terms of profitability, figures from the income statement are used, showing that profit margins at Tesco have been falling. Tesco has seen margins decline largely down to more intense price competition within the supermarket sector. These apparent ‘price wars’ have been showing that supermarkets are trying harder to retain customers.
In terms of efficiency, falling store sales have an impact on the return on assets given that the same assets and so Tesco’s stores are generating fewer sales. This may be noted as a reason to the cut in capital expenditure, with Tesco looking to improve the efficiency of current assets before it spends adding more stores to its portfolio. with the retailer, along with Sainsbury’s both announcing job cuts and store closures.
In terms of liquidity.