Financial Statement Analysis of Marks and Spencer

Running head: FINANCIAL STATEMENT ANALYSIS
Financial statement analysis
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1FINANCIAL STATEMENT ANALYSIS
Table of Contents
Financial statement analysis of Marks and Spencer..................................................................2
Ratio analysis.............................................................................................................................2
Industry place of the company...................................................................................................3
Reference....................................................................................................................................4
Appendix....................................................................................................................................5

2FINANCIAL STATEMENT ANALYSIS
Financial statement analysis of Marks and Spencer
Looking into the income statement of the company it has been identified that though
the revenue of the company over the years 2015,2016 and 2017 are in increasing trend, the
operating profit as well as the net profit of the company for all these 3 years are in reducing
trend. This indicates that the company was not able to reduce its operating expenses. If the
balance sheet is considered it can be stated that though total assets of the company is
increased in 2016 it again fell in the year 2017. Further, the liabilities of the company were in
increasing trend over the years under consideration. Now talking about the equity it can be
stated that shareholder’s equity for the company is increased in 2016 it again fell in the year
2017 (Kijewska 2016). Further, owing to reduction in cash used for investing as well as
financing activities closing cash balance of the company was in increasing trend.
Ratio analysis
Profitability ratio – it states about the profit earning capability of the company from the
revenue. It can be identified that both the profitability ratios of the company that is the net
profit margin and return on total assets are in decreasing trend over the years from 2015 to
2017. It is indicating that the profit earning capability of the company and converting the
sales into profits are reducing (Andrijasevic and Pasic 2014).
Liquidity ratio – it states the liquidity position of the company that is whether it is able to pay
off its short-term dues when it becomes due. Looking into the liquidity ratios of the company
it can be stated that the liquidity position of the company has been improved over the years.
Efficiency ratio – the efficiency ratios of Marks and Spencer for the year 2015 to 2017 is
indicating that the efficiency of the company with regard to collection of its dues and selling
or replacing of its inventories over the years has been reduced.