Ahold versus Tesco–Analyzing Performance Harvard Case Solution & Analysis

It comes to understanding and comparing the performance of two leading retailers-Ahold and Tesco. The case introduces the tools and change Dupont Dupont decomposition. While the performance is measured by return on equity was the same for both companies, Ahold had significantly better performance of the stock market compared to Tesco. Ahold also has a substantial amount of cash on the balance sheet results in a low level of net debt. The case requires students to analyze the performance using the modified Dupont decomposition methods to assess if the firm performance as a result of operating profitability and financial leverage, and then propose a strategy to improve performance. To perform the decomposition of changes in Dupont, students learn how to reformat and condensed balance sheet and income statement separately measure the profitability generated from operating activities and financing activities. Students will also see how the excess cash holdings may inhibit profitability and what factors must maintain an appropriate level of leverage for the company. "Hide
by Suraj Srinivasan, Penelope Rossano Source: Harvard Business School 11 pages. Publication Date: September 18, 2012. Prod. #: 113040-PDF-ENG

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