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In United Kingdom, Tesco plc plays an important role in retail business. According to the report, Tesco has operations varies branch in Europe, US and Asia (Tesco, 2014). There are various determinant and significant reasons why they have become the customers preferred stores and they also has a good analysis of capital structure included in their program to support various original business plan for growth considering they are experts in cash management and financial system just like in a financing company. Tesco has also decided to put up a banking business. The financing department between the two companies has someone shown a very respectful management scheme in most of their business operation, their financial strategies includes equity, debt, financing and mixed capital investment. The following statement below may show their financial performance within the last 5 years of operation.

Tesco is using both equity and debt in order to finance its activities.

Concerning equity, in2013, the company issued 19 million ordinary shares of 0.05p each, while there was no issue of preferred shares. In the end of the year, share capital appears to be £403 million, and total equity attributable to owners of the parent company is £16,661 million, lower than 2012 that total equity raised to £17,801 million. Moreover, there are no shareholders that hold securitiesproviding special rights with regards to controls of the company. Concerning the company’s debt, assuming that the debt component of its capitalization consists of borrowings, derivative financial instruments, post employment benefit obligations, deferred tax liabilities and provisions, total debt was £14,483 million in 2013, increasedapproximately 5.47% from 2012.

Taking into consideration above measurements, debt/equity ratio for 2013 is 87 %, while in2012 it was 77%. Moreover, it can be concluded that capital is structured 53% by shareholdersequity and 46.5% by debt. These percentages were 56.4% and...