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

Financial Report Analysis - Essay Example

Comments (0) Cite this document
As per the company's financial statements, Tesco Plc's capital structure comprises about 64% equity finance and 36% debt finance. Therefore, it can be said that the company uses a mix of debt capital and equity capital to finance its business operation. It does not over rely on the externally borrowed funds and has sufficient equity funds available to meet various financial needs of the business…
Download full paperFile format: .doc, available for editing
GRAB THE BEST PAPER97.7% of users find it useful
Financial Report Analysis
Read TextPreview

Extract of sample "Financial Report Analysis"

Download file to see previous pages The company has been listed on the major stock markets around the world for years. The major benefit of floating a company's shares in the stock market is that the company's shares become available to general public, which in turn helps a company to generate more equity finance for the company without any liability. This is the reason Tesco Plc does not need much of debt finance to fund its business operations. It has more of equity finance readily available inside the company without having to pay any interest and without any liability to pay off the amount in future. It has transformed its entire capital structure and as evident from its annual reports for the last three years, the company has been minimizing the extent of external debt used for financing. Thus, issuance of shares publicly and stock market listing is very useful for a company in increasing the financing options to obtain necessary funds for the business.
Listing in stock market is very beneficial to a company's shareholders. It enhances the liquidity of shares owned by the shareholders, hence they become more marketable as the shares can easily be bought and sold in the stock market. It becomes more convenient for the shareholders to determine the market value of shares in their hands. Apart from these benefits, the shareholders get an opportunity to obtain financial gains out of the shares they own other than the dividends paid by the company and the opportunity is the Earning per Share of the company's shares. Tesco Plc's EPS has had an increasing trend over the years and it is one of the major benefits of stock market listing to the shareholders of the company.
Deciding the Mix of Debt and Equity Finance
When deciding upon the mix of suitable debt and equity finance, a company needs to consider a lot of issues. Some of them are listed below:
The extent of ownership and control the company is ready to sacrifice.
The different types of financing options available to the company and the cost of financing
The amount of cash available to pay off the borrowed money and interest payment
Word count: 495 words
Importance of Cash
According to Bernstein Leopold A. (1993, p129), "Cash is considered the most liquid of assets. In fact, it represents the starting point, as well as the finish line, of what is known as the accounting cycle"
Cash is the life blood of any business activity. No business can run without the sufficient availability of cash to run its operations. Cash is needed in the company to meet its various short terms needs, payments of current liabilities and meeting day to day business expenses. Cash also forms a vital part of the working capital, which determines the health of a company in terms of short-term liquidity.
Tesco Plc- Cash Management Policy
A company can manage its cash and cash equivalent assets by controlling the payment collection methods, curbing unnecessary expenses and utilizing the uninvested cash lying in the company. Tesco Plc has described its supplier payment policy in its Directors' report section of the annual report. Also, the company's cash management can be assessed with the help of the cash flow statement. However, the company has not displayed any ...Download file to see next pagesRead More
Cite this document
  • APA
  • MLA
(“Financial Report Analysis Essay Example | Topics and Well Written Essays - 2000 words”, n.d.)
Financial Report Analysis Essay Example | Topics and Well Written Essays - 2000 words. Retrieved from
(Financial Report Analysis Essay Example | Topics and Well Written Essays - 2000 Words)
Financial Report Analysis Essay Example | Topics and Well Written Essays - 2000 Words.
“Financial Report Analysis Essay Example | Topics and Well Written Essays - 2000 Words”, n.d.
  • Cited: 0 times
Comments (0)
Click to create a comment or rate a document

CHECK THESE SAMPLES OF Financial Report Analysis

Market Research Paper

5 Pages(1250 words)Coursework

Urban Neighbourhood Study

6 Pages(1500 words)Essay

Finncil Mrkets nd Monetry Policy

One of the voters (Mr Tucker) admitted that he was torn between this view of the economy - which he dubbed the alternative story - and the orthodox view, namely, that with the economy operating close to capacity, companies were likely to seek to restore profit margins by raising prices and pushing up consumer price inflation.

"In that sense, I think the outlook is bimodal - in terms of there being two main stories. The orthodox story, to which I gave most weight in my November vote, required a small tightening," he said. On the significance of the 15 per cent annual rise in broad money supply, Mr Tucker said it was important to look at what was contributing to the growth: "One has to get one's hands dirty in analysing t...
9 Pages(2250 words)Report

Methodological Approach in a Quantitative Research

...). The result of a qualitative research is depended on the analytical skills of the researcher. The researcher should possess a good observation skill in order to make proper analysis of the situation. As the name describes quantitative research deals with numbers or items that can be expressed in numbers. It gives information about the number of people involved in the topic of the research. “Quantitative research is all about quantifying the relationships between variables. Variables are the things you measure on your subjects, which can be humans, animals, or cells.” (Hopkins 1998). A quantitative research is usually made by making analysis of the data collected from the public through questionnaire or interview. Survey is always...
9 Pages(2250 words)Report

Historical Analysis Long-Term Care

In accordance with a survey published by the U.S. General Services Administration in 2004 ‘the number of elderly people residing alone without living children or siblings is expected to reach 1.2 million in 2020 — up from about 600,000 just a decade ago’ (U.S. General Services Administration, 2004, online article). Apart from the elderly, people with disabilities – as well as those with severe problems of health - also require continuous assistance in all their activities. The care of people belonging in the above categories is likely to last for quite a long (in most cases for the rest of their lives); for this reason, appropriate changes in existing legislation are made periodically in order to meet the n...
7 Pages(1750 words)Report

Investment Appraisal and Management Control

... by itself (Duncan Williamson, 2003) 1. Relevance of Investment Appraisal: While investing on any project, the company normally would have a choice. The management need to have a good understanding of each of these proposals and should be able to weigh the benefits and drawbacks of each proposal. All the decisions require a detailed analysis to assess whether or not the investment is feasible for the company. The feasibility of the project depends not only on financials of the company but also partly on non- financial factors (Bized – Finance and Investment, 2008). Companies have various choices for change and development. The senior management need to ensure that all the merits and demerits of the investment are taken...
14 Pages(3500 words)Report

Building Engineering Services and Analysis of Core Systems

Finally, we will conduct an in-depth analysis of the heating and insulation systems available in modern homes and propose a strategy to optimize the energy consumption and maximize customer comfort.

Building Service Engineers are usually mechanical or electrical engineers, who do not necessarily have a degree in Building Services Engineering. They start contributing to inputs before the building construction commences. Their assessment starts with researching the suitability of the building site for construction and also foreseeing the provisions to connect services to supply lines. Based on this analysis, they conduct discussions with the client, architects and structural engineers to concur on an installation design t...
13 Pages(3250 words)Report

CFD Analysis of an Internal Flow

So we can see the complete system, such as cars, airplanes, a block of buildings, etc. It is opposite to an experimental investigation by a material model or prototype of the system, such as an aircraft or car model in a wind tunnel.

The role of CFD in this contemporary technological world is crucial. It assists in the path of the global world of Computer Assisted Engineering or CAE that refers to the ensemble of simulation tools that support the work of engineers between the initial design phase and the final definition of the manufacturing process. The industrial production process uses various software tools for computerization of the whole production cycle. Among those tools, the most important is Computer-Assisted...
6 Pages(1500 words)Report

A Hydrograph of River Cynon and Design of an Open Channel

...Storm Drainage Design Project: A Hydrograph Analysis of River Cynon and Design of an Open Channel 0 Introduction River Cynon is geographically located in South Wales and stretches from Hirwaun to Abercynon as a major tributary of the River Taf. The river has a catchment area of 160 square kilometers. Rainfall and river stage is monitored at Station 57004 at Abercynon operated by the Environment Agency in Wales. The station is a Flat V weir, which serves as a velocity-area station for high flows. Gauging history revealed that this station is over-topped by extreme floods and receives effluent discharges from industrial areas within the catchment. The station is located at elevation 81.2 m (Centre for Ecology and Hydrology [CEH], 2005...
9 Pages(2250 words)Report

Organizational Consultant for We Make Widgets, Inc

... enough time to indulge in their roles as parents, spouses, children, and care givers. However, the concept of work-life balance suffers on account of lack of formal and written policies and strategies, traditional management styles, and lack of expertise in handling flexible workforce (MacPherson, 2006). We have been hired as consultants to We Make Widgets, Inc. The company has presented us a problem that requires immediate remedial measures. Here is a brief summary of how we will help solve the problem. Chief Executive Officer (CEO) Maria Visionaria, the Chief Operating Officer (COO) Mujibar Delhi, and Chief Financial Controller (CFO) Wanda Sharp constitute the top echelon of the executive hierarchy...
6 Pages(1500 words)Report

Critical Review of General Electric

...Introduction General Electric is certainly no longer what it was a few years ago under the dynamic and hard-driving leadership of Jack Welch. G.E. has a market cap of $169 billion but it had made huge bets in the financial sector which is not doing exactly very well for the last few years. As a result of this wrong bet, it is now scrambling to sell some assets and diverting cash away from dividends (Cox & Cyran, NYT). This is symptomatic of what seems wrong with G.E. today which is beginning to look like a poor shadow of its former self. It had been often compared to one of its rivals that can approximate G.E.s range of businesses in the aerospace, power generation and infrastructure sectors but with strong financial statements...
12 Pages(3000 words)Report
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 Report Analysis for FREE!

Contact Us