The accounting scandal that has engulfed Tesco PLC is very complex. A hole of £263million that was due to an accounting overstatement.

One has to keep things in context, and by looking at the finances, one can see the scale of Tesco.

[http://www.tescoplc.com/index.asp?pageid=188&newsid=1074]

Sales of £34 billion that was a drop of 4.4% year on year.
What is interesting is the profits at Tesco Bank, that was £102 million, while the actual UK stores delivered total profit of £499 million

The annual report gives a more granular breakdown
[http://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf]

page 71 is the balance sheet.

The liabilities are the interesting items

£10,595 million of Trade and other payables. This is what Tesco owes to its trade suppliers, from gas and electric to the goods on the shelves that it gets on credit from its suppliers. These are short term liabilities where Tesco has to pay its suppliers within perhaps 30-90 days.

£9,303 million on financial borrowings, such as loans and bonds issued.

£3,193 million in pension liabilities

Now with the deterioration in trading (sales) at Tesco it means that its credit status is potentially under threat, and one can see that it has vast sales of over £34 billion, but with debts totalling over £20 billion, Tesco has to do something to return to strong profitability, to meet all its liabilities.