ACCOUNTING ANALYSIS

Marks & Spencer Group PLC - United Kingdom

Marks & Spencer Group PLC - United Kingdom

Introduction

Marks & Spencer is a UK based company which has headquartered in Westminster city. The main business of Marks & Spencer is selling the garments and clothing along with food items that are considered to be luxury items. We will be analysing the financial statements for the year ended 2012. As a shareholder it is very important that one must know how to analyze the financial statement of the company so that future decisions of investments can be made. Marks & Spencer is a listed company of London Stock Exchange. Marks & Spencer started to make its reputation in 20th across the United Kingdom for policy of selling the items that are made in Britain only. They also sold the food and clothing under the brand name of St Michael. If we see to the financial history of Marks & Spencer we will observe that in the mid 2008 the share prices of Marks & Spencer started to fall and reached almost the half of its value. The company changed its reporting policy from 52 week to 53 weeks in around March 1999. Marks & Spencer initiated “Plan A” which augmented its environmental sustainability (Chandra, 2011, P. 56).

To compare and get better understanding of the financial position of M&S we will compare the company with its previous record for this we have taken the financial statements of five years of M&S. It will help us as a shareholder to analysis the financial position of the company in a much better way. We will be able to focus more on its current financial position. Comparing the company's with its previous condition help the shareholder to determine whether the company is going towards the achievements of its goals and objectives or away from it (Correia, 2007, P. 1).Income Statement of Marks & Spencer

Report Date

03/31/2012

04/02/2011

04/03/2010

03/28/2009

03/29/2008

Currency

GBP

GBP

GBP

GBP

GBP

Scale

Thousands

Thousands

Thousands

Thousands

Thousands

Revenue

9,934,300

9,740,300

9,536,600

9,062,100

9,022,000

Cost of sales

(6,179,100)

(6,015,600)

(5,918,100)

(5,690,200)

(5,535,200)

Gross profit

3,755,200

3,724,700

3,618,500

3,371,900

3,486,800

Selling & marketing expenses

-

-

(2,216,600)

(2,074,400)

(1,912,700)

Selling & administrative expenses

(3,021,900)

(2,959,700)

-

-

-

Administrative expenses

-

-

(614,900)

(570,100)

(534,500)

Other operating income

76,700

59,900

56,900

41,500

49,700

Non-GAAP adjustments to underlying profit

(63,500)

12,000

-

-

-

Profit (loss) on property disposals

-

-

8,100

6,400

27,000

Exceptional costs

-

-

-

(135,900)

-

Exceptional pension credit

-

-

-

231,300

95,000

Operating profit

746,500

836,900

852,000

870,700

1,211,300

Bank & other interest receivable

7,100

4,700

2,100

14,600

5,500

Pension finance income (net)

25,600

37,600

10,800

35,400

58,900

Fair value movement on financial instrument

15,600

-

-

-

-

Finance income

48,300

42,300

12,900

50,000

64,400

Fee payable on the transfer of derivative assets to the pension fund

-

(8,500)

-

-

-

Premium on repurchase of debt

-

-

(13,500)

-

-

Interest on bank borrowings

(5,500)

(7,700)

(7,100)

(6,200)

(1,600)

Amortization of issue costs of bank loans

-

-

-

-

(300)

Interest payable on syndicated bank facility

(3,000)

(1,800)

(5,900)

(41,000)

(30,000)

Interest payable on medium-term notes

(126,400)

(126,900)

(117,900)

(113,900)

(84,000)

Interest payable on finance leases

(700)

(4,200)

(5,300)

(4,900)

(3,400)

Fair value movements on financial instruments designated as fair value through profit & loss

-

-

(8,500)

(10,500)

-

Unwinding of discount on partnership liability to the Marks & Spencer UK Pension Scheme

-

-

(4,000)

(38,000)

(27,300)

Unwind of discounts on financial instruments

(1,200)

(3,800)

-

-

-

Fair value gain on financial instrument

-

54,300

-

-

-

Finance costs

(136,800)

(98,600)

(162,200)

(214,500)

(146,600)

Profit before tax

658,000

780,600

702,700

706,200

1,129,100

Income tax expense

(168,400)

(182,000)

(179,700)

(199,400)

(308,100)

Profit on ordinary activities after taxation - continuing operations

-

-

-

-

821,000

Profit for the year

489,600

598,600

523,000

506,800

821,000

Profit for the year attributable to equity shareholders of the Company

513,100

612,000

526,300

508,000

821,700

Profit for the year attributable to non-controlling interests

(23,500)

(13,400)

(3,300)

(1,200)

(700)

Weighted average shares outstanding - basic

1,579,300

1,577,100

1,572,200

1,573,200

1,671,300

Weighted average shares outstanding - diluted

1,592,200

1,592,700

1,586,500

1,574,000

1,687,300

Year end ordinary shares outstanding

1,605,507.102

1,584,863.882

1,582,316.581

1,577,794.919

1,586,478.423

Earnings per share from continuing operations - basic

-

-

-

-

0.492

Earnings per share - basic

0.325

0.388

0.335

0.323

0.492

Earnings per share from continuing operations - diluted

-

-

-

-

0.487

Earnings per share - ...