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Financial Management and Ratio Analysis of Marks and Spencer Plc

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Added on  2019-09-16

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This report analyzes the financial position of Marks and Spencer Plc for the year 2015 and 2014 using ratio analysis. It covers profitability, liquidity, capital structure, and efficiency ratios. The report also discusses the perception of stakeholders such as suppliers, customers, and shareholders.
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ARUMBAFM003 Financial Management
Financial Management and Ratio Analysis of Marks and Spencer Plc_1
Question 1Particular Project AProject BMachine New100000120000Resale Value20000Market Research Incurred10000Sales Each Year121500Good Whether 50% Probability 125000Bad Whether 50% Probability 75000Variable Cost60%55%Fixed Cost Maintenance P.A6000(a)Calculation of Weighted Average Cost of CapitalFund TypeAmount (a)Weight (b)Cost of Fund ©Cost of Fund d =*b*c)
Financial Management and Ratio Analysis of Marks and Spencer Plc_2
Equity 80000000.875.6Debt 20000000.2122.4Total1000000018The weighting average cost of capital is 8% (b) Payback Period for each Project Calculation of Annual Cash flow for each Project particularProject AProject B Sales 100000121500LessVariable Cost 6000066825Annual Maintainance Cost6000Annual Cash Inflow for 5 Year 4000048675Paybck Period = ( Zero Year Outflow/ Annual Cash Flow)Cost of Machinery 100000121500Payback Period In year 2.5002.496© Calculation for Net Present Value for Each Project Particular Project AProject B
Financial Management and Ratio Analysis of Marks and Spencer Plc_3
Annual Cash Inflow40,000.0 48,675.0 Present Value factor For 5 years@ 8% WACC4.0 4.0 Discounted Annual Cash Flow (A)159,708.0 194,344.7 Scare for Sale of Machine year 520,000.0 - Present Value Factor of 5th year (B)0.4 0.4 Discounted Scrape Proceed7,610.0 - Total Present value Cash Flow © =(A+B)167,318.0 194,344.7 Total Cash Outflow on Zero Year Pucrhase of Machinery (D)100,000.0 121,500.0 Net Present Value E =(C-D)67,318.0 72,844.7 D)Calculation of NPV for best and Worst for Project AParticularBest Worst Sales125,000 75,000 Variable Cost 75,000 45,000 Annual Cash Flow50,000 30,000 Present Value factor For 5 years@ 8% WACC4 4 Annual Cash Flow (A)
Financial Management and Ratio Analysis of Marks and Spencer Plc_4

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