ACCOUNTING & FINANCIAL CONTROL

Accounting & Financial Control

Financial analysis - Debenhams Company

Introduction

Financial analysis is part of the economic analysis, which deals with the assessment of efficiency of the company and its financial position. It represents the state over and property capital, financial performance and overall financial situation of the company. This paper focus on the financial analysis of the Debenhams Company and it comparison with its competitor Marks and Spenser.

Discussion

Overview of the Company

Debenhams PLC is a chain of British department stores operating in the UK and provides high quality apparel, cosmetics and household goods to their customers. This company is listed on the London Stock Exchange and in between the index FTSE 250. This index is an important index due to important British companies who contribute to the market capitalization.

In 2010, Debenhams had recorded profit of 2,119.9 million i.e. approximately $3,318.5 million, which is 10.7% increase comparing to FY2009. The operating profit in 2010 was £189.7 million which was an increase of 4.1% over 2009. Company showed £97 million in 2010 which was 2% more than in 2009. The financial performance of the company in 2010 has been much better than last three years (ar10.debenhamsplc.com).

History of the Debenhams

Debenhams plc was founded in 1778 by Messrs Flint and Clark, who began with a fabric store at 44 Wigmore Street, in London, named Flint & Clark. Debenhams plc British is a retailer operating under a department store format in the UK, Ireland and Denmark, and franchise stores in other countries. The group Debenhams as we know it today is the result of acquisitions across the UK, under the leadership of its chairman Ernest Debenham. The first acquisition was that of Marshall and Snelgrove in Oxford Street, London, 1919; of the following include Harvey Nichols in the exclusive area of Knightsbridge in 1920. Most shops kept their identities redeemed until a common aspect was decided and implemented. The company entered the London Stock Exchange in 1928.

In 1976, the company bought Browns Chester; store founded in 1780 by Susannah Brown, this is the only acquisition that has not been renamed “Debenhams” and was able to retain its own identity. In 1985, the company was bought by the Burton Group clothing; all splintered from the parent company in 1998 and was indexed to the exchange as a separate entity. The company continued to grow under the leadership of Belinda Earl, who took office as CEO in 2000. The company was acquired in late 2003 by a consortium consisting of CVC Capital Partners (equity estimated at $ 46 billion), TPG Capital (equity estimated at $ 50 billion) and Merrill Lynch. In 2006, the company returned from the London stock market. In 2006, the company bought the department store chain Roches Stores in Ireland (http://media.corporate-ir.net/m).

In July 2008 the company had 147 stores, including this Desire by Debenhams stores. All the shops cover 965 million square meters across the UK and Ireland. Forty shops also operate as franchises in other ...