AC4052QA Financial Accounting
Submission Date: Monday 11th October 2021 before 3pm ( New extended date)
This Coursework contributes 30% to the Overall Module Mark
Word count 1,500.
Specify the word count at the end of your coursework, just before the reference list.
Submission should be through turnitin via weblearn.
Required
Work on the published financial statements of Tesco plc for the last three years 2020 – 2017:
1.Analyse and evaluate the performance, liquidity and financial structure of the three years 2020 – 2017. Use the accounting ratios shown below and any other information relevant to Tesco plc. Information can be obtained from the annual report and accounts and any other source of evidence that you believe helps to explain the company’s performance and position.
2.Highlight any 5 limitations in the use of accounting ratios that you found in your analysis and evaluation of the company over the three-year period. This may include reference to the movements in the company’s share price.
Source: FAME Database
TESCO PLC
RATIOS
YEAR END 29/02/2020 23/02/2019 24/02/2018 25/02/2017
Profitability ratios
∟ Return on Shareholders Funds (%) 9.91 11.27 12.39 2.25
∟ Return on Capital Employed (%) 3.83 5.90 5.07 0.55
∟ Return on Total Assets (%) 2.51 3.41 2.89 0.32
∟ Profit margin (%) 2.03 2.62 2.26 0.26
∟ Gross margin (%) 7.07 6.48 5.83 5.19
∟ EBIT margin (%) 3.89 3.37 3.20 1.82
∟ EBITDA margin (%) 6.06 5.62 6.27 4.73
Operational ratios
∟ Net Assets Turnover (x) 1.88 2.25 2.24 2.11
∟ Fixed Assets Turnover (x) 1.65 1.76 1.85 1.84
∟ Interest Cover (x) 2.06 4.12 3.06 1.17
∟ Stock Turnover (x) 26.62 24.42 25.40 24.30
∟ Debtors Turnover (x) 130.83 106.87 123.37 114.12
∟ Debtor Collection (days) 2.79 3.42 2.96 3.20
∟ Creditors Payment (days) 31.44 32.84 34.39 32.08
Structure ratios
∟ Current ratio (x) 0.73 0.61 0.71 0.79
∟ Liquidity ratio (x) 0.60 0.49 0.60 0.68
∟ Asset Cover (x) 3.11 5.47 4.44 3.92
∟ Gearing (%) 222.91 161.26 233.35 454.71
Per employee ratios
∟ Profit per employee (unit) 3,108 3,604 3,958 312
∟ Turnover per employee (unit) 153,064 137,589 175,322 120,376
∟ Salaries/Turnover 11.42 11.96 12.58 13.17
∟ Average Remuneration per employee (unit) 17,481 16,461 22,057 15,849
Assessment criteria:
(guidelines – suggested –under FOUR MAIN HEADINGS) Explanatory comments on the assessment criteria Maximum marks for each section
Recommended marks
Introduction Background of the business and its operations 10%
Interpretation of ratios
Relevance, clear demonstration of understanding and applied in context 70 %
Conclusion Identifying the key points raised in the report 10 %
Format, referencing, bibliography, use of tables/charts Structured analytical report with supporting referencing where appropriate 10%
