Efficient Market Hypothesis: FTSE and Marks & Spencer Analysis

This report provides an analysis of the Efficient Market Hypothesis (EMH), exploring its implications for financial markets. The report examines the efficiency of the FTSE in the UK, discussing how market indexes reflect economic changes and firm performance. It then investigates the financial performance of Marks and Spencer plc, utilizing financial data to assess its market compatibility and operational efficiency. The analysis includes key financial metrics such as days sales outstanding, inventory turnover, and asset turnover to evaluate the firm's performance over several years. The report concludes by highlighting the importance of financial disclosures and the role of stakeholders in assessing a firm's profitability and market position, offering insights into investment decisions and operational improvements. The report emphasizes the EMH's impact on investment strategies and the significance of financial data in understanding market dynamics.

EFFICIENT MARKET
AND RETURN

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
REFERENCES................................................................................................................................4

INTRODUCTION
The efficiency of capital market is quite necessary to be determined by the professionals
as to make adequate changes into operations. Moreover, there can be huge variation in the
market index as per the economic changes a well as the operational performance of the firm
which are listed in it. In the present report there will be discussion based on analysing the
efficient market hypothesis which ascertain the efficiency of FTSE in UK that will be helpful as
to manage the business operations. Moreover, there will be determination based on financial
performance of Marks and Spencer plc over the respective period.
Efficient market Hypothesis
In accordance with thus theory which comprises with the action that it will always be
impossible to beet the market because of the existence of market shares will be effective and
incorporated as to have relevant business information. It comprises with the method that the
market needed to be operated and the share will be traded on their fair value. Therefore, it brings
the ability to investors in purchasing the securities as on undervalued. Similarly, they will
become to make sale of the goods and services on their inflated prices. In addition, it becomes
impossible for investors to deal the securities in terms of purchasing it on undervalue prices as
well as sell them off on inflated costs (Efficient Markets Hypothesis, 2017). Therefore, there will
be no manipulation of the share prices of entity as there will be fruitful increment in the growth
and profitability of the organisation. It also states that the out performing the share is quiet
impermissible only in special case as the investors wanted to take risks on purchasing the riskier
marketable securities (Hamid and et.al., 2017). Moreover, to obtain the profitable gains from the
market there will be need of having the adequate implication of various revenue and operations.
Financial Times Stock Exchange (FTSE):
This is the financial stock market index which contains all the information relevant with
the market prices of various shares and their market returns in the firm. Therefore, with the
influences of such techniques it will be assistive and helpful as to manage the financial
environment in business. It comprises with market value of all shares of all the growing and
market giants in the capital market. It helps in s facilitating and communicating the share value
and market prices of all the firms which are listed in the indexes as to have adequate revenue
generation (Bariviera and et.al., 2017). The importance of such information is that it will benefit
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organisation in generating the large numbers of consumers as well as large numbers of fingernail
gains will be gathered by them (Wang and et.al., 2018). The bull and bare in the share prices and
market values will be indicative as it helps in generating the profits as well as making investment
decisions. Moreover, the efficiency of this equity index in the UK market is that there has been
various progressive industries are being listed and facilitating the appropriate trade practices
among the investors and the firms. Therefore, it will be provoking in terms of having the
adequate revenue gains as well as making the adequate changes into operations of the entity.
Similarly, in relation with making effective analysis over the market efficiencies buy
considering the exchanges in the market value and efficiency of Marks and Spencer plc this is
the market giant which is best known for its sales and operations in the business activities.
However, these will be beneficial as the market efficiency of this organisation will be analyse as
based on the each periodical financial disclosures (Dreżewski, Dziuban and Pająk, 2018). The
disclosure of the financial data bring the accurate information regrading the ability of firm in
making dividend payments which bring the accurate comparability to investors as the will make
fruitful comparison between the profitability of various industries in the organisation. This the
best medium of conveying information regrading the economic environment of a firm.
Stakeholders mainly operates the financial accounts as to see the profitability of firm in recent
times (Sen, Singh and Mazumder, 2017). They make analysis over the facts that there will be a
fruitful rise and increment in the revenue of firm. In relation with the same firm has to make
appropriate changes in operational activities such as better costing and operational management.
On the other side, FTSE will be a fruitful platform that emphasises on increasing the market
value, share price, number of investors as well as liquid efficiency of business in the capital
markets.
Efficiency of Marks and Spencer plc:
To analyse the market compatibility of Marks and Spencer there will be analysis based on
data derived from various operations and of the various period. Moreover, there can be fruitful
increment in the revenue and capital collection of the firm which in turn have the profitable gains
to the business (Wallison, 2018). The dividend payable by the firm in respective years will be on
favourable level as the investors found the firm is more capable of making appropriate payment
of returns of their investments.
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Particulars 2013 2014 2015 2016 2017
Efficiency
Days Sales Outstanding 4.06 4.16 4.43 4.14 3.87
Days inventory 42.45 45.71 47.41 45.37 43.53
payable period 57.45 59.99 60.92 56.49 55.56
inventory turnover 8.6 7.98 7.69 8.05 8.39
Fixed asset turnover 2.04 2.03 2.03 2.1 2.15
Asset turnover 1.35 1.33 1.28 1.27 1.27
years Total equity
2013 2505
2014 2707
2015 3200
2016 3445
2017 3156
By considering the efficiency of Marks and Spencer in the recent times it can be said that
there has been huge variation in the operational activities of the business. Therefore, it can be
said that there are huge variations in the revenue and equity collection of organisation. In the
year 2013, total equity collection of Marks and Spencer Plc was 2505, in 2014 it was 2707, in
2015 it was 3200, in 2016 it was 3445 and in 2017 it was 3156. Therefore, it can be said that firm
is quite efficiency as well as have the positive responses from the market as to have appropriate
capital generation (Jancenelle, Storrud-Barnes and Javalgi, 2017). Therefore, after analysing the
operational gains of the business there can be effective changes into operations of entity (Marks
& Spencer Group PLC, 2018). The investors in the market are finding the firm is most profitable
as to make investment as well as they will offer the effective returns which will be helpful to
make appropriate development of operations. Moreover, it can be said that there are various
operations which in turn will be effective and helpful as to make appropriate capital gains
through market. Therefore, in comparison with the financial performance of entity in year 2013,
2017 has the appropriate gains and reflected the profitability of the firm. Similarly, it requires
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appropriate planning and operational development of the policies which will be effective and
helpful in attracting more consumers in business.
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