AN-190419155824.docx - Running head FINANCIAL REPORTING 1 Financial Reporting Name Institutional Affiliation FINANCIAL REPORTING 2 Q1 Critically assess

AN-190419155824.docx - Running head FINANCIAL REPORTING 1...

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Running head: FINANCIAL REPORTING 1 Financial Reporting Name Institutional Affiliation
FINANCIAL REPORTING 2 Q1 - Critically assess the performance of M&S vs Tesco using the wide range of ratios for the last two years. M&S M&S Liquidity Ratios Current ratio = Current Assets Current Liabilities 1371.2 1882.8 = 0.72 Quick ratio = Quick Assets Current Liabilities 195.2 1882.8 = 0.10 M&S Efficiency ratios Inventory Turnover = Cost of goodssold Average Inventory 4966 837.2 = 5.93 M&S Profitability ratios Return on Equity = Net Income for the year Taxes Interest Shareholder s ' equity 87.9 24 32.7 7417.2 = 0.0042 Tesco Tesco Liquidity Ratios Current ratio = Current Assets Current Liabilities 12570 20680 = 0.60 Quick ratio = Quick Assets Current Liabilities 3373 20680 = 0.16 Tesco Efficiency ratios Inventory Turnover = Cost of goodssold Average Inventory 29912 2617 =11.42 Tesco Profitability ratios
FINANCIAL REPORTING 3 Return on Equity = Net Icome for the year Taxes Interest Shareholder s ' equity 896 216 2 49097 = 0.0138 Analysis The current ratios of the two companies indicate that M&S has a better chance of meeting its short-term liabilities compared to Tesco. This is because a higher Current ratio is an indication

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