Contact Us
Sign In / Sign Up for FREE
Go to advanced search...

Financial Management - Essay Example

Comments (0) Cite this document
Financial Management Author Institute Financial Management “Tesco PLC is an international retailer. The principal activity of the Company is retailing and associated activities in the United Kingdom, China, the Czech Republic, Hungary, the Republic of Ireland, India, Japan, Malaysia, Poland, Slovakia, South Korea, Thailand, Turkey and the United States…
Download full paper File format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
Financial Management
Read Text Preview

Extract of sample "Financial Management"

Download file to see previous pages The company is deemed to be the third largest retailer with respect to the amount of revenue that it produces (Potter, 2011; Deloitte, 2010). To examine and analyze the financial performance of the company, the ratio analysis technique needs to be used. Ratio analysis is a technique which uses a set of different financial measures known as financial ratios, in order to analyze the financial performance of a company. These financial ratios of the company would be compared with its prior year ratios to understand whether there is any improvement in the performance of the company (Shim et al, 2000). The financial ratios for Tesco plc are as follows: Ratios 2010 2009 Liquidity Ratios Current ratio 0.73 : 1 0.75 : 1 Quick ratio 0.44 : 1 0.61 : 1 Gearing Ratios Gross debt-equity ratio 74.9% 109.6% Net interest cover 3.1 times 7 times Profitability Ratios Gross Profit Margin 8.22% 7.76% Net Profit Margin 4.1% 3.99% Investment ratios Earnings per share 29.33 cents 27.50 cents (Annual Report, Tesco plc, 2011) . Liquidity Ratios evaluate a company’s ability to pay off their debts when they fall due. Basically it gives a basic picture of a running position of a company. Current ratio illustrates a company’s ability to pay off its short term obligation/ current liabilities (amount due within 12 months time) with the current assets that it holds whilst the quick and the cash ratio illustrates a company’s ability to pay off their debts with the most liquid assets and cash respectively. Current ratios on the other hand analyze a company’s ability to pay off their respective debts/liabilities through their most liquid (easily converted to cash) assets. The ratios in the above table indicate that the liquidity position of the company has worsened in 2010 as compared to 2009; both the current and the quick ratios have deteriorated over the year. The current ratio has fallen from being 0.75:1 in 2010 to 0.73:1 in 2009. The quick ratio has also fallen from being 0.61:1 in 2010 to 0.44:1 in 2009. This should be a concern for the company as the liquidity ratios are a measure of company’s subtleness and long term sustainability. With the help of the profitability ratio, a company can ascertain the increase/decrease in the level of costs, revenues and profits over any given period of time. These ratios help in ascertaining the company’s performance with respect to the profits that the company/organization has generated. Gross Profit Margin/Net Profit Margin ratios help in ascertaining a company’s gross profit/net profit with respect to the revenue that the company has generated; this ratio helps in understanding the changing trends of the operational costs within any particular period of time. Both the Gross Profit and the Net Profit margin ratios have improved for the company over the one year concerned. This is a good sign for the company with respect to its growth, the company’s gross profit margin has improved from being 7.76% in 2009 to 8.22% in 2010, this is both because of the fact the company has increased its sales revenue and it has controlled its cost as well. The net profit margin has also increased from being 3.99% in 2009 to 4.1% in 2010, although the change is not a huge one but still for a large company like Tesco plc, this change is worth noting as it has increased the company’ ...Download file to see next pages Read More
Cite this document
  • APA
  • MLA
(“Financial Management Essay Example | Topics and Well Written Essays - 1250 words”, n.d.)
Retrieved from
(Financial Management Essay Example | Topics and Well Written Essays - 1250 Words)
“Financial Management Essay Example | Topics and Well Written Essays - 1250 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Financial Management

Global Challenges for Business Management and Leadership

This section aims at understanding the challenges faced by the United Nations due to political conflicts. In the summer of 2007, an issue in the Politically Speaking, the DPA had highlighted the increased focus on the conflict meditation. This report had also highlighted the interview with the Under-Secretary-General for political affairs. In the interview, he defended the UN against all the criticism and he also highlighted the need for finding political solutions for issues around the world. The interview also highlighted the importance of results to show the effective working of the UN. This interview also highlighted and urged critics to look at the positive along with the negatives of the UN. “The UN has knowledgeable a...
7 Pages (1750 words) Research Proposal

Customer Relationship Management

 Consumers started looking for variety and lower prices. Through the use of technology, such customer tradeoff against variety and prices is not necessary. The US life insurance industry is large, mature and dominated by a number of large companies and this industry has been one of the early adopters of computer technology (Subramanian & Chatterjee, 2007). The advent of the CRM systems changed the landscape of the insurance industry.

The health insurance organizations use CRM to prepare health proposals and process applications in a much faster and accurate way. The organizations are better able to understand the needs and habits of the customer and provide more efficient service. Companies are able to integrat...
9 Pages (2250 words) Case Study

Diversity Management in Organisations

...Managing Diversity in Workforce Contents Introduction 2. Diversity Management: Challenges and Benefits 2 3. Managing Diversity 3 3 Significance of Involvement culture 3 3.2 Impact of Organizational Ethnicity on diversity 4 4. Best Practices to Manage Diversity 4 5. Conclusion 5 6. Bibliography 6 1. Introduction “Diversity” characterizes the massive amount of individual divergences that subsists amid persons. Workforce diversity is a gathering of the resemblances and discrepancies between workers in such sorts as “age, sexual category, cultural inheritance, physical capability and race.” (POLLITT, David, 2006) As of today, diversity in the place of work is widely acknowledged as an advantage that contributes to a business institution’s base...
6 Pages (1500 words) Case Study

Active Directory - Security, User, and Resource Management

Administrators make use of group policies to launch principles for desktop predilections and software. For many corporate information technology groups, concurrence with group policies to identify what software should be presented to each category of user, even without human intervention installing it on demand from a corporate server (Silberschatz, Galvin, & Gagine 2002. P. 838). The capability of the AD was introduced in the year 1999, its initial release was with the MS Windows 2000 Server Ed., additionally personalized to spread out functionality, security parameters and build up administration in MS Win Server 2003. The most recent better facilities and efficient edition of the AD are introduced in the Windows Server 2008...
6 Pages (1500 words) Report

The Management, Leadership and Teamwork Competencies Required by a Small Business Owner

On the other hand organizational leadership is defined as the ability based on the specific skill of an individual to lead his/her subordinates in a manner that pre-planned organizational goals could be achieved within the defined time-frame.

According to Burns (1978) and Bass (1985), transformational leadership has a set of category constructs such as values, morals, farsightedness, long term goals, principles, acute awareness about the dividing line between causes and symptoms, mission statements, strategic perspectives, and human resources. Similarly, they identify a set of category constructs in the transactional leadership also. For instance concentration on the task at hand, short term goals and tactics, confusion co...
6 Pages (1500 words) Coursework

Management: Social Responsibility and Ethics

When we speak about business management, most people talk about the core business functions like strategies, products, training & development, management of various departments of the business like marketing, production, planning, etc. Social responsibilities and business ethics are the least communicated topics in the business community because of the least preference given to the non-productive sectors by organizations. Most of the greedy organizations spent millions on the research and development for improving their competitive power in the business world, but they often keep a blind eye towards their responsibility towards ensuring proper ethical standards in their business activities. Organizations that underestimate the...
6 Pages (1500 words) Coursework

The Effects of Financial Crisis on Supplier Selection Criteria of the Oil and Gas Industry Equipment Market

It is a difficult task to find those vendors who not only have the adequate quality and quantity of the needed raw materials but who also have an attitude of efficiency and display commitment to customer service (Sonmat, 2006). Further, organizations also strive to locate and select vendors who can be depended upon for long term relationship.

The number of factors or attributes desired from the vendor is vast, and different organizations and different industries place different importance on the attributes (Sonmat, 2006). Some of the vendor attributes may gain importance owing to the nature of the industry, for example, in the case of consumer perishables suppliers, like fresh vegetables or fruits, the buying firm would...
20 Pages (5000 words) Literature review

Information Security Management

Security is a group of activities that include the policies, measures, and actions which are utilized to stop unlawful access or alteration, theft, and physical damage to information or computer. Security can be supported by an assortment of techniques and tools to safeguard computer hardware, software communications networks, and data (Laudon & Laudon, 1999, p. 502). In the modern age of information technology, there are many threats happened for organizational information. We need a security model that has the ability to manage and secure our information reserves. Technical administrative safety /security measures like security plans, actions and techniques are the main practices for the organizational information security m...
10 Pages (2500 words) Research Paper

Self Assessment: Conflict Management Style

...Please indicate Self Assessment: Conflict Management Style The assessment on conflict management that I took suggests that I am the type of person who tends to cooperate and work with people to achieve a desirable outcome. It suggests that when I am faced with a conflicting situation, although I listen and consider other viewpoints included in the discussion, I carefully evaluate and analyse every detail in accordance to my own. It depicts that I welcome other ideas or arguments but not easily swayed by them for I tend to make my point be heard and accepted as well, creating a really interesting discussion that in turn promotes a win-win situation. Furthermore, the assessment also indicated that second to collaborating attitude, I also...
7 Pages (1750 words) Essay

Management Theory and Practice in the Early Childhood Education Industry

...Management Theory and Practice in the early childhood education industry This Report applies management theory into practice in the early childhood industry, especially in the context of women leaders. Management issues play a significant role in the academic sector, because early childhood professionals need higher levels of motivation in order to avoid burnout . As pointed out in a study by Osgood and Halsall (2007) where they carried out research to examine the position of women in leadership or management positions, a “glass ceiling” exists for women in the academic setting, which could significantly impair motivation. Since many of the individuals employed in the early education sector are women, addressing this issue is even more...
6 Pages (1500 words) Coursework
sponsored ads
We use cookies to create the best experience for you. Keep on browsing if you are OK with that, or find out how to manage cookies.

Let us find you another Essay on topic Financial Management for FREE!

Contact Us