Report on Business Resources Management and Financial Analysis of LIDL

This report examines the business resources of LIDL, a UK supermarket chain, focusing on resource management, financial strategies, and financial statement analysis. It covers the importance of various resources (human, physical, financial, technological) in achieving organizational goals. The report details sources of internal and external finance, including retained profits, sale of assets, and different types of loans. It includes an interpretation of LIDL's income statement and balance sheet, analyzing revenue, expenses, and key financial ratios. Furthermore, the report explores the use of budgets for financial control, highlighting their role in planning, forecasting, and continuous improvement. The conclusion emphasizes the significance of resource management and financial planning for business success. The report references financial statements and provides an overview of LIDL's financial performance from 2014 to 2017.

BUSINESS RESOURCES

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1(Covered in leaflet).............................................................................................................1
TASK 2 (Covered in ppt) ................................................................................................................1
TASK 3............................................................................................................................................1
P4 Sources of internal and external finance...........................................................................1
P5 Interpretation on contents of a balance sheet, trading and P&L account..........................2
TASK 4............................................................................................................................................5
P6 Use of budget for financial control...................................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
In an organisation, there are various kinds of resources available like human, physical,
financial, technological and more. Among these, human resource play a crucial role in
accomplishing targeted goals and objectives in set period of time while other materials enable
them to do function in appropriate manner (Hai-xia, 2011). This project entails the importance
and purpose of managing such kind of resources in an enterprise. It also describes way to
manage human resource, raise funds from different source as well as an interpretation on key
financial statements is also given. For this context, a large company of UK named by LIDL has
been taken which deals in supermarket business.
TASK 1(Covered in leaflet)
TASK 2 (Covered in ppt)
TASK 3
P4 Sources of internal and external finance
In order to run a business properly, a company requires money in sufficient manner. By
the term finance, it entails the management of desired amount of money and allocate from
different sources (LIU and YAN, 2015). For an instance- If an organisation sells its products or
services to people then they are considered as source of obtaining finance. It can be distinguished
in two broad terms that are:-
Internal Source of finance: Rather than to induce loan from banks and investors, a company can
get necessary funds from internal source i.e. use own money for financing in operations. In
context with LIDL, this kind of finance helps in saving money on payments of interest or getting
free from being accountable to investors. It uses following source to generate finance in
business- Retained Profits: This source is used by such companies that operate business on large
level with shareholders and stock. They used to recycle profit as working capital instead
of using the same for paying it as dividends. Sale of Assets: In this context, management of LIDL can sale such assets to other
companies like machineries, equipments, transport and more which have no use in
business. It will help to cover a cash-flow emergency in quick manner.
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 Reducing working capital:It is a type of strategy used to manage available cash in
adequate manner. Under this context, employers used to concern more on longer payment
terms rather than shorter billing items so that funds can be received faster.
External Source of finance: It states process of arranging funds from outsiders rather than
retained earning from internal activity of business (Xie-kui and Dan, 2015). This source of
financing can be segregated on the basis of long-term and short-term purpose that are- Long-term source: It includes equity shares, debentures, term loan, preferred stock,
venture capital, leasing and hire purchasing. For big enterprises like LIDL, equity shares
and debentures are considered as common source but costly as compared to finance on
debt. While hire purchase is normally provided by suppliers to buyers with an alternative
to buy assets of company at the end of its term.
 Short-term source:Bank overdraft, trade credit, factoring in debt etc. are defined as short-
term source of finance. As companies are required money for day-to-day operations in
which requirement of cash is generated due to a gap between collection and payments.
Therefore, to fulfil this gap, management of LIDL used to take bank overdraft. While
trade credit is given by suppliers or creditors which allows a firm in delaying its payment
for certain period of time (LIU, SU and QI, 2012).
P5 Interpretation on contents of a balance sheet, trading and P&L account
Income statement of LIDL
Currency in GBP. All numbers in
thousands
Revenue 31/01/18 31/01/17
Total revenue 8267 8212
Cost of revenue 2999 2612
Gross profit 5268 5600
Operating expenses
Selling general and administrative 7380 5543
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Total operating expenses 10488 8114
Operating income or loss -2221 98
Income from continuing operations
Total other income/expenses net 3 4
Earnings before interest and taxes -2221 98
Interest expense - -2
Income before tax -2218 102
Income tax expense -125 -85
Net income from continuing ops -2093 187
Non-recurring events
Net income
Net income -2093 187
Net income applicable to common
shares -2093 187
Income statement
Revenue (ttm) 8.27M
Revenue per share (ttm) 0.03
Quarterly revenue growth (yoy) -2.50%
Gross profit (ttm) 5.27M
EBITDA -1.84M
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Net income avi to common (ttm) -2.09M
Diluted EPS (ttm) -0.9
Balance sheet
Total cash (mrq) 3.23M
Total cash per share (mrq) 0.01
Current ratio (mrq) 3.2
Book value per share (mrq) 0.03
Cash flow statement
Operating cash flow (ttm) -720k
Levered free cash flow (ttm) -969.12k
Trading information
Stock price history
Beta 0.14
52-week change 3 -28.75%
S&P500 52-week change 3 14.79%
52-week high 3 10.45
52-week low 3 5.999
50-day moving average 3 7.535
200-day moving average 3 6.95
Share statistics
Avg vol (3-month) 3 50.81k
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Avg vol (10-day) 3 32.5k
Shares outstanding 5 244.18M
Float 146.08M
Interpretation: From this financial statement, it has interpreted that LIDL Company as
compares to last year, it has not achieved much success in terms of sales performance ans
revenue.
TASK 4
P6 Use of budget for financial control
A budget in a firm provides a road map which describes entire detail about estimated
outcomes through which manager of a firm can make decisions as per set goals (Junyi, 2014). It
helps in three main aspects of business that are:
Planning: When a budget reflects expected sales in a certain period then manager can analyse
costs of the same and determine resources or raw materials need for that. For an instance- if sales
of a business is increasing 4% over budget for specific time then management can add this in
further calculation.
Forecasting: Budget of previous financial year helps managers in preparing budget for following
year by applying strategies that are helpful in last year for gaining profitability.
Continuous improvement: With weekly performance of business in terms of sales, managers can
evaluate ways through which improvement may be done (Chen, Nasongkhla and Donaldson,
2015). Budget helps them in providing clues as where they need to concentrate more for
improving financial performance.
P7 Financial State of LIDL
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(Sources: Financial statement of LIDL,2017)
This statistic reveals profit gained by LIDL from 2014 to 2017. It shows that operating
profit of this company dropped continuously i.e. amounting 68 million euros in 2017 which was
near about 2 million euros less as compared to 2016.
CONCLUSION
It has been concluded from this report that behind success of every organisation,
management play an important role who helps in allocating different resources as well as manage
them in proper way. It includes human, physical, technological and other non-financial resources
which have played different-different role in operating functions of business. Along with this,
financial resources are considered as most essential initiatives without which entire functions of
a company cannot operate. So, various kinds of financial sources are also described in this
assignment.
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Illustration 1: Financial statement of LIDL

REFERENCES
Books and Journals
Junyi, N., 2014. Measurement of Urban-Rural Development Coordination and its Spatial
Difference Analysis in Huaihe River Basin. Journal of Xinyang Normal University
(Natural Science Edition), 4. p.016.
Xie-kui, Z.H.A.N.G. and Dan, Y.U.A.N., 2015. Research on Urban-rural Co-ordination and
Integration of the Urban Agglomeration: Taking Beibu Gulf Urban Agglomeration as an
Example. Journal of Urban Studies, 1. p.018.
LIU, Y.W. and YAN, Q.W., 2015. On the spatio-temporal distribution regularity of the carbon
emissions based on the GIS in China. Journal of Safety and Environment. 3. p.047.
Hai-xia, X.I.A.O., 2011. A Countermeasure Study on the Exploitation of Oil and Gas Resource
in QingYang. Journal of Gansu Normal Colleges, 5. p.006.
Chen, S.H., Nasongkhla, J. and Donaldson, J.A., 2015. University Social Responsibility (USR):
Identifying an Ethical Foundation within Higher Education Institutions. Turkish Online
Journal of Educational Technology-TOJET, 14(4). pp.165-172.
LIU, J.Q., SU, Y.Y. and QI, C., 2012. A Study on the Government Information Disclosure
System of the Most Stringent Water Resources Management. Central China Normal
University Journal of Postgraduates, 2. p.010.
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