Financial Analysis Report for John Lewis Partnership PLC

Analysis Report

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Company overview.....................................................................................................................3
Economic context to the report...................................................................................................3
Ratio Calculations and Analysis.................................................................................................4
CONCLUSION ..............................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The process of evaluating businesses, ventures and other financial transactions to gain an
idea about their performance and sustainability is called as financial analysis. When a company
needs to invest, the analysts evaluate the company's profitability, liquidity and solvency (Campos
and et.al., 2019). In this report, consolidated income statement and balance sheet of the year
2021-22, will be analysed specifically to calculate financial ratios to perform an analysis on John
Lewis Partnership PLC so that Marks and Spencer can have an upper-hand over their
competitors. After analysing the financials of John Lewis, recommendations on how Marks and
Spencer can enhance its performance will be given.
MAIN BODY
Company overview
John Lewis, was born in Shepton Mallet in Somerset in 1836, he then came to London in
1856 and worked as salesman for Peter Robinson, an Oxford Street draper. He then declined the
offer of partnership and rented his own area in Oxford street. Lewis devoted himself completely
to the business, he invested the money in residential and retail properties, he gradually moved
into different departments of merchandise. John Lewis Partnership PLC is a British company
which operates a number of retail activities. This company is owned by a trust on behalf of its
employees also known as Partners. It has around 80000 employees or partners. JLP is the third
largest UK non traded company by sales. The company suffered a loss of 517 million during the
Covid 19 pandemic. The company owns around 35 stores in Britain. It strives to be the cheapest
vendor with high quality and exclusive products.
Economic context to the report
There has been a shift in consumer spending due to economic fluctuations. Rise in
inflation and taxes has impacted the performance and profitability of the company. During Covid
19 the company was forced to shut down stores which led to a major fall in sales. Nowadays,
around 60% of the sales has been shifted online which grew from 40% before the pandemic hit.
The company blamed falling customers on Brexit. As the situation is improving, JLP should
focus on making new policies and strategies to attract more customers through innovative
promotional activities. As the macro environment is stable, consumer spending increases, it will
lead to increase in sales and thereby profits of the company (Gillooly, Perry and Martins, 2019).