The answers to the ratios, together with a

summary judgement on the 4 groups:

Improving Improving
profitability liquidity
from 2015 too. Still
to 16. All below
ratios show ideal but
improveme could be
nt, but ok given
ROCE and type of
NPM best business
(23.6%) 4.3%

Still high
All measures
and
of efficiency represents
are good. 18.3 17.2 risk-
Payables to though
Receivables
ratios very some
good improvem
ent noted
 Like a 16-

The question: 20 mark

essay
question?
YES to all these three!

“Given a thorough assessment of Tesco’s

financial position via a ratio analysis, how
confident are you that they are working
successfully towards meeting the corporate
objectives they set themselves in 2014?”

A combination of
Find out the
quantitative and
2014 corporate
qualitative data
objectives first?
needed?
Corporate Ratio Other/ How confident are
you they are
objective analysis/ qualitative data
working towards
financial successfully
evidence meeting it?

To regain • Improved cost • Commitment to better Highly

management and cust’ service
competitiveness confident
• Immediate price match
profitability
in the UK at till
• Exclusive new brands
• Thai and European bus
performing strongly

To protect and • Improved • Sale of Homeplus brand Highly

liquidity, gearing in Korea helped to
strengthen the confident
generate £2.6bn of
and efficiency
balance sheet cash
• Total equity
• Buy-back of 70 stores
increased by which were on sale and
about 1/5 (20%) leaseback

To rebuild trust • Falling revenue • Immediate price match Less confident

and goodwill from at till
and than the others
• A focus on corporate
2015-16