presentation of M.S &S

8/6/2019 presentation of M.S &S

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Group D

MBA- Innovative Management

FINANCIAL REPORTINGPresentation By Wasim Group


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Group Members

y Wasim (Leader)

y Arshad (Secretary)y Ranjith

y Bandhu

y Issudeen

y Asma


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About

y Major British retailery 895 stores- 40 territories

y Clothing, food, home ware, hospitality, furniture, technology,beauty, financial services, energy

y Geographic Segments- UK & International

y Ian Dyson- Group Finance and Operations Director

y Year 1998-the first British retailer to make a pre-tax profit ofover 1 billion


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Financial Position

y Until 1999 M&S's financial year ended on 31 March

y After 1999 the company has changed to reporting for 52 or 53 week

periods, ending on variable dates.

Year EndedTurnover

( M)Profit Before

Tax ( M)Net Profit (

M)Basic EPS (P)

28 March2009 9,062.1 706.2 506.8 32.3

29 March2008

9,022.0 1,129.1 821.0 49.2


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Quarter 4- 2009/10

Trading Statement

y Sales 4.3bn, +2.8%y Profit before tax* 298.3m, +0.2%

y Adjusted earnings per share* 13.7p, level

y Net cash inflow 69.7m

y Net debt 2.4bny Interim dividend 5.5p


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INTERNATIONAL FINANCIAL

REPORTING STANDARD

Chairmans Letter to Shareholders.

Operational Review.

Directors Report: business review.

Directors Report: Corporate Governance.Financial Statements

Accounting Policies. (GAAP)

Income Statement.

Balance Sheet.

Cash Flow Statement.

Statement of Change in Equity.

Notes to Accounts.

Auditors Report.


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Financial Highlights

y Year 2009 dividends paid per share is 22.5p and the total dividends paid is

354.6 milliony In 2009, Marks and Spencer Group PLC increased its cash reserves by

153.01%, or 180.40m. The company earned 1.29bn from its operationsfor a Cash Flow Margin of 14.24%.

y Marks and Spencer Group PLC has a Debt to Total Capital ratio of 0.62%


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M&S Balance Sheet

Current assets

2009(m) 2008(m)

y Cash 422.8 317.8

y Net receivables 285.1 307.4

y Other current assets 145.7 67.2

y Inventories/stock 535.9 488.6

y Total Current assets 1389.8 1181.7y Non current assets 5868.3 5979.3

y Total assets 7256.3 7157.0

Liabilities

y Current liabilities (2306.9) (1988.9)

Non current liabilities

y Retirement benefit deficit (1152.2) (20.5)

y Other non current liabilities (2698.4) (3187.6)

y Total liabilities (5156.2 ) (5194.1)

y Net assets 2100.6 1964.0


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M&S Income Statement

2009 2008

52 weeks 52 weeks

m m

y Revenue 9062.1 9022.0

y

Cost of goods & operating expenses (8192.1) (7811)y Operating profit 870.0 1211.3

y Finance income 50.0 64.4

y Finance cost (214.5) (146.6)

y Profit on ordinary activities before taxation 706.2 1129.1

y Income tax expense (199.4) (308.1)

y Profit after taxation 506.8 821.0

y Profit for the attributable to:y Equity shareholders of the company 508.0 821.7

y Minority interest (1.2) (0.7)

y Profit attributable to shareholders 506.8 821.7


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M&S Cash Flow Statement

2008(m) 2007(m)Cash flow from generating activities

y Generated from operating activities 1371.9 1236.0

y Taxation paid (81.3) (166.2)

y Cash flow from operating activities 1290.6 1069.8

Cash flow from investing activities

y Acquisition and disposals --------- (46.4)y Capital expenditure and financial investment (609.6) (924.6)

y Interest received 12.7 4.8

y Cash flow from investing activities (596.9) (966.2)

Cash flow from financing activities

y Interest paid (197.1) (88.9)

y Other debt financing 66.2 954.45

y Equity dividend paid (354.6) (343.6)

y Other equity financing (35.6) (556.2)

y cash flow from financing activities (521.1) (34.2)

Net cash inflow from activities 172.6 69.4


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Financial Ratios

y Ratio is the comparison of the two variables.

y Financial ratio's is the tool to measure the financialperformance of the companies.

y Liquidity, profitability and efficiency ratios are the important

ratios to check company performance.


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Liquidity Ratio

y This is the measure of the companys ability to pay back theinvestors, creditors and share holders money.

y

Current ratio is the ratio of the current assets to the currentliabilities.

y Acid test ratio is the similar to the current ratio but less stockfrom the current assets.

y

Higher the number in both ratios, the better the financialposition.


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Liquidity Analysis

2009 2008

y Current ratio 3.8 5.20

y Acid test ratio 2.39 3.05

The companys liquidity position is strong but down ascompared to last year


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Profitability Ratio

y Profitability ratios are used to determine the profit earned on

invested money and sales made.y Profitability ratios are useful to find out if the company is

utilizing its resources efficiently and increasing its profit.


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Profitability Analysis

2009 2008

y ROCE 20% 31%

y EBTIDA ratio 8.0% 12.51%

y

Net profit ratio 5.59% 9.09%

The companys profit has decreased sharply as compared tothe other retailers as well as the profit earned last year


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Efficiency Ratios

2009 2008

y Stock turnover 15 times 16 times

y Fixed asset turnover 1.5 times 1.7 times

y Debtors day 11 days 12 days

y Creditors day 16 days 10 days


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Efficiency Analysis

y The company has managed the debtors and creditorsvery well but the stock turn over is slower than last year

and the fixed asset turn over is decreasing as the fixedasset increased slightly.


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Investment Ratios

2009 2008

y Debt equity ratio 2.45 2.64

y Earning per share 32.3 49.2


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Investment Analysis

y The companys gearing ratio is improving as compared tolast year but still very high as compared to other retailers in

the same industry.


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Suggestions for M&S

y Companys net profit is just 5% of the generated revenue sothe cost of the sales is really high, this is probably due toexpensive supply chain and suppliers. The sources should bereviewed to decrease the cost.

y Finance interest is gone up from 88m to 197 which shouldbe cleared as soon as possible to increase the profit.

y The stock turn over is good but its only four times a yearwhen new designs are injected, it has to be increased to 8 to10 times to be versatile and innovative to generate moreprofit.


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Conclusion

y The financial crises has effected almost all the businesseswhich could be a major reason for the less profit as the

buying power of the customers has effected.

y The customer focused and innovation along with the propermanagement of the resources leads the organisation to top ofthe industry.


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References

y http://marksintime.marksandspencer.com/Main/#/era=TheBeginning access on10/11/2009.

y http://www.bized.co.uk/learn/business/accounting/busaccounts/notes/sto-th1.htm

access on 29/11/2009.

y http://www.mindtools.com/pages/article/newLDR_90.htm access on 29/11/2009

y Mott, D; (1994) accounting for non accounting students: ratio analysis.

y http://en.wikipedia.org/wiki/Next_(clothing) access on 29/11/2009.

y http://www.irishtimes.com/blogs/pricewatch/2009/01/12/price-is-still-not-right/access on 30/11/2009.

presentation of M.S &S

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