Next Plc

Topics: Financial ratio, Financial ratios, Profit margin Pages: 23 (4742 words) Published: May 25, 2010
Contents: Page:

Executive Summary.................................................................................. 3

Introduction to the Company .................................................................. 4

Financial Performance ............................................................................ 5-10

• Historic

• Peer

• Summary

Share Price Movement ........................................................................... 11-12

• Over Time

• Against Competition

• Against Industry Sector

• Against Market Indices

• Summary

Corporate Strategy ................................................................................. 13-15

- Swot Analysis

- Summary

Mission Statement .................................................................................... 16

- Aim

- Strategy

- Objectives

Investment Recommendation .................................................................. 16

References ................................................................................................ 17

Appendix

Word Count: 3.631 words

EXECUTIVE SUMMARY

This report provides an analysis and evaluation of the past and current profitability, liquidity and financial stability of NEXT plc. Methods of analysis used to include ratios such as Debt, Current and Quick ratios. Other calculations include rates of return on Shareholders Equity and Total Assets and earnings per share to name a few. All calculations related to NEXT plc can be found in the appendices. Results of data analysed show that all ratios are well over industry averages. In particular, comparative performance is of good standards in the areas of profit margins, liquidity, credit control, and inventory management.

The report finds the prospects of the company in its current position are positive. The major areas of weakness require further investigation and remedial action by management. Recommendations discussed include:

- improving the average collection period for accounts receivable.·

- improving settlement of liabilities.

- improving/increasing inventory turnover

- reducing prepayments and perhaps increasing inventory levels

The report also investigates the fact that the analysis conducted has limitations. Some of the limitations include:

Forecasting figures are not provided, the current economic conditions data limitations as not enough information is provided or enough detail i.e. monthly details not known results based on past performances not present. Some data not ready available for some competitors such as Arcadia Group, which is a Limited company.

INTRODUCTION TO THE COMPANY

What's NEXT in style is what concerns NEXT. NEXT plc has more than 500 stores primarily in the UK and Ireland. It also franchises 170-plus stores elsewhere in Asia, Europe, the Middle East, Russia, and Turkey. NEXT targets customers in their 20s and 30s who are looking for stylish but affordable clothes to take them through the NEXT fashion trend (Hoovers, 2010).

NEXT’s product range consists of adult and children’s clothing and accessories, sports and leisure, homeware, furniture, electrical goods, household appliances, computer games, wine and flowers. They are developing from a clothing retailer to a ‘lifestyle’ brand (FAME, 2010).

Revenue comes from:

NEXT Retail – 516 stores in the U.K and Ireland and 170 stores overseas.

NEXT Directory – Mail catalogue and internet site,

NEXT Sourcing – which designs, sources and buys NEXT branded products

Ventura – which provides customer services management to clients wishing to outsource their customer contact administration and fulfilment activities, also began providing warehouse and distribution services in 2007,

Lipsy – which designs and sells its own branded younger women's fashion products through wholesale, retail...

References: Other Activities also includes profits from its Property Management Division, and its associated companies, Choice and Cotton Traders. (Financial Times, 2010)
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