Financial Analysis Report: Analysis of Apple and Tesco's Finances

This report offers a comprehensive financial analysis, dissecting the financial performance of Apple and Tesco. It begins with an introduction to business economic thought, exploring how strategies and policies impact company performance, using Apple as a case study. The report then delves into investment appraisal techniques, financial development, and capital budgeting. Part 3 presents a detailed financial analysis of Tesco plc, including liquidity and profitability ratios over a five-year period, and a comparison with Morrison plc. The analysis covers various financial aspects, providing insights into the companies' market positions and financial health, highlighting their strengths and weaknesses. The report concludes with a synthesis of the findings, emphasizing the impact of strategic planning and external factors on financial outcomes.

RUNNING HEAD: Accounting and Financial analysis 1
Report: Financial analysis

Accounting and Financial analysis 2
Table of Contents
Part-1 3
Introduction 3
Question -1 (a) 3
Question-1 (b) 4
Answer to question- 1(c) 4
Conclusion 5
Part-2 6
Introduction 6
Financial Development: 6
Conclusion 7
Part-3 8
Introduction 8
Question no.-1 8
Tesco plc’s financial analysis 8
Question-2 14
Question-3 14
Conclusion 15
References 16

Accounting and Financial analysis 3
Part-1
Introduction
This business report describes about the business economic thought which has been
deliberated and has been investigated that how these perception could be exploited to make
the major changes into the business by implementing many new strategies and policies. This
report has been prepared to study over the Apple plc. Apple plc has implemented many
policy & strategies which are correlated with the government, state’s economy and
delivering situation. Apple public limited company offers the best commendable and
qualitative services and products to its clients in the global marketplace to operate with a
position to enlarge its sales turnover. Additionally, this business report describes about the
strategies, policies and political plans etc which is occupied into prudence for dominant the
political and accounting flow in a fastidious economic place.
Question -1 (a)
It has been found that a company is correlated with a lot of complicated activities
always. These activities take place at the time of performing the functions and strategies to
achieve the objectives and goals. It is a common saying that every profitable organization
has a main motto to enhance the profits and achieve the goals of the company (Brigham, and
Ehrhardt, 2013).
Apple is a global company which has its operation in almost entire world. It is
primarily situated at California. This company deal with many electrical items such as
mobile phones, laptops etc with its clients through its online and offline stores. The main
completive pros of apple plc are its best product in terms of quality and the technology used
by it in its products is also a pros for the company. By conducting an analysis over the
industry, it has been established that a gigantic investment is essential for a firm to enter into
electrical industry as the new firm would be required high technology and high professional
engineers (Fernandes and Netemeyer, 2014). So it has been found that it is quite easy for
Apple plc to supervise the economical advantage. Apple has upgraded its invention timely
and it has also launched a lot of high tech products and services in the market. Additionally,
this company only focuses over its premium clients and it collisions over the financial scale
of the corporation. For an instance, apple plc’s products like I phone and Mac Book has been

Accounting and Financial analysis 4
performed unexpectedly awesome in the marketplace and this company has also managed a
huge image in the business.
Question-1 (b)
This case describes the user about the demand and supply conception. Fuel and diesel
products have been taken into reflection for getting the knowledge about the demand and
supply law in a better manner. Demand & supply law has been studied and it has been found
that the meticulous product’s demand might be bigger with the enhancement of a subsidiary
product’s price. It has been analyzed that fuel price has been condensed by 2.4P
consequently, the price was 118.7/p in the last year and whereas, it has been also noted that
diesel price also has been improved to 3.1 p whereas the price was 120.5/p in last year
(Odell, 2014).
Thus, it has been found that a product or a service’s unleaded prices are based on
copious gulp factors. Through it, it has been found as an outcome that the prices of diesel
has been grasp up on the political, economic and financial policies which had been
administered by the administers. For an instance, monetary policy describe that if
administration needs to formulate a control over currency flow in international market then
it could enhance the products turnover in the industry and this would also make an impact
over the customers base. Additionally, it has been found that the diesel prices and fuel prices
are openly based upon a lot of alternative services and products that have been traded in
international market like fuel and diesel. The price of diesel has also been dappled on global
level to nation’s level with the diesel and fuel supply (Airaudo, Nisticò, and Zanna, 2015).
Answer to question- 1(c)
It has been analyzed that a country’s economy development and the welfare of the
society largely depends over the country’s policies and its rules and regulations. It has been
investigated that evaluating techniques which have been used by the state with the assistance
of central bank also impacts over the country’s economy development and the welfare of the
society. It has been studied through a article that monetary policy and fiscal policy of a
country creates a large collision over the Gross domestic product, GDI, economic growth,
international expansion, foreign direct investment etc. for example if the government of a
state creates a new policy to develop the jobs in the state than for sure, there would be large

Accounting and Financial analysis 5
opportunities for the FDIs to enter into the international market and invest the amount in that
state (Lütkepohl, and Netšunajev, 2014). Additionally, government would also present many
opportunities, subsidiaries etc to the industry to enhance the job opportunities and
community welfare.
Conclusion
Thus it could be said through the above study, it could be thought that strategic plans,
government interrelation, political situation etc make an impact over the company’s
performance directly or indirectly and also assists the company for its market growth. Still,
the strategies made by the organizations should be made after analyzing entire factors.

Accounting and Financial analysis 6
Part-2
Introduction
The report describes the user about numerous techniques of investment appraisal and
their implementation, significances of capital budgeting techniques, financial techniques etc
that are managed and further, and financial conception that assists the administrator to make
decision about the financial condition of the company (Reifschneider, Wascher and Wilcox,
2013). After analyzing an investigation over this case study, it has been analyzed that if
financial forecaster and government act upon a recital in very successful manner then it
could help the business to improve its business operations and the profit of firm would also
increase due to the assistance.
Financial Development:
Financial development is a crucial topic for every organization as without the funds,
company could not run its business functioning smoothly. Finance helps a business to meet
its entire objectives and goals. It has been researched that economy and financial condition
is the main step for every company as this is the man factor to achieve the goals of the
company. Financial factors are managed by the finance manager of the company. If the
finance manager of the company does not take much concern about entire financial factors,
tools and techniques etc then it becomes tough for the organization to survive and achieve th
goals. Financial tools and techniques contains capital budgeting planning, plan for raise the
funds, investment appraisal techniques etc. these techniques assist the financial manager to
make better decision about the improvement and growth of the business.
The above described tools and techniques help the manager in different situation
such as capital budgeting is helpful at the time of choosing one best project out of numerous
projects (Borio, 2014). Further, it has been analyzed that if the finance manager do not have
good knowledge about the financial tools and techniques than it become tough for the
company to manage the funds and it enhances the extra cost of the company. If the
techniques are used by the manager in a better manner than it would be helpful for the
company to manage the funds and enhance the growth of the company. Additionally, it has
been studied that these financial and accounting factors does not only help the company to

Accounting and Financial analysis 7
raise the funds but also assist the company to make better decisions about cost reduction and
meeting the goals of the company (Ruddik, 2015). If the techniques are used by the manager
in a better manner than it would be helpful for the company to manage the funds and
enhance the growth of the company (Bandy, 2013). Such as if a company is facing an issue
to choose a project from 3 projects than company could use the techniques of capital
budgeting to choose the best project.
Conclusion
Thus it could be said that many tools and techniques of finance. Capital budgeting,
planning of finance etc. aids the managers of finance department to identify all the aspects
that might implement some modifications into the finance growth and availability in the
operations of a firm. More, it has been studied that if administers could obtain their own
estimation then which alternative of plan would make revenue and cash inflow for the
company after that this could also enhance the other financial aspects of the company.

Accounting and Financial analysis 8
Part-3
Introduction
In this study it has been found that it is mandatory for a firm to assess every financial
aspect to take a better decision regarding growth and financial performance of the company.
Tesco plc has been taken into consideration to analyze the growth and financial performance
of the company. It is mandatory for every firm to administer its both the financial and non
financial factor to enhance the performance, market and growth of the company. For
analyzing the performance, Ratio analysis, capital budgeting, analysis of final statements are
few techniques that aids the company to investigate over the performance of the company.
Question no.-1
Tesco plc’s financial analysis
Tesco plc is operating its business in Australian market and it is in top retailing
companies of Australia. This company has its business functioning in many other countries
as well. This company operates its business in grocery commodities. Currently, headquarter
of the company is in UK (Ahrendsen, & Katchova, 2012).
Financial performance of Tesco plc:
In this report, financial performance has been conducted over the Tesco Plc. For
analyzing the financial performance of the company, 5 years data has been taken into
consideration. A negative slope has been found from last 4 years in the operations of the
company. It has been found that even in bad market, company has managed to perform well.
Tesco Plc’s liquidity ratio
Liquidity ratio depict about the capability of Tesco plc to meet all its current
obligation (Grinblatt, and Titman, 2016).
Liquidity ratio analysis

Accounting and Financial analysis 9
Particular 2013 2014 2015 2016
Current 0.66647062 0.647579927 0.603634528 0.752155828
Quick 0.466288831 0.470602791 0.454366482 0.628893172
(Wood, Wrigley, and Coe, 2016)
Graph showing Liquidity of Morrison
Investigation over the Tesco’s liquidity position, depict that the liquidity condition of the
company has been changed. In 2013, the current ratio of the company was lower which has
been increased to 0.75 in 2015. Consequently, the competitive firm (Morrison plc) has also
been analyzed and found that this company is enjoying the unvarying current ratio from last
4 years. Earlier, company has a current ratio of 0.56 in 2013 which has been lowered to .48
in 2016 due to alteration in the current liabilities (Jaumotte, Lall, and Papageorgiou, 2013)
Profitability
Profitability ratios depict about the profit performance of the company. Investigation
over the Tesco’s profitability position, it has been founded that profitability of the company

Accounting and Financial analysis 10
has been lowered. Entire profits of the company has been deducted such as operating profit
of 3.75% in 2013 has been lowered to 1.95% in 2015 due to many internal factors. Further,
the net profit of the company in 2013 was 0.0030 which has been lowered to 0.0020 in 2016.
ROCE of the company has also been analyzed and found that it has become 0.
Consequently, Morrison plc has not faced any internal issues and this company is enjoying a
great profitability state in last 4 years (Morrisons plc, 2016). Net profit ratio of the company
also depict about the good performance of the company (Gambacorta, and Signoretti, 2014).
Profitability Ratios 2013 2014 2015 2016
Operating Profit Margin 0.037567423 0.041395912 -0.0929934 0.0192163
Net Profit Margin 0.000378513 0.015261891 -0.0921746 0.0025352
Return on Capital
Employed 0.1 0.1 -0.2 0.0
Return on Equity 0.00144049 0.065887787 -0.8119078 0.0159981
Return on Total assets 0.000484868 0.02034524
-
0.12984575 0.003143222
Profitability of Tesco Plc

Accounting and Financial analysis 11
Profitability details of Tesco
Solvency
Solvency ratio describes the user about the loans, equlity, capital, debt etc about the
company. For conducting the solvency ratio over the company, following ratios has been
calculated of the company: capital structure ratio, interest coverage ratio and debt equity
ratio.
Debt equity ratio
Capital structure ratio 2012 2013 2015 2016
Debt- equity 2.50205179 2.739665856 5.25286381 4.089728727
Interest coverage ratio 4.607350097 4.664893617
-
11.60721443 2.100401606
Debt equity ratio
This above table depict that solvency position of the company has been bad from last
years. Its solvency is not like before. Interest coverage ratio of 4.08 has been supposed by
the firm in 2013 which has been improved to 2.10 in 2015. Consequently, competitive

Accounting and Financial analysis 12
company which is Morrison plc has conserved a good interest coverage ratio worth of 1.48
in 2016 (Lee and Epstein, 2012). A bad solvency position has also been found through
capital structure of the company.
Figure: Debt equity ratio of Tesco Plc
Efficiency ratio
Efficiency ratio depicts the user about the efficiency of the company (Kurov and
Stan, 2016). It has been analyzed through the study that capitalization condition of the
company is not like before. Debtors turnover ratio has been held 26.78 by the company in
2013 that has been increased to 10.06 in 2016.
Efficiency ratio analysis
Particular 2013 2014 2015 2016
Receivable turnover 26 26 9.17 10.06
Creditor turnover 6.02 5.4 12.4 11.9