Tesco's has already turned around many of the T&S convenience stores they bought a year ago.
80 of the 450 outlets have been revamped as Teso express stores
average sales are up by 80 percent' The Gaurdian 26/121/03
Gearing
Teso's 0.25:1
Sainsbury's 0.16:1
M&s 0.28:1
Gearing is a measure of risk when investing in a company
Proportion of capital made up of fixed interest borrowing
The effect of the investments in HIT and T&S over the last 5 years can be seen with the gearing for Tesco's increasing in the relevant year but also fallinf afterwards.
Their latest acquisition has increased the gearing level above that of Sainsbuy's, making it on the face of it more lucratinve for in vestors to invest in Sainsbury's.
Considering the performance of the transformed T&S stores, it however becomes clear that the high level of interest payment on the associated gearing should fall in the short run making Tesco's a good buy for......
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