Financial Analysis of M&S

INTRODUCTION
Financial Analysis and Decision making within a business is nothing but a tool used to consider the objectives that a business may pursue. Financial statements of any organisation likely explain the managers to assess the future outcomes.

Sean McQuire is a very old client of RSB bank who has now approached our manager for seeking advice in investing his money on a British retailing sector. He has been recommended on to invest in two companies “Marks and Spencer PLC” and “Debenhams PLC”. Now the manager has asked us to prepare a report on both the companies and interpretative on their published accounts and suggest the client on which company he needs to invest in. We have also been told to do an industry analysis by comparing these two companies with one more company of our choice in the same retailing sector.

M&S are one of the UK’s leading retailers, with over 21 million people visiting their stores. They are the leading seller’s of Men and Women garment and on overall they hold a 49% of their business on clothing. The other 51% they concentrate on food, where they sell fresh products and groceries, ready meals and party prepared meals. They have totally 600 stores on a whole all over UK. They are more focussed on quality, value service, innovation and trust.  

Debenhams is a leading departmental store which mainly concentrates on clothing sector. They show the importance of detail in the retail market. Debenhams departmental stores vary in size and character. They have a range of products with a mixture of own label and international brands. They have 51 international franchise stores in 18 countries outside the UK and Ireland and it is now concentrating on sales through internet to make the customers reach them easily.

RATIO ANALYSIS

Ratio is a very useful tool for managers to make wide variety of decisions in many areas. It helps them to plan on profit making, working capital management, dividend policy and financial... [continues]

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