Financial Statement Analysis Using the ROE Model: International Presented below are the consolidated balance sheets and income statements for the Tesco, PLC, the worlds third largest retailer, for the years 2016 and 2015. Tesco is based in the United Kingdom.

TESCO, PLC Group Income Statement For the years ended February 2016 and 2015
	2016	2015
Continuing operations:
Revenue	54,433	56,925
Cost of sales	(51,579)	(59,128)
Gross profit	2,854	(2,203)
Administrative expenses	(1,852)	(2,574)
Profit on property-related items	44	(973)
Operating profit	1,046	(5,750)
Share of post-tax profits of joint ventures and associates	(21)	(13)
Finance income	29	80
Finance costs	(892)	(651)
Profit before tax	162	(6,334)
Taxation	54	670
Profit for the year from continuing operations	216	(5,664)
Discontinued operations:
Loss for the year from discontinued operations	(87)	(102)
Profit for the year	129	(5,766)
Attributed to:
Owners of the parent	138	(5,741)
Non-controlling interests	(9)	(25)
	129	(5,766)

TESCO, PLC Group Balance Sheet As of February 27, 2016 and February 28, 2015
	2016	2015
Non-current assets
Goodwill and other intangible assets	2,874	3,771
Property, plant, and equipment	17,900	20,440
Investment property	78	164
Investment in joint ventures and associates	785	940
Other investments	1,135	975
Loans and advances to customers	4,723	3,906
Derivative financial instruments	1,532	1,546
Deferred tax assets	49	514
	29,076	32,256
Current assets
Inventories	2,430	2,957
Trade and other receivables	1,607	2,121
Loans and advances to customers	3,819	3,814
Derivative financial instruments	176	153
Current tax assets	15	16
Short-term investments	3,463	593
Cash and cash equivalents	3,082	2,165
	14,592	11,819
Assets of the disposal group and non-current assets classified as held for sale	236	139
	14,828	11,958
Current liabilities
Trade and other payables	(8,568)	(9,922)
Financial liabilities:
Borrowings	(2,826)	(2,008)
Derivative financial instruments and other liabilities	(62)	(89)
Customer deposits and deposits by banks	(7,479)	(7,020)
Current tax liabilities	(419)	(95)
Provisions	(360)	(671)
	(19,714)	(19,805)
Liabilities of the disposal group classified as held for sale	--	(5)
Net current liabilities	(4,886)	(7,852)
Non-current liabilities
Financial liabilities:
Borrowings	(10,711)	(10,651)
Derivative financial instruments and other liabilities	(889)	(946)
Post-employment benefit obligations	(3,175)	(4,842)
Deferred tax liabilities	(135)	(199)
Provisions	(664)	(695)
	(15,574)	(17,333)
Net assets	8,616	7,071
Equity
Share capital	407	406
Share premium	5,095	5,094
Other reserves	(141)	(414)
Retained earnings	3,265	1,985
Equity attributable to owners of the parent	8,626	7,071
Non-controlling interests	(10)	--
Total equity	8,616	7,071

Calculate the following ratios for Tesco, PLC Round all answers to two decimal places. Use a negative sign with ratios below (a. through n. only) when appropriate. Loss in 2015 will cause some ratios to be negative.

	2016		2015
Profitability
a. Return on equity	Answer	%	Answer	%
b. Return on assets-unlevered	Answer	%	Answer	%
c. Return on sales-levered	Answer	%	Answer	%
Leverage
d. Financial leverage	Answer		Answer
e. Total debt-to-equity ratio	Answer		Answer
f. Long-term debt-to-equity	Answer		Answer
Solvency/Liquidity
g. Current ratio	Answer		Answer
h. Quick ratio	Answer		Answer
i. Interest coverage*	Answer		Answer
j. Accounts payable turnover	Answer		Answer
Asset turnover
k. Receivable turnover	Answer		Answer
l. Inventory turnover	Answer		Answer
m. Fixed asset turnover	Answer		Answer
n. Asset turnover	Answer		Answer
* For this calculation, use profit from continuing operations

o. Common-size income statements.

Round to one decimal place. Do not use negative signs with answers below.

TESCO, PLC Group Income Statement For the years ended February 2016 and 2015
	2016	2015	2016	2015
Continuing operations:
Revenue	54,433	56,925	Answer%	Answer%
Cost of sales	(51,579)	(59,128)	Answer%	Answer%
Gross profit	2,854	(2,203)	Answer%	Answer%
Administrative expenses	(1,852)	(2,574)	Answer%	Answer%
Profit on property-related items	44	(973)	Answer%	Answer%
Operating profit	1,046	(5,750)	Answer%	Answer%
Share of post-tax profits of joint ventures and associates	(21)	(13)	Answer%	Answer%
Finance income	29	80	Answer%	Answer%
Finance costs	(892)	(651)	Answer%	Answer%
Profit before tax	162	(6,334)	Answer%	Answer%
Taxation	(54)	(670)	Answer%	Answer%
Profit for the year from continuing operations	216	(5,664)	Answer%	Answer%
Discontinued operations:
Loss for the year from discontinued operations	(87)	(102)	Answer%	Answer%
Profit for the year	129	(5,766)	Answer%	Answer%
Attributed to:
Owners of the parent	138	(5,741)	Answer%	Answer%
Non-controlling interests	(9)	(25)	Answer%	Answer%

p. Common-size balance sheets.

Round to one decimal place. Do not use negative signs with answers below.

TESCO, PLC Group Balance Sheet As of February 27, 2016 and February 28, 2015
	2016	2015	2016	2015
Non-current assets
Goodwill and other intangible assets	2,874	3,771	Answer%	Answer%
Property, plant, and equipment	17,900	20,440	Answer%	Answer%
Investment property	78	164	Answer%	Answer%
Investment in joint ventures and associates	785	940	Answer%	Answer%
Other investments	1,135	975	Answer%	Answer%
Loans and advances to customers	4,723	3,906	Answer%	Answer%
Derivative financial instruments	1,532	1,546	Answer%	Answer%
Deferred tax assets	49	514	Answer%	Answer%
	29,076	32,256	Answer%	Answer%
Current assets
Inventories	2,430	2,957	Answer%	Answer%
Trade and other receivables	1,607	2,121	Answer%	Answer%
Loans and advances to customers	3,819	3,814	Answer%	Answer%
Derivative financial instruments	176	153	Answer%	Answer%
Current tax assets	15	16	Answer%	Answer%
Short-term investments	3,463	593	Answer%	Answer%
Cash and cash equivalents	3,082	2,165	Answer%	Answer%
	14,592	11,819	Answer%	Answer%
Assets of the disposal group and non-current assets classified as held for sale	236	139	Answer%	Answer%
	14,828	11,958	Answer%	Answer%
Current liabilities
Trade and other payables	(8,568)	(9,922)	Answer%	Answer%
Financial liabilities:
Borrowings	(2,826)	(2,008)	Answer%	Answer%
Derivative financial instruments and other liabilities	(62)	(89)	Answer%	Answer%
Customer deposits and deposits by banks	(7,479)	(7,020)	Answer%	Answer%
Current tax liabilities	(419)	(95)	Answer%	Answer%
Provisions	(360)	(671)	Answer%	Answer%
	(19,714)	(19,805)	Answer%	Answer%
Liabilities of the disposal group classified as held for sale	-	(5)	Answer%	Answer%
Net current liabilities	(4,886)	(7,852)	Answer%	Answer%
Non-current liabilities
Financial liabilities:
Borrowings	(10,711)	(10,651)	Answer%	Answer%
Derivative financial instruments and other liabilities	(889)	(946)	Answer%	Answer%
Post-employment benefit obligations	(3,175)	(4,842)	Answer%	Answer%
Deferred tax liabilities	(135)	(199)	Answer%	Answer%
Provisions	(664)	(695)	Answer%	Answer%
	(15,574)	(17,333)	Answer%	Answer%
Net assets	8,616	7,071	Answer%	Answer%
Equity
Share capital	407	406	Answer%	Answer%
Share premium	5,095	5,094	Answer%	Answer%
Other reserves	(141)	(414)	Answer%	Answer%
Retained earnings	3,265	1,985	Answer%	Answer%
Equity attributable to owners of the parent	8,626	7,071	Answer%	Answer%
Non-controlling interests	(10)	-	Answer%	Answer%
Total equity	8,616	7,071	Answer%	Answer%