• Income Statement:
  • Sales Revenue: £58,765 million
  • Cost of Goods Sold: £45,678 million
  • Gross Profit: £13,087 million
  • Operating Expenses: (£10,543 million)
  • Net Income: £2,544 million
• Balance Sheet (as of December 31, 20XX):
  • Assets (£):
    • Cash and Cash Equivalents: £987 million
    • Inventories: £3,456 million
    • Property, Plant and Equipment: £21,543 million (Net of Accumulated Depreciation)
    • Total Assets: £54,765 million
  • Liabilities & Equity (£):
    • Trade and Other Payables: £8,765 million
    • Borrowings: £11,234 million
    • Total Liabilities: £20,999 million
  • Equity (£):
    • Share Capital: £5,432 million
    • Retained Earnings: £27,334 million
    • Total Equity: £32,766 million
  • Total Liabilities & Equity: £54,765 million
• Additional Information:
  • Tesco PLC declared and paid dividends of £678 million during the fiscal year.
  • Depreciation expense for the year amounted to £1,234 million.
  • The corporate tax rate applicable to Tesco PLC is 17%.

Requirements:

a. Calculate Tesco PLC's:

i. Current Ratio - Evaluate Tesco PLC's ability to pay its short-term liabilities with its short-term assets.

ii. Quick Ratio - Assess Tesco PLC's liquidity position, excluding inventory from its current assets.

iii. Return on Investment (ROI) - Determine the return Tesco PLC generates from its investments relative to its cost of investment.

b. Discuss the implications of these ratios on Tesco PLC's financial stability and operational efficiency.