Accounting assignment Essay Example | Topics and Well Written Essays - 2000 words - 1

Accounting assignment - Essay Example In particular, the financial ratios of WM Morrison (or â€Å"Morisson†) will be compared with Tesco. To further enhance analysis, of each of the four groups of ratios will be examined in rations to each other by taking consideration of the viewpoints of all corporate stakeholders. Tesco PLC is an international retailer, having a wider customer base than competitors that may just be operating in Britain. An international scope of business may be readily seen in its having higher amount of investments in terms of total assets as against competitors, which is of course matched by either total equity, or total liabilities or both. The typical local retailer in Britain is Morisson (WM Morisson, 2014a) which will be compared latter with Tesco on the assumption that the amount of investment could influence the level of profitability, liquidity and even investment rations. The company’s retailing business and associated activities could be found in the United Kingdom, the Republic of Ireland, the United States, Malaysia, Thailand, Slovakia, South Korea, India and Turkey (Reuters, 2014b) The different ratios for analysis will analyse how Tesco has performed financially for the past four years and how it differs from those of its competitors on the average, of which one them in particular is WM Morisson. Performance is basically measured from the data taken from the income statements. The said income statement contains the essentially the revenues and expenses. The excess of revenues over expenses is called net income so that a profitable company should be able to have more revenues over that of expenses (Lee, 200; Pagach, et al; 2006; Porter and Norton, 2010). In this section however, the net income of the company would have viewed in relation to the figures coming from the balance sheet which include the total assets and total equity. When net income is related to