University Study

Topics: Stock market, Stock, Financial markets Pages: 8 (2873 words) Published: March 5, 2013
Finance course work
This is a report to demonstrate the financial position of Tesco plc. In performing this report the annual report of Tesco plc. was analysed and carefully reviewed. In addition to this, in order to compare the company’s performance, the financial statement is compared to its closest competitor which is Sainsbury’s. 1. Capital structure

As mentioned in the financial report of Tesco plc the group finances its operations by a combination of retained profits, disposals of property assets, long and medium-term debt capital market issues, short-term commercial paper, bank borrowings and leases. Equity of the Group as at 2011

Type of finance the company may have risen.
Attach one copy of B.S use ratios based on the capital structure and comment Year Tesco Marks & Spencer
Called up share capital402 396
Share premium account 4,896255
Other reserves 40(3851)
Retained earnings 11,197 5873
Equity attributable to owners of the parent 16,535 2673 Non-controlling interests 884
Total equity 16,6232677
Ratios based on capital structure of the two companies
ROCE= Net profit before tax ×100%
Shareholders’ funds

2. Factoring
Explain briefly the meaning of factoring for business; how it is useful for organisation then refer to ur chosen company 3. Working capital
Most important factor in the short-term financial management of companies, discuss with evidence form chosen company 4. Capital market efficiency
Does it imply that all investors know all that there is to know about all securities traded in the market, include discussion, the forms of efficiencies? Any market in which securities are traded is capital market efficiencies. Capital markets include the stock and bond markets. Companies use capital markets to raise money for their investment efficiencies operations. Investors purchase securities in the capital markets in order to extract a return and earn profit on the securities. Efficient market states that all significant information is fully and immediately reflected in a securities market price. Assume an investor will obtain an equilibrium rate of return. In other words, an investor should not expect to earn an abnormal return. Either through technical or fundamental analysis capital market efficiencies, has three forms market hypothesis. a.Weak forms states that stock prices are reflect all past information in prices. b.Semi strong form stock prices reflect all past and current publicly available information. c.Strong form stock prices reflect all relevant information, including information not yet disclosed to the general public information.

An investment that suggests that is impossible to beat the market, because stock market efficiency causes stock prices to incorporate and reflect all relevant information in all cases. According to the EMH, stocks always trade at their fair market value on stock exchanges, making it impossible for investors to purchase undervalued stocks or sell stocks for exaggerated prices. Consequently, it should be impossible to do better than the in general market through market timing, and the only way investors can obtain higher returns is by purchasing riskier investments. Although EMH considered the cornerstone of modern financial theory and it is highly notorious and often is disputed. Supporters argue that it is pointless to search for undervalued stocks or try to predict trends in the market through either fundamental or technical analysis.

5. Brief explanation of terms:
a) Shareholders wealth: Shareholders' wealth is the wealth shareholders get to accrue from their ownership of shares in a firm. Shareholders’ wealth increases by two possible means: either by increase in share prices that bring about capital gain or increase in dividend payments. Knowing this fact, a firm can...
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