Imagine that you are a fund manager working for a major multinational firm. You are in charge of the decision on whether your clients should invest in Tesco PLC, a major supermarket chain in the UK and in Europe. You have been given the valuation report of Tesco PLC for 2011. Your specific tasks are the following:
(a) Using financial ratios derived in the valuation report decide on the financial stability and growth potential of Tesco PLC.
(b) Evaluate the weaknesses of using financial ratios in determining investment decisions of companies. Also, construct your own investment measures through the use of further reading to determine the financial condition of Tesco PLC.
(c) Given your research in (a) and (b) decide on whether you should invest in Tesco PLC. In your answer compare Tesco PLC with other alternative forms of investment.
The question belongs to Finance and it discusses about review of valuation report of Tesco PLC with the help of financial ratios and determine the financial stability, growth potential and financial weaknesses of Tesco PLC.
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