Marks And Spencer Business Analysis

Question 1: Marks and Spencer is a leading retailer in UK. It is famous for its quality product and food. As a new finance director I excite been asked by the executive board of the connection to analyse the fiscal and non fiscal performance of the attach to of break two categorys and rumourmonger on them. So I will analyse and input foretell on the financial and nonfinancial performance of Marks and Spencer for financial course of study 2006/7 and 2007/8. Financial performance: To analyse the go withs financial performance, first I get down to animate into the various financial balances. In this analysis I have used eight ratios. They are as follows: Liquidity Ratios: 1. genuine ratio: The current ratio of the high society for year 2006/7 was 0.527 and for year 2007/8 was 0.594 which was 12.7% less than the previous year. It means that M& vitamin A;Ss ability to pay its bills is not too towering and if there is a big crisis of money arise the company will be in trouble. But as M&type A;S is a retailer and most of its sales agreement is cash sale low liquidity is not a big factor. 2. Quick ratio: The quick ratio for year 2006/7 was 0.268 and for year 2007/8 was 0.348 which was 29.85% more than previous year. The bank bill between current and quick ratio says that M&S has a large inventory which is not a problem as most of them can be intimately liquidated.

Financial Gearing Ratios: 1. Debt ratio: The debt ratio of the company in 2006/7 was 0.69 which summationd to 0.73 in 2007/8. It was an increase of 5.8 %. In 2007/8 decrease asset increase by 33% whereas total liabilities change magnitude by 39%. Thats why th e debt ratio rose. 2. Debt to lawfulne! ss ratio: In 2006/7 it was 2.26 and 2.65 in 2007/8. The increase was 17.25%. This is kind of high gearing and has gone higher in last year. The total debt for 2007/8 rose about 39% which increased the gearing. Companys huge capital consumption is a reason for this. 3. Interest coverage: In 2006/7 pursuance cover was 7.55 times and in 2007/8 it was 8.7 times which 15.2% is...If you requirement to get a full essay, order it on our website: OrderEssay.net

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