Analysis and Evaluation of the Financial Performance Assignment

Running head: ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
Analysis and Evaluation of the Financial Performance
(Marks and Spencer Plc)
Name of the Student
Name of the University
Author’s Note

1ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
SIGNED DECLERATION
Name:
Signature:
Date:

2ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
ABSTRACT
Analysis and evaluation of the financial performance of a company is considered as an important
process for the assessment of overall financial performance. In addition, this process helps in the
formation of effective financial strategies of the business organization. The main purpose of this
research is to analyze and evaluate the financial performance of Marks and Spencer for past ten
years. This will be done by analyzing the financial information of the company with the tool of
ratio analysis. For this research, the researcher will adopt the strategy of quantitative analysis. In
this process, the researcher will acquired secondary data from the financial statements of Marks
and Spencer. After the collection of secondary data, they will be analyzed in Microsoft Excel.
With the help of Microsoft Excel, the analyzed and evaluated data will be presented in the forms
of graphs and charts.
Keywords: Marks and Spencer, financial performance, profitability, liquidity, efficiency

3ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
ACKNOWLEDGEMENT
Conducting this research has been the most enriching experiences of my life. The contribution of
this research to increase my knowledge base and analytical skill has been significant. It has given
me the opportunity to face challenges in the process and overcome them. This would not have
been possible without the valuable guidance of my professors, peers and all the people who have
contributed to this enriching experience. I would like to take this opportunity to thank my
supervisor ----------------------- for the constant guidance and support provided to me during the
process of this research. It would not be justified if I did not thank my academic guides for their
important and valuable assistance and encouragement throughout the research process. I would
also like to thank my friends who had provided me with help and encouragement for collecting
secondary data and valuable resources. The support of all these people has been inspiring and
enlightening throughout the process of research in the subject.
Heartfelt thanks and warmest wishes,
Yours Sincerely

4ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
Table of Contents
1.0 INTRODUCTION.....................................................................................................................6
1.1 Background............................................................................................................................6
1.2 Research Aim and Objectives................................................................................................8
1.3 Rationale................................................................................................................................8
1.4 Scope and Limitations...........................................................................................................9
1.5 Project Outline.......................................................................................................................9
2.0 LITERATURE REVIEW........................................................................................................10
2.1 Introduction..........................................................................................................................10
2.2 Impact of Working Capital Management on the Performance of Firms.............................10
2.3 Overview of the Company...................................................................................................12
2.4 Importance of Performance Measurement...........................................................................13
2.4.1 Non-Financial Performance..........................................................................................14
2.4.2 Financial Performance..................................................................................................15
2.5 Ratio Analysis......................................................................................................................15
2.6 Summary..............................................................................................................................17
3. METHODOLOGY....................................................................................................................18
3.1 Introduction..........................................................................................................................18
3.2 Research Philosophy............................................................................................................18

5ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
3.3 Variable Definition and Measurement.................................................................................23
3.4 Sample Selection and Data Collection................................................................................24
3.5 Analytical Procedure...........................................................................................................26
3.6 Ethical Issues.......................................................................................................................27
3.7 Summary..............................................................................................................................27
4.0 CONCLUSION........................................................................................................................29
References......................................................................................................................................30

6ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
1.0 INTRODUCTION
1.1 Background
The analysis and evaluation of the financial performance of the companies is considered
as one of the major factors in today’s business world. In today’s changing business world, it is
essential for the business organizations to perform in a consistent good way in order to stay in
the competition. In this aspect, the analysis and evaluation of the financial performance of the
companies is an important aspect (Higgins 2012). The analysis and evaluation of financial
performance refers to the process of the identification of financial strateghts and weaknesses of
the companies. At the time of analyzing and evaluating the financial performance of the
companies, it is required to consider the major financial statement of the companies like balance
sheet, statement of profit and loss, statement of cash flows and others (Baird, Geylani and
Roberts 2012). All these financial statements are important for acquiring necessary financial
information about the companies (Almazari 2012). In this context, it needs to be mentioned that
many tools are there for the analysis and evaluation of financial performance. One of those major
tools is Ratio Analysis (Brigham and Ehrhardt 2013). This particular research aims to analyze
and evaluate the financial performance of Marks and Spencer Plc for ten years. Marks and
Spencer is a major British multinational retailer and the company has its operations spread all
over the world. The research is based on the analysis and evaluation of the financial performance
of Marks and Spencer Plc for ten financial years. In the recent financial crisis all over the world,
the financial performance of the companies are largely affected. Thus, it is required for all the
companies to analyze and evaluate their financial performance for the identification of the strong
and weak financial areas (Bodie, Kane and Marcus 2014). With the help of this analysis and

7ANALYSIS AND EVALUATION OF FINANCIAL PERFORMANCE
evaluation, it become possible for the companies to develop effective financial as well as non-
financial strategies to strengthen the weak areas (Sheela and Karthikeyan 2012). This same
concept is also applicable for Marks and Spencer Plc. In the recent years, it has been seen that
the company has become affected due to the world financial downturn.
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0
100
200
300
400
500
600
700
800
900
660
822
508 526
612
513 454 524 487
406
Net Income (£m)
Net Income (£m)
Figure 1: Net Income of Marks and Spencer
(Source: corporate.marksandspencer.com 2017)
2007 2008 2009 2010 2011 2012 2013 2014 2015 2016
0
0.2
0.4
0.6
0.8
1
1.2
0.4
0.97
0.65 0.66
0.77
0.64 0.56 0.64 0.59
0.49
Earnings Per Share (£)
Earnings Per Share (£)