FINANCIAL REPORTING

Financial Reporting

Financial analysis - Marks & Spencer Group PLC

Introduction

In last few years, global financial crisis has adversely impacted on the financial performance of the companies. From 2008 to 2011 companies has been dealing with huge difficulties which also reflect from their financial statement, especially with liquidity position of the company and trading performance. In this paper the focus would be on the discussion on the trading performance and liquidity position of the company over the past three years with the help of ratio and critical evaluation on the changing accounting policies of the companies. The company which has been chosen for is Marks & Spencer Group PLC.

Discussion

Overview of the company

Mark & Spencer started off as a stall in 1884 by Michael Marks, with the philosophy to sell products at a moderate price to the customers. Now, Marks & Spencer (M&S) is one of the UK's foremost retailers of clothing, home ware foods and financial services, allocation 10 million customers a week across 700+ UK stores and around the world (corporate.marksandspencer).

Main Product and Services

Mark & Spencer specializes in sales of clothing, gifts, footwear, home furnishings and foods, in its chain of 294 stores in UK under the trade mark of St. Michaels. Majority of the company's overseas stores are franchised to local partners. In USA, the company also owns clothing retailers Brooks Brothers and chains of Kings Super Market (corporate.marksandspencer).

Last five years highlights

The last 5 years had been very crucial years of change. There was a series of change in management and corporate structures, with a huge decline in trade. It experienced collegial and uncompetitive blur on the UK stock market. This was due to the change in current economic depression and demand of consumers for retail products, and because of all these hindrances, Mark & Spencer had to go through succession or alignments and transformations (library.morningstar.com.).

Current High Lights

In 2011, the company showed revenue of £9,740.3 million which was an increase as compared to 2010 i.e. 2.1%. M&S record approximately £836.9 million operating profit in 2011which was less than in 2010, a reduction of 1.58% in operating profit. There was an enhancement of 16.3% in 2011 from 2010 in net profit due to increase in non operating income (library.morningstar.com.).

Financial performance of company

The financial crisis overwhelming world markets as well as creating problems for companies. This has created shortage and restriction everywhere. Companies now see this as a challenge and have set their strategies accordingly. For implementation of these strategies, they need leaders who can lead the team in an effect manner on times when the crisis spread to the real economy making market situation very painful. How policy makers can move forward along with the diminishing profit. The magnitude and duration of the crisis remain uncertain, but the costs are enormous which lost as they related to mortgages, a risk of collapse actions, rescue, among others (Paul D. K. 2009, pp. 139).

Same was the case with Marks and Spenser; the economic downfall badly ...