analysis of two companies ( i have done the whole question but i need more than 1200 words of this solves question, ill provide data and answer i just need more than 1200 words)

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H&V Analysis of TESCO

Appendix 1
Tesco Plc Statement of Income Vertical Trend Analysis Horizontal Trend Analysis
2017 2016 2015 2014 2013 2017 2016 2015 2014 2013 2017 2016 2015 2014 2013
£m £m £m £m £m £m £m £m £m £m £m £m £m £m £m
Revenues 55917 54433 62284 63557 64826 100.00% 100.00% 100.00% 100.00% 100.00% 86.26% 83.97% 96.08% 98.04% 100.00%
Cost of sales -52899 -51629 -64396 -59547 -60737 -94.60% -0.948487131 -1.0339091902 -0.9369070283 -93.69% 87.10% 85.00% 106.02% 98.04% 100.00%
Gross Profit 3018 2804 -2112 4010 4089 5.40% 5.15% -3.39% 6.31% 6.31% 73.81% 68.57% -51.65% 98.07% 100.00%
Distribution & Administrative expenses -1734 -1874 -2695 -1657 -1562 -3.10% -3.44% -4.33% -2.61% -2.41% 111.01% 119.97% 172.54% 106.08% 100.00%
Property disposals -4 14 -985 278 -339 -0.01% 0.03% -1.58% 0.44% -0.52% 1.18% -4.13% 290.56% -82.01% 100.00%
Operating profits 1280 944 -5792 2631 2188 2.29% 1.73% -9.30% 4.14% 3.38% 58.50% 43.14% -264.72% 120.25% 100.00%
Joint venture profits -30 -21 -13 60 54 -0.05% -0.04% -0.02% 0.09% 0.08% -55.56% -38.89% -24.07% 111.11% 100.00%
Finance income 109 29 90 132 177 0.19% 0.05% 0.14% 0.21% 0.27% 61.58% 16.38% 50.85% 74.58% 100.00%
Finance costs -630 -672 -661 -564 -459 -1.13% -1.23% -1.06% -0.89% -0.71% 137.25% 146.41% 144.01% 122.88% 100.00%
Profit before tax 729 280 -6376 2259 1960 1.30% 0.51% -10.24% 3.55% 3.02% 37.19% 14.29% -325.31% 115.26% 100.00%
Taxation -185 -8 657 -347 -574 -0.33% -0.01% 1.05% -0.55% -0.89% 32.23% 1.39% -114.46% 60.45% 100.00%
Profit from continuing operations 544 272 -5719 1912 1386 0.97% 0.50% -9.18% 3.01% 2.14% 39.25% 19.62% -412.63% 137.95% 100.00%
Losses from discontinued operations -37 81 -47 -942 -1266 -0.07% 0.15% -0.08% -1.48% -1.95% 2.92% -6.40% 3.71% 74.41% 100.00%
Profit for the year. 507 353 -5766 970 120 0.91% 0.65% -9.26% 1.53% 0.19% 422.50% 294.17% -4805.00% 808.33% 100.00%
Tesco Plc Statement of Position Vertical Trend Analysis Horizontal Trend Analysis ysis
2017 2016 2015 2014 2013 2017 2016 2015 2014 2013 2017 2016 2015 2014 2013
£m £m £m £m £m £m £m £m £m £m £m £m £m £m £m
Non-Current Assets
Goodwill and other intangible assets 2,717 2,874 3,771 3,795 4,362 5.93% 7% 8.53% 7.57% 8.70% 62.29% 65.89% 86.45% 87.00% 100.00%
Property, plant and equipment 18,108 17,900 20,440 24,490 24,870 39.49% 41% 46.23% 48.82% 49.61% 72.81% 71.97% 82.19% 98.47% 100.00%
Investment property 64 78 164 227 2,001 0.14% 0% 0.37% 0.45% 3.99% 3.20% 3.90% 8.20% 11.34% 100.00%
Investments in joint ventures and associates 739 785 940 286 494 1.61% 2% 2.13% 0.57% 0.99% 149.60% 158.91% 190.28% 57.89% 100.00%
Other investments 1,107 1,135 975 1,015 818 2.41% 3% 2.21% 2.02% 1.63% 135.33% 138.75% 119.19% 124.08% 100.00%
Loans and advances to customers 5,795 4,723 3,906 3,210 2,465 12.64% 11% 8.83% 6.40% 4.92% 235.09% 191.60% 158.46% 130.22% 100.00%
Derivative financial instruments 1,303 1,532 1,546 1,496 1,965 2.84% 3% 3.50% 2.98% 3.92% 66.31% 77.96% 78.68% 76.13% 100.00%
Deferred tax assets 707 49 514 73 58 1.54% 0% 1.16% 0.15% 0.12% 1218.97% 84.48% 886.21% 125.86% 100.00%
Total Non-Current Assets 30,540 29,076 32,256 34,592 37,033 66.60% 66% 72.95% 68.96% 73.88% 82.47% 78.51% 87.10% 93.41% 100.00%
Current Assets
Inventories 2,301 2,430 2,957 3,576 3,744 5.02% 6% 6.69% 7.13% 7.47% 61.46% 64.90% 78.98% 95.51% 100.00%
Trade and other receivables 1,655 1,607 2,121 2,190 2,525 3.61% 4% 4.80% 4.37% 5.04% 65.54% 63.64% 84.00% 86.73% 100.00%
Loans 4,166 3,819 3,814 3,705 3,094 9.09% 9% 8.63% 7.39% 134.65% 123.43% 123.27% 119.75% 100.00%
Financial instruments 286 176 153 80 58 0.62% 0% 0.35% 0.16% 0.12% 493.10% 303.45% 263.79% 137.93% 100.00%
Tax assets 13 15 16 12 10 0.03% 0% 0.04% 0.02% 0.02% 130.00% 150.00% 160.00% 120.00% 100.00%
2,727 3,463 593 1,016 522 5.95% 8% 1.34% 2.03% 1.04% 522.41% 663.41% 113.60% 194.64% 100.00%
Cash and cash equivalents 3,821 3,082 2,165 2,506 2,512 8.33% 7% 4.90% 5.00% 5.01% 152.11% 122.69% 86.19% 99.76% 100.00%
Assets held for re-sale 344 236 139 2,487 631 0.75% 1% 0.31% 4.96% 1.26% 54.52% 37.40% 22.03% 394.14% 100.00%
Total Current Assets 15,313 14,828 11,958 15,572 13,096 33.40% 34% 27.05% 31.04% 26.12% 116.93% 113.23% 91.31% 118.91% 100.00%
TOTAL ASSETS 45,853 43,904 44,214 50,164 50,129 100.00% 100.00% 100.00% 100.00% 100.00% 91.47% 87.58% 88.20% 100.07% 100.00%
Equity and Liabilities
Equity
Share capital –ordinary shares 5p nominal 409 407 406 405 403 0.89% 0.93% 0.92% 0.81% 0.80% 101.49% 100.99% 100.74% 100.50% 100.00%
Share premium 5,096 5,095 5,094 5,080 5,020 11.11% 11.60% 11.52% 10.13% 10.01% 101.51% 101.49% 101.47% 101.20% 100.00%
Reserves 601 -141 -414 -498 685 1.31% -0.32% -0.94% -0.99% 1.37% 87.74% -20.58% -60.44% -72.70% 100.00%
Retained earnings 332 3,265 1,985 9,728 10,535 0.72% 7.44% 4.49% 19.39% 21.02% 3.15% 30.99% 18.84% 92.34% 100.00%
Minority interests -24 -10 0 7 18 -0.05% -0.02% 0.00% 0.01% 0.04% -133.33% -55.56% 0.00% 38.89% 100.00%
Total equity 6,414 8,616 7071 14722 16661 13.99% 19.62% 15.99% 29.35% 33.24% 38.50% 51.71% 42.44% 88.36% 100.00%
Non-Current Liabilities
Borrowings 9,433 10,711 10,651 9,303 10,068 20.57% 24.40% 24.09% 18.55% 20.08% 93.69% 106.39% 105.79% 92.40% 100.00%
Financial instruments 607 889 946 770 759 1.32% 2.02% -145.65% 1.53% 1.51% 79.97% 117.13% 124.64% 101.45% 100.00%
Post-employment benefit obligations 6,621 3,175 4,842 3,193 2,378 14.44% 7.23% 10.95% 6.37% 4.74% 278.43% 133.52% 203.62% 134.27% 100.00%
Deferred tax 88 135 199 594 1,006 0.19% 0.31% 0.45% 1.18% 2.01% 8.75% 13.42% 19.78% 59.05% 100.00%
Liabilities of assets held for resale 171 1 5 1193 282 0.37% 0.00% 0.01% 2.38% 0.56% 60.64% 0.35% 1.77% 423.05% 100.00%
Provisions 685 664 695 183 272 1.49% 4.26% 4.01% 1.20% 1.84% 251.84% 244.12% 255.51% 67.28% 100.00%
Total Non-Current Liabilities 17,605 15,574 17,338 15,236 14,765 1.49% 4.26% 4.01% 1.20% 1.84% 119.23% 105.48% 117.43% 103.19% 100.00%
Current Liabilities
Trade and other payables 9,199 8,568 9,922 10,595 11,094 20.06% 19.52% 22.44% 21.12% 22.13% 82.92% 77.23% 89.44% 95.50% 100.00%
Borrowings 2,560 2,826 2,008 1,910 766 5.58% 6.44% 4.54% 3.81% 1.53% 334.20% 368.93% 262.14% 249.35% 100.00%
Financial instruments 61 62 89 99 121 0.13% 0.14% 15.88% 0.20% 0.24% 50.41% 51.24% 73.55% 81.82% 100.00%
Customer deposits and deposits by banks 8,963 7,479 7,020 6,858 6,015 19.55% 17.03% 15.88% 13.67% 12.00% 149.01% 124.34% 116.71% 114.01% 100.00%
Current tax liabilities 613 419 95 494 519 1.34% 0.95% 0.21% 0.98% 1.04% 118.11% 80.73% 18.30% 95.18% 100.00%
Provisions 438 360 671 250 188 0.96% 0.82% 1.52% 0.50% 0.38% 232.98% 191.49% 356.91% 132.98% 100.00%
Total current Liabilities 21,834 19,714 19,805 20,206 18,703 47.62% 44.90% 44.79% 40.28% 37.31% 116.74% 105.41% 105.89% 108.04% 100.00%
Total Liabilities 39,439 35,288 37,143 35,442 33,468 86.01% 80.38% 84.01% 70.65% 66.76% 117.84% 105.44% 110.98% 105.90% 100.00%
TOTAL EQUITY AND LIABILITIES 45,853 43,904 44,214 50,164 50,129 100.00% 100.00% 100.00% 100.00% 100.00% 91.47% 87.58% 88.20% 100.07% 100.00%
Capital Employed 19,075 23,104 20,765 26,804 28,375

ratio of TESCO

RATIO FORMULA 2017 2016 2015 2014 2013
Profitability Ratio
ROCE PBIT/ Cap employedX100 % 6.7% 4.1% -27.9% 9.8% 7.7%
PBIT/T ASSETSX100 % 2.8% 2.2% -13.1% 5.2% 4.4%
ASSET TURNOVER REVENUE/T ASSET X 1.22 1.24 1.41 1.27 1.29
NET PROFIT MARGIN PBIT/REVENUEX100 % 2.3% 1.7% -9.3% 4.1% 3.4%
GROSS PROFIT MARGIN GROSS P/REVENUEX100 % 5.4% 5.2% -3.4% 6.3% 6.3%
EEFICIENCY RATIO
RECEIVABLE COLLECTION PERIOD TRADE RECEIVABLE/REVENUEX365 days 10.80 10.78 12.43 12.58 14.22
PAYABLE PAYMENT PERIOD TRADE PAYABLE/COST OF SALESX365 days 63.47 60.57 56.24 64.94 66.67
INVENTORY TURNOVER PERIOD CLOSING INVENTORY/COST OF SALESX365 days 15.88 17.18 16.76 21.92 22.50
LIQUIDITY RATIO
CURRENT RATIO CURRENT ASSETS/CURRENT LIABILITY X1 0.70 0.75 0.60 0.77 0.70
ASSET TEST RATIO CURRENT ASSETS- INVENTORIES/CURRENT LIABILITY X1 0.60 0.63 0.45 0.59 0.50
GEARING RATIO
GEARING FIXED INTEREST CAPITAL/CAPITAL EMPLOYEDX100 0% 66.37% 62.71% 65.95% 45.08% 41.28%
INTEREST COVERAGE RATIO PBIT/INTEREST EXPENSIVE X 2.03 1.40 -8.76 4.66 4.77

MORRISONS Ratio

Profitability ratios 2017 2016 2015 2014 2013
Return on Shareholders Funds (%) 8.00 5.78 -22.04 -3.75 16.81
Return on Capital Employed (%) 5.34 3.41 -11.49 -2.24 10.73
3.63 2.38 -8.64 -1.64 8.35
Profit margin (%) 1.99 1.35 -4.71 -1.00 4.85
Gross margin (%) 3.70 3.83 4.53 6.07 6.66
Berry ratio (x) 2.92 1.67 0.58 0.92 3.82
EBIT margin (%) 2.87 1.95 -4.14 -0.54 5.24
EBITDA margin (%) 5.04 4.32 4.79 4.75 7.25
Operational ratios
Net Assets Turnover (x) 2.68 2.53 2.44 2.25 2.21
Fixed Assets Turnover (x) 2.10 2.07 2.12 1.90 1.97
Interest Cover (x) 3.03 2.94 -6.54 -1.02 12.72
Stock Turnover (x) 26.57 26.17 25.56 20.75 23.20
Debtors Turnover (x) 119.10 122.14 94.47 98.22 107.83
Debtor Collection (days) 3.06 2.99 3.86 3.72 3.38
Creditors Payment (days) 47.56 38.26 30.32 29.65 30.24
Structure ratios
Current ratio (x) 0.41 0.48 0.54 0.50 0.57
Liquidity ratio (x) 0.20 0.25 0.25 0.20 0.24
Shareholders liquidity ratio (x) 2.01 1.44 1.09 1.48 1.77
Solvency ratio (Asset based) (%) 45.38 41.22 39.21 43.73 49.68
Solvency ratio (Liability based) (%) 83.09 70.11 64.49 77.72 98.74
Asset Cover (x) 5.78 4.55 3.66 4.33 4.40
Gearing (%) 49.86 74.84 92.13 79.22 57.65
Per employee ratios
Profit per employee (unit) 2,892 1,795 -6,612 -1,381 6,830
Turnover per employee (unit) 145,214 133,336 140,393 138,772 140,756
Salaries/Turnover 11.80 12.06 11.72 11.15 10.75
Average Remuneration per employee (unit) 17,132 16,078 16,447 15,478 15,128
Shareholders Funds per employee (unit) 36,159 31,064 30,006 36,828 40,636
Working Capital per employee (unit) -12,237 -7,791 -4,684 -3,171 -4,289
Total Assets per employee (unit) 79,678 75,368 76,533 84,213 81,792