Build on this by analyzing ethical issues in finance faced by the firm. This will require research on the company from sources such as Business Week, The Wall Street Journal, Fortune, The New York...

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Build on this by analyzing ethical issues in finance faced by the firm. This will require research on the company from sources such as Business Week, The Wall Street Journal, Fortune, The New York Times, the L.A. Times, etc. Choose only high-quality sources, i.e., either peer-reviewed journals or industry magazines with strong editorial standards. Find at least five sources to use in the last section of your paper, "ethical issues faced by the firm."



Before the ethics section, though, develop analyses of the following, each in its own fully developed paragraph (one-half to one page each): capital structure (common- and preferred-stock, bonds, leasing); dividends; working capital; international finance issues; cash flow; AR and inventory; and short-term financing issues.



Finally, after the ethics section, make concluding remarks summarizing your assessment of major strengths and weaknesses of the firm, and your recommendations to management of improvements.

Answered Same DayDec 07, 2021

Answer To: Build on this by analyzing ethical issues in finance faced by the firm. This will require research...

Abhishek answered on Dec 10 2021
141 Votes
Running Head: CORPORATE FINANCE                            1
CORPORATE FINANCE                                    6
CORPORATE FINANCE
Table of Contents
Ethical Issue faced by Tesco    3
Effects on the Firm    3
Strength and Wea
knesses of the Firm    4
Recommendations    5
References    6
Ethical Issue faced by Tesco
Tesco had one of the biggest accounting scandals of the decade. Tesco overstated their profits by two hundred and fifty million pounds. This overestimate due to internal and external pressures the company was facing at the time. The company made an agreement with suppliers, promising them, the benefits and bonus payments (Anderson, 2014). The payments that resulted from this were recorded under different time spans to make it look like the company was having a steady cash flow despite the decline in sales.
The company in many cases had to pay the suppliers back and this decreased their already depleting capital. The company was also withholding money from suppliers in order to boost their performance (Anderson, 2014). They manipulated their business costs as well to show an increase in their profits. The whistle blower of this operation was Mr. Amit Soni, an accountant for Tesco.
The CEO then launched a full-blown investigation, which was then made public and this caused the Tesco shares to drop eleven percent, which is the lowest it has ever been. The four perpetrators were then tried in court and two of them were found not guilty (Anderson, 2014). The scandal was caused by a manipulation of suppliers’ data to show an increase in the profit of the company.
Effects on the Firm
Tesco had to pay hundred and twenty nine million pounds to the serious fraud office and eighty five million as compensation to the investors. A new auditor company was brought in to replace the previous one, who was suspected...
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