I will be evaluating the financial performance and position of a business which will be Tesco using ratio
analysis.
If the economy was to fall into recession, it will impact Tesco’s accounting ratios.
Gross profit to sales
2015= 2,112/48,237 x 100= 4.38%
Gross profit fall by 15%= 1,795,200/41,001,450 x 100=4.38%
4.38% fall by 15%= 3.72%
Net profit to sales 2015 = 9.26%
Net profit in 2015 is 5,766m
Sales in 2015 is 62,284
New net profit = 4,901,100
Sales= 52,941,400
New = 9.26%
15% fall of 9.26= 7.871%
Gearing ratio
Loans = 2,008m
Total assets 2015=44075 – current liabilities = 19,805m = 24,270,000
Loans If increase by 20%= 2,409,600
Total assets by increase of 20%= 52,890,000
Current liabilities by 20%=23,766,000
New= 52,890,000- 23,766,000= 29,124,000
8.27%
analysis.
If the economy was to fall into recession, it will impact Tesco’s accounting ratios.
Gross profit to sales
2015= 2,112/48,237 x 100= 4.38%
Gross profit fall by 15%= 1,795,200/41,001,450 x 100=4.38%
4.38% fall by 15%= 3.72%
Net profit to sales 2015 = 9.26%
Net profit in 2015 is 5,766m
Sales in 2015 is 62,284
New net profit = 4,901,100
Sales= 52,941,400
New = 9.26%
15% fall of 9.26= 7.871%
Gearing ratio
Loans = 2,008m
Total assets 2015=44075 – current liabilities = 19,805m = 24,270,000
Loans If increase by 20%= 2,409,600
Total assets by increase of 20%= 52,890,000
Current liabilities by 20%=23,766,000
New= 52,890,000- 23,766,000= 29,124,000
8.27%
