Tesco Plc are a group of companies that was founded in 1920 in London The abovementioned four different divisions operate as stand alone investment centres and are managed by four different teams The group pays 20 corporation Tax on its Profit It also paid an after tax dividend of 10m in 2020 and 2021 Any profits left over after paying taxation and dividends are added to the opening bank balance and this is rolled forward The management decided to invest 20 of the y2021 cash flow bank balance in either one or two divisions The figure should be rounded to the nearest whole 10,000 The balance can be split in half or in any range of weighting The Board of Directors have the following target returns for the global firm i) ROCE Target 10 ii) Net Profit 35 and iii) Asset Turnover 0 4 times Part of their audited reports are presented in the table below All sales and costs are in 000 TESCO TESCO Retail UK TESCO Retail Ireland TESCO Retail Central Europe Tesco Bank Tesco Group PLC 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 000 000 000 000 000 000 000 000 000 000 Output in Units 85 000 70 000 10 000 9 000 9 000 7 000 7 000 6 000 Sales 90 000 70 000 25 000 23 000 8 000 7 000 7 800 6 700 130 800 106 700 Variable Costs 20 000 18 000 6 000 5 000 2 500 1 500 1 800 1 600 30 300 26 100 Fixed Costs 20 000 20 000 16 000 16 000 5 000 5 000 5 000 5 000 46 000 46 000 Average Capital Value 180 000 180 000 80 000 80 000 9 000 9 000 7 500 75 000 276 500 344 000 Calculate and evaluate the comparative financial performance of the four divisions and implications for Tesco Group plc as a whole Without doing further calculations, comment on the relevant performance measures calculated in Q1 and discuss whether there are more ratios that could help you evaluate a divisions performance Highlight positive and negative points that relate to the ratios discussed and calculated in Q1and Q2

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Sep 28, 2024

Tesco Plc are a group of companies that was founded in 1920 in London. The abovementioned four different divisions operate as stand-alone investment centres and

Tesco Plc are a group of companies that was founded in 1920 in London. The abovementioned four different divisions operate as stand-alone investment centres and are managed by four different teams. The group pays 20% corporation Tax on its Profit. It also paid an after-tax-dividend of 10m in 2020 and 2021. Any profits left over after paying taxation and dividends are added to the opening bank balance and this is rolled forward. The management decided to invest 20% of the y2021 cash flow bank balance in either one or two divisions. The figure should be rounded to the nearest whole 10,000. The balance can be split in half or in any range of weighting. The Board of Directors have the following target returns for the global firm i) ROCE Target 10% ii) Net Profit 35% and iii) Asset Turnover 0.4 times. Part of their audited reports are presented in the table below. All sales and costs are in 000:

TESCO	TESCO Retail UK		TESCO Retail Ireland		TESCO Retail Central Europe		Tesco Bank		Tesco Group PLC
	2021	2020	2021	2020	2021	2020	2021	2020	2021	2020
	000	000	000	000	000	000	000	000	000	000
Output in Units	85.000	70.000	10.000	9.000	9.000	7.000	7.000	6.000
Sales	90.000	70.000	25.000	23.000	8.000	7.000	7.800	6.700	130.800	106.700
Variable Costs	20.000	18.000	6.000	5.000	2.500	1.500	1.800	1.600	30.300	26.100
Fixed Costs	20.000	20.000	16.000	16.000	5.000	5.000	5.000	5.000	46.000	46.000
Average Capital Value	180.000	180.000	80.000	80.000	9.000	9.000	7.500	75.000	276.500	344.000

Calculate and evaluate the comparative financial performance of the four divisions and implications for Tesco Group plc. as a whole.
Without doing further calculations, comment on the relevant performance measures calculated in Q1 and discuss whether there are more ratios that could help you evaluate a divisions performance. Highlight positive and negative points that relate to the ratios discussed and calculated in Q1and Q2.