The case relates to the understanding and comparing the performance of two leading trading company Ahold and Tesco. The case provides the tools of Dupont and Dupont Modified decomposition. While performance is measured by the return on equity for the two companies has similar, Ahold had significantly better performance of the equity markets compared to Tesco. Ahold also has a substantial amount of cash in the balance sheet at the lower net debt. The case must perfo students analyze … Read more »

The case relates to the understanding and comparing the performance of two leading trading company Ahold and Tesco. The case provides the tools of Dupont and Dupont Modified decomposition. While performance is measured by the return on equity for the two companies has similar, Ahold had significantly better performance of the equity markets compared to Tesco. Ahold also has a substantial amount of cash in the balance sheet at the lower net debt. The case requires students to analyze the performance Using modified Dupont decomposition techniques to assess whether Suggest corporate performance from operating profitability or financial leverage due and strategies to improve performance. To make the change Dupont decomposition, the students learn to format and consolidate the balance sheet and profit and loss account separately to measure profitability from operations and financing activities. Students also see how excess cash holdings can press return and what factors should drive the appropriate level of leverage for a firm.
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Suraj Srinivasan
Penelope Rossano
Source: Harvard Business School
11 pages.
Release Date: 18, September 2012. Prod #: 113040-PDF-ENG
Ahold against Tesco – Analysis of Performance HBR case solution