Financial Management
Tesco Plc’s Financial Appraisal
2007
1.Executive summary
The purpose of this report is to provide a financial appraisal of Tesco Plc for Tescopoly Alliance, a customer stakeholder group.
The key conclusions of this report are:
- Tesco’s very strong and continuously growing market position is enabled by their huge fixed assets in property.
- One reason Tesco has achieved a very strong position is due to their dismissive approach towards law and regulations. This approach has resulted in an exceptionally good financial performance and efficiencies.
1.1.Strategic issues facing Tesco
The strategic issues facing Tesco and their financial implications over the next 5 years:
- The new US market entry is not causing any main implications, as it is funded by releasing a small portion of the property assets.
- The ever tightening regulations can result in a drop in sales, which can badly influence Tesco.
- The decrease of UK real estate can be very dangerous for Tesco, as they can lose their main assets the value of their property funds.
1.2.Tesco’s current financial position
Tesco’s current financial position is very strong, even in comparison to the second largest market competitor Sainsbury. Based on the available financial data all the financial indicators are excellent with the exception of the Liquidity. There are also concerns regarding their accounting methods, such as corporate tax paying.
1.3.Ability to meet challenges
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