In the current economic situation facing the country it’s natural to expect that there has been a downturn in performance due to most people feeling the effect of the recession for most of the year, therefore having less disposable income.
The data that has been collected and used will be shown in an appendix at the end.
The company’s debtor days in 2010 has fallen from 12.3 days to 12.1. This shows that the company has made a small reduction to the time it takes to receive payments of customers using credit. To ensure this figure keeps reducing a steady cash flow must be maintained, with money that is owed to them coming into the businesses quickly.
The creditor days for Tesco went from 65.9 days in 2009 to 63.6 days in 2010. From a business point of view this can be viewed as a negative. This is because a higher number means the business has more time to pay its debts to suppliers. With Tesco being such a large organisation this won’t be too much of a problem and it can be put down to the effect of the current economic climate. With companies struggling to afford to pay their debts they will need to claim debtors earlier to help them cope. This problem will be seen throughout the economy.
Inventory cover shows the amount of time inventories are being held in storage not doing anything. The inventory turnover for the company was 19.2 times in 2010, this was an increase on the figure the previous year which was 18.7 times. This increase can be seen as a negative even though the change isn’t that...