (Beretta,
Demartini and Trucco, 2020).
The Balanced Scorecard is a planned way to deal with the execution of research business
systems and how changes are made within the area, such as - money related goals and objectives,
customer tendencies and choice plans, board assignments and creating network bottleneck goals,
and The Cooperative Learning Ability and Limits Building Balanced Scorecard is a key
resource-focused assessment tool. Tesco's trailblazers can use the key tool of the Balanced
Scorecard to build financial gains by better grasping the links between currency-related

resources, inward cycles, customer tendencies and board assignments within Tesco's
conventional approach.
According to Robert S. Kaplan and David P. Norton, 85% of leadership teams spend less
than an hour a month talking about systems, and 50% declare that they spend little or no effort in
technical conversations.
The adjusted scorecard helps Tesco interpret, communicate and measure its technology.
Some of the queries responded to by Tesco's Balanced Scorecard analysis in emerging markets
were -
The Balanced Scorecard focuses on "aligning business activities with the vision and
technology of the business, communicating internally and externally, and screening business
execution against key objectives".
 No single measure can provide a broad picture of an association's well-being.
 So, instead of using individual measures, why not use a comprehensive scorecard that
includes various measures (Boyd and Kannan, 2018).
 Kaplan and Norton envisioned a system from four perspectives—currency, customer,
internal, and learning and development.
 Associations should choose basic measures for each of these views.
Benefits of Balance Scorecard:
 It helps to estimate monetary and non-monetary sources of information and results.
 BSC is very efficient in estimation execution.
 It helps to make the necessary preparation better
 It provides a powerful structure for building communication systems
 A decent scorecard helps an organization better align its hierarchy.
 It also helps to differentiate between different issue focuses/defects where improvements
are expected to achieve improved results (Buzgurescu and Elena, 2020).
The four 4 points of Kaplan and Norton's Balanced Scorecard assumptions provide a broad
and clear picture of what needs to be quickly considered and where and how organizations
choose to execute. These points and perspectives can be made clear individually:
The financial perspectives of Balanced Scorecard
 Profit and loss margin
 Company’s turnover

 Working capital of organisation
 Fixed cost, other cost and variable cost
 Investment capital
 Market share
 Annual growth of revenue
 Gross and Net profit
Customer Perspective- Parameters taken by the business are:
 Product offering and service offering
 Providing customer services
 Providing customer services
Internal Business Perspective - The focus areas are:
 Operations Management Process
 Innovation Process
 Customer Relationship Process
 Regulatory & Environmental Process
Learning and growth perspective - broken into following components
 The Human capital
 The Information capital
 The Organizational capital

The greatest advantage of the Tesco Balanced Scorecard approach in growing a business is
that it provides senior executives and trailblazers with a framework they can use to develop
broad innovations rather than simply upgrading a business. A fair scorecard allows controllers to
view the business from four unique perspectives.
In addition, people with lower affiliation are fundamentally assessed by non-money-related
measures, so the Balanced Scorecard approach provides a fair framework to recall their overall
strategy of efforts and teach them how their efforts work on a day-to-day basis Technology and
Tesco results to expand (de Castro Sobrosa Neto and et.al., 2020).
To make it easier to examine a good scorecard and how it works, the case of Walmart is
used as a strong association that has been active for a long time. Wal-Mart Stores Inc. is
probably the best and most visible single retailer on the planet. What makes it all the more
bizarre and clear is that it's buried in extensive discussions, including the record of cases against
it, the media shock at its technology, and the government evaluating parts of its strategy in
discrete conversations.
The Group began under strange conditions in 1945, when two relatives (Sam Walton and
his relatives) opened Ben Franklin's Classified Advertising Company, the party quickly became
famous, and was financially rich. easy to detect. Its record speaks volumes about the
association's solidarity and passion for business.
To date, the organization has more than 4,150 retail offices worldwide and is a major
retailer in Canada, the United Kingdom and Mexico.
It is also in the active pharmaceutical business, photo processing business and tire and
lubricant courier business. The organizers behind the organization, until today the three
systematic goals of the organization's work, these are; "excellent assistance to the buyer, respect
for the individuals working within the organization and their clients, and consistent pursuit of
excellence". Its business management techniques are to sell the best products and brands at the
lowest cost imaginable. It is this technique that, with minimal brand name and project fees, has
opened organizations to constant analysis and claims as it leverages measures to understand
sometimes controversial procedures (Dimitropoulos and Scafarto, 2021).

3. Benefits and Challenges in adopting Integrated Reporting based of the organisation.
The combined reveal is a compact correspondence of the management system, execution
and possibilities of an element related to the external climate, which prompted the development
of measures for monetary and non-monetary values during this period.
Corporate apocalypse underpins the convincing operation of a market economy, enabling
financial backers and monetary donors to explore how businesses behave from every angle,
demonstrate their value and exercise robust oversight. For a private organization to be truly
successful, our corporate exposure system should be essentially as solid as the cash business
field itself. More critically, it generally accepts the true ability of those who schedule the reports
to see them.
On the other hand, organizational details are attached to the annual report, showing and
revealing the recorded connections to everyone. Individuals whose organizations provide
accounts are banks, financial supporters, and contributing organizations. While the fundamental
focus of organizational enumeration is monetary information, it equally supports planned
responses (Donatella, 2020).
 Intellectual Capital: It includes software system, knowledge, intellectual property, etc.
 Human capital: People’s competency, capabilities, skills and experience of the human
capital.
 Financial Capital: It is the mix that company utilises the equity and debt or generating
profits from the operations of the company.
 Natural Capital: Renewable and non- renewable and incorporates the environmental
resource.
 Social and relationship: it is the relationship of the company with its suppliers,
stakeholders and other communities.
Benefits of Integrated Reporting
 It helps in understanding the goals and strategy of the organisation to attain the goals of
the organisation.
 It promotes the culture which is integrated by the way of thinking.
 It helps in linking between the business growth and the non- financial performance of the
business.