Tesco Plc Financial Statements Analysis

5552 words 23 pages
Assignment Module Financial Statement Analysis

1. Introduction to the company and its role within the wider international market; including competitors and current market conditions that may impact on its financial performance. Tesco plc is a British multinational grocery and these days the third- largest retailer worldwide in terms of revenues, operating in 14 countries across Europe, Asia and Nord America.The retailer was founded in 1919 and operated exclusively within the UK until the early 1990s when it started diversifying geographically. Tesco in its early years only offered foods and drinks in its stores but then successfully diversified its product range to electronics, books, household appliances, clothes, financial services
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Entering the American market (which was saturated by giant competitors such as Walmart) Tesco made retrospectively many mistakes which led to the bad performance and losses in the recent years. The American did not know for what kind of shop Fresh & Easy stands for and were looking for British products in the shelves which the subsidiary did not sell. Furthermore they did not like the name and the “cool and antiseptic” look of the stores (cf. “Why Tesco’s Fresh & Easy turned Americans off”, the guardian, 5 December 2012). Consequences of this unfavorable start in the United States were tremendous losses, only in the first half year of 2012 amounting to £ 74m. These losses had a direct negative impact on the group profit. As the like-for-like sales were constantly falling recently and are now at 4pc Tesco plans to take a decision concerning the future of the Fresh & Easy stores in April 2014. It is likely that the lossmaking stores will be sold or closed. Although Tesco had to face the mentioned problems recently it remains the third-largest retailer in the world measured by revenues.

2. An analysis and evaluation of the data available in the organisations’ annual reports, including analysis that focuses on changes and developments within the financial markets and their impact on your chosen organization. You can add critical comparison of the chosen organization with a suitable market competitor, examining the implications of your findings. For analyzing the


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