Analysis of Business of Marks and Spencer

ANALYSIS OF BUSINESS OF MARKS AND SPENCER

Table of Content
Purpose of Report.................................................................................................................................3
Introduction...........................................................................................................................................3
Products................................................................................................................................................4
Key Personnel........................................................................................................................................4
Liquidity Analysis...................................................................................................................................4
Current Ratio.........................................................................................................................................5
Quick Ratio............................................................................................................................................6
Profitability Analysis..............................................................................................................................7
Net Profit Margin...................................................................................................................................7
Operating Profit Margin........................................................................................................................8
Gross Profit Margin...............................................................................................................................9
Inventory Turnover ratio.....................................................................................................................10
Receivable Turnover ratio...................................................................................................................11
Payable Turnover ratio........................................................................................................................12
Capital Structure Management...........................................................................................................12
Stock Market Performance..................................................................................................................13
Problems and Limitations....................................................................................................................13
Recommendation for Improvements..................................................................................................14
References:..........................................................................................................................................14

Purpose of Report
The report has been prepared to analyse the business of Marks and Spencer and involves
analysis of business prospect over a period of 5 years with focus on the following segments:
(a) Liquidity analysis involving computation of Current Ratio and Quick Ratio;
(b) Profitability analysis involving computation of Gross Profit Margin, Net Profit Margin
and Operating Profit Margin;
(c) Working Capital Margin Analysis involving computation of Cash Conversion Cycle;
(d) Capital Structure Management analysis involving computation of debt to equity ratio
and capital gearing ratio;
(e) Stock Market Performance and involves computation of Price to Equity Ratio
Post above, the report deals with the limitation of analysis and recommendation for
improvement of analysis.
Introduction
Marks and Spencer Group Plc is a listed entity in London Stock Exchange with principal
operations under the retail segment. (Reuters.com, 2018)The company makes its presence

pan world with more than 1380 stores globally. Marks has two segments of operation one is
domestic and other is international. Under the domestic segment it operated through its own
stores and through franchisee. The product dealt include food, clothing and home products. It
marks it presence digitally too. (Anon., n.d.) The company is headquartered in London. The
price of the shares quoted on London Stock Exchange on 6:09 AM EDT is 286.10 GBP.
Products
The company deals in following products and businesses:
(a) Food Industry: The Company has 696 food stores and contributes to 61% of UK
Revenue of the company. (Anon., 2018)
(b) Clothing and Home Sector: The company has 11.1 M Sqft clothing space in UK and the
business accounts for 39% of UK revenue of the company. (Anon., 2018)
Key Personnel
The key Personnel of the company along with a brief description of their profile is given
here-in-below:
(a) Archie Norman: Mr. Archie is the chairman of the company since September 2017. He
had prior stint in ITV, Lazard UK, Asda etc. He has a long track of creating value in
companies and changeover of many British Companies.
(b) Steve Rowe: Mr. Steve is the Chief Executive and Executive Director of the company
and has been since 2016. He is a veteran in e-commerce and retail business and he has
worked in all the areas of business.
(c) Humphrey Singer: He is Chief Financial Officer of the company and has been since
2018. He has past stint with Dixons Carphone Plc. He has played key roles in Finance
in various companies.
(d) Amanda Mellor: She is Group Secretary and group head of Corporate Governance of
the company. She has been since 2004 with the company and has diverse knowledge.
Her past stint was with James Capel, Robert Fleming etc.
(e) Katie Bickerstaffe: She is Non-Executive director of the company and has a diversified
knowledge in finance. She had a bright career with Ernst and Young, big four Audit
Company of the world. (Reuters.com, 2018)
Other directors include Pip McCrostie, Alison Brittain, Andrew Fisher, Andrew Halford.
Liquidity Analysis
This analysis measure the ability of the company to repays its liabilities in a timely manner as
and when due. The analysis is crucial to determine the company financial position in short
term and whether the company shall repay its debt in a timely manner. This ratio impact the
financial liquidity of the company and continuity of day-to-day operations of the company.
These analysis is based on items present in statement of financial position.