Managing Financial Principles And Tecniques Essay

1348 words - 5 pages

UNIT SUMMARY:

The assignment describes the significance of the appropriate financial techniques to accelerate the profitability and productivity in the massive and ideal manner. The unit provides the effective principles and formulas to deal with the finances in the balanced and appropriate manner. Every organization desires to have the significant value in the market and most of the decisions which take the companies to another level based on the financial stability of the companies.

BACKGROUND OF THE ORGANIZATION:
TESCO was founded by Jack Cohen in 1919 and was like a shipment of tea and from tea, the first two alphabets were taken like T.E. in the Stockwell and then putting these all together T.E.S. and then CO was added to that and then it finally became Tesco. The first store was opened in 1929 in Burnt Oak, Edgware, and Middlesex. During the 1950s and 1960s Tesco grew organically and also through the acquisitions after it opened about 800 stores. The spatiality was food and drink but after certain time it diversified into the areas like clothing, electronics, financial services, home, health, car and dental insurance. It also retailing and renting software and became the largest British retailer by both global sales and domestic market share and the most encouraging aspect of this largest retailer is this that the profit exceeded £3 billion, became the third largest global retailer based on revenue after Wal-Mart and Carrefour. Tesco PLC is the largest retailer business which employees 4, 70,000 people and owns over 4340 superstores. The annual sale for the year 2008 was 58.1 million pounds and the sale for year 2009 was 59.4 million pounds. These results show the exact position and health of the organization with the remarkable progress.

The assignment is based on the financial techniques and principles used by Tesco Plc in achieving competitive advantage over their major competitors like ASDA and Sainsbury in the UK.
The CEO of the company is Philip Clarke who took over from Sir Terry Leahy about a year ago.

TASK 1.1: Explain the Importance Of Costs In The Pricing Strategy Of An Organization

Marginal Costs
The MARGINAL costing is the marginal cost explained by Atrill and McLaney (2002), the marginal cost is the variable cost and this can be taken as the direct labour, direct material, direct expenses and the variable part of the over head budgets. The accounting systems in which variable costs are charged to cost units and the fixed costs of the period are written in full against the aggregate contribution. Its special value is in decision making.

Marginal costing are stated and defined as the tool of presenting cost data wherein variable costs and fixed costs are displayed separately for managerial decision-making according to Shiller (2000). This cost should be completely understood that marginal costing is not a criterion of costing like process costing or job costing. But it is simply a method...

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