A.C. 1.1 – Determine how to obtain financial data and assess its validity

The selected company in this assessment is Tesco Plc (Tesco, 2019a).  Founded in 1919 as a British international grocery and general merchandising retail chain its headquarters are in Cheshunt, UK and listed in the London Stock Exchange.  The objectives of Tesco plc is becoming a popular retailer and enhancing the core business in the UK in the non-food items, cultivating retailing facilities. This objective is advanced by their 450,000 staff serving millions of customers weekly in their stores and online platforms. Taking into account the company 2019 financial data, the company financial data is as shown in table 1;

Table 1: A summary of Tesco Company Financial Data

Source: Summarised from Tesco (2019b)

Financial data is sourced from multiple sources, processed differently and consumed by many people. According to Lungeanu et al. (2016) sourcing, the appropriate data at the right time, processing it reliably and correctly and sharing it in a timely fashion with the right people is critical to financial control. In every organisation context, there is always a need for conducting further investigation/analysis to identify the most relevant internal and external sources of data that best fit their operations. This is since it is not all data available that is essential to an organisation or can be generated or get hold of.

Figure 1: Internal and External Sources of Financial Data

In the context of Tesco Plc, the primary source of financial data that is commonly adopted is their accounting system (see figure 1). This is mainly inclusive of the budget and financial statements produced annually. Annually, the organisation accounting department produces monthly management accounts which are represented against the budget. This category of information is used in identifying the achievements of the organisation based on set budgets and the missed targets. This information assists identify the departments that are not making positive contributions to an organisation.  For the internal data, this includes the company house which is inclusive of the overall amount spent in managing the employees. Through the use of variance analysis, it is possible to identify the most appropriate recruitment agencies charging reasonable prices assisting them in increasing profits.

Additionally, when Tesco Plc explores expanding in different markets, data from competitors are always taken into consideration. In this case, database, reports and web data are used in identifying the extent to which their competitors are doing financially. Nevertheless, this information is significantly limited as many entities fear to disclose their financial or performance data.

A.C. 1.4 – Review and question financial data