Tesco made less profit??

Question

I have found that the ROCE(return of capital employed) of Tesco is less than the previous year..But they say they have made a profit,,,how?and how will i critically analyze ROCE??help plzzz

Answer 1

Best Answer - Chosen by Asker

A company is taxed on their profit - if they have any common sense whatsover, before the end of tax year they spend what profit they have already accrued, thus benefiting the company in the form of assets and being free from tax.

Take Farmfoods - their declared profits dropped each year, but that was because the owner - Eric Herd- was spending big before April.

Asker's Rating:

Asker's Comment:

Thank you was really informative,,But Gumption, Is Tesco hiding anything from Media about how they r making profit?I have found out that they are not so good with their suppliers,,are there any other issues like this?