Operations Management in Tesco Essay

IntroductionIn this assignment we will look at trey aspects of operations caution, which be Finance, human resource and information technology at an organisation. To understand the concepts better we eat up selected the case of Tesco Plc., UK. PART A Managing Finance pecuniary management is a very beta voice of the operation management at a play a foresighted. The role of the monetary management at the participation is to purposefully management the financial resources present the performance of the organisation in financial terms. (Brigham E.F. and Ehrhardt M.C., 2010) The financial management has to get the required capital required for achievement of strategic and tactical objectives at a low cost. The financial management has to anticipate the financial result and maintain the financial chemical equilibrium as per the companys needs. Information received by the Financial Management at TescoThe information that is of importance to the financial management of Tesco is * The investment cost of the property on the capital market. * Thecurrent rates of ex falsify that ar public in the market and short term interests rates that s prevalent in the monetary markets. * The financial management synthesises information that provides new investment opportunities available to the company. The financial management tries to propose innovation in the financial field with the help of new financial instruments that are available in the market.Decisions taken by Financial Management of Tesco Plc.Based on the information, the financial management has to make exact purposes regarding finance of the company * The financial management has to take decagons on the interest rates at which the company is willing to take loans. * It has to predict the future cash flow needs of the company. * The company has to make decision on the long term debt and short term loans while also making decision on the issue of shares and the option of self-financing. * The management h as to make decision on the risk management technique to be adopted along with the financial impacts of the project that the company has undertaken on the financial wellness of the company.Role of Financial Institutions in Financial Decision MakingFinancial institutions are responsible for distributing financial resources to the users in intend manner. (Mondy R.W., 2009) There are distinct financial institutions in the market that specialise in collecting specie as well as lending it to contrary organisation to carry out their projects. The examples of financial institutions accommodate banks, credit unions, asset management firms, building societies and stock brokerages. The financial institution can be categorise as* Deposit Taking Institutions* Finance and Insurance Institutions* Investment Institutions* Pensions providing institutions* Risk management institutionsWhile thither are goernment financial agencies who assigned to carry out the regulatory and supervisory functio n of different other institutions. The financial institutions have been integral in satisfying the financial andmanagement needs of different industries and this has also shaped the national economic scene. Deposit taking institution are mainly bear on with accepting deposits, providing commercial loans, real estate loans, mortgage loans and issuing share certificates. The finance companies provide loans, document financing and indirect consumer base, the companies gets funds form these institutions thorough the issue of bonds and other obligations. The insurance companies have create an integral part of a companys financial obligations.The insurance companies also provide a different investment options and also provide loans for a number of purposes. The financial institutions such as stock, exchanges, commodity markets, futures, currency and options exchange are involved in creating and providing suffererships for financial claims. (Mondy R.W., 2009) These financial instituti on mange price change risks and maintain liquidity in the market. Through the various instruments the institutions provide investment opportunities and help businesses to generate funds for various purposes. The various investment banks are responsible for a number of financial activities such as underwriting securities, selling securities to investors, providing brokerage services and providing fund raising advice.Analysis of the Financial Statement of Tesco Plc.The financial teaching is periodic documents that are published by companies to show the companys financial performance. The information from financial statement is important for internal and external purposes. The financial statements are used by the employees and management for their own information about the company while the manager use tit to plan future activities and match performances of departments in financial terms. The statements can also be sued to compare with other companys statement to compare the perform ance on a macroeconomic level. A financial abatement mainly consists of 4 main components which are poise sheets, profit and loss account, cash flow statements and income statement. Each component has different function which can be lined out as Balance Sheets It provides the financial situation of the company as a whole. It records the tangible and intangible goods that the company owes or owns.The three categories in a balance sheet are assets, liabilities and shareholders equity. The assets are basically categorised in to current assets, fixed assets and otherassets. The liabilities percentage of the balance sheet consists of current liabilities and long term liabilities. The shareholders equity represents the net worth of the company. In balance sheet, the shareholders equity is calculated as the sum of liabilities and net worth. Profit and Loss cipher it summarizes the incomes and expenses of a company in a given period of time. This includes accruals which are incomes that will be effected only after the particular profit and account was prepared.Cash Flow Statements These statements are very important to predict the future flow of finance in the company. The cash flow statement is concerned with spirit if there is enough money for all the activities and expenses of the company and stands as a good measure for a companys liquidity. Income Statement The income statements are used to measure the companys sales and expenses over a specific period of time. They are prepared at the end of each financial course and shows the results of the operation of the company I the given time. The financial health of the company will also be analysed using Ratio Analysis, The Analysis of Financial Performance of TescoFinancial statement analysis is concerned with divulge the strengths and weaknesses of the companys finances and establish the relationship between the different financial statements. Tools and Techniques There are various tools and techniques that ha ve been identified to conduct financial analysis. The tools and techniques are categorised in to (Brigham E.F. and Ehrhardt M.C., 2010)* Horizontal and unsloped Analysis The horizontal analysis is the comparison of two or more financial data. It represents the changes between eld in both monetary and percentage form. While Vertical analysis is concerned with the preparing ad presenting ballpark sized statements. * Ratios Analysis The ratio analysis is considered to be the most powerful toll for analysing the financial health of the company, ratio simply means one number expressed in terms of the other. There are many forms of ratio analysis satisfying different functions which are profitability ratios, liquidity ratios, activity ratios, long term solvency ratios and leverage ratios. Table 1) Financial Ratio of Tesco Plc.Ratio/ Year 2009 2010 2011Gross Profit brim 7.6% 7.8% 8%Operating Profit Margin 5.91% 5.88% 6.07%Return on Assets 7.06 4.69 5.08 Return on Capital occupied 7. 06 4.68 5.07Current Ratio