Are Large Firms More Profitable?

The aim of this investigation is to compare company accounts to determine who makes the most profit and who is the most efficient. I will be comparing Safeway’s with Tesco’s. They are supermarkets who provide both goods and services, for example food, fuel, banking and insurance. I will also be comparing the accounts of British Airways and EasyJet; these two companies are in the air travel business, they only provide a service. I have chosen to compare two sets of company data, because I believe that it will make my experiment more accurate.

With each comparison I have chosen one large and one smaller, but still competitive, firm. This is so that I can determine whether large firms are more profitable or not. I predict that the smaller firms will be more efficient, this is because they will need to use their assets more wisely and because a larger firm has money going in to lots of different areas so it is less efficient. However I believe that the larger firms will be more profitable as they have already established themselves in the market and have experience.

They are also recognised by more people, and are therefore more likely to be chosen over the smaller competition. Tesco was established in 1924 and it is now also a supermarket, which offers a very similar range of products to Safeway’s. Over the last few years Tesco have dramatically increased in size and are now one of the biggest supermarkets. Tesco employs 221,000 people and have 1,982 stores all over England. Tesco cover a wide range of products and services including insurance and banking.

Safeway’s is a supermarket; they have shops covering the whole of England. Sainsbury’s do not only sell food but also a wide range of products such as CD’s, stationary, books, and now they are even providing insurance and banking. They are on average cheaper than Tesco however as they are smaller they have fewer products to offer. British Airways (BA) offer transport by air all over the world they try to offer good quality flights. They are a very highly rated company, and that is shown in the prices.

They are the UK’s largest international scheduled airline, flying to over 550 worldwide destinations. Easyjet, like BA, provides the service of air transport, however they offer value for money, meaning that you have to sacrifice comfort and convenience. They are much smaller and younger than BA. The next 2 pages are the Tesco balance sheets/profit and loss accounts that I got the relevant data off, I got them from “Bized. ac. uk”.

Bibliography:

* www.bized.ac.uk – Web-site

* Analysing Accounts worksheet by BP educational services – Worksheet

* Business Studies for GCSE by Rene Hugget. – Textbook

* Nuffield-Bp Business and Economics for GCSE – Textbook