Financial Accounting Report: Analysis of Clarks Company Finances

This report provides a comprehensive analysis of the financial accounting practices of Clarks Company, a British shoe manufacturer and retailer. The report begins with an introduction that highlights the importance of accounting and finance in guiding decision-making for investors and creditors. It then provides a detailed overview of Clarks Company, its history, and its operations. The core of the report focuses on the role of accounting and finance within Clarks, examining how financial statements, such as the Profit and Loss Account and Balance Sheet, are used to analyze the company's financial condition, manage costs, make decisions, and develop business strategies. The report emphasizes the importance of financial planning and control, including budgeting, and concludes by summarizing the key findings and the significance of accounting and finance in the success of Clarks. References from academic sources are included to support the analysis.

Financial Accounting(Student Name)

Financial Accounting 1
Table of Contents
1. Introduction.........................................................................................................................................2
1.1. Importance of Accounting and Finance.......................................................................................2
2. Clarks Company......................................................................................................................................2
3. Role of Accounting and Finance in Clarks..........................................................................................3
4. Conclusion...............................................................................................................................................4
5. References...........................................................................................................................................5

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1. Introduction
financial statement provides the representations of the phenomena that help in guiding the
decision making process of the creditors, investors as well as other interested parties (Demmer,
Pronobis and Yohn, 2019). This notion has explained under the variety guise in the accounting
literature. It plays an essential role in handling the income, expenses as well as finance related
activities for the company (Cheng and Wu, 2018).
1.1. Importance of Accounting and Finance
Finance and Accounting plays an important role for company to grow in the market in an
effective manner. There is certain importance of accounting and finance that will be explained I
the below points:
 It helps in tracking the revenue as well as other expenses for the company that helps the
organization for the smooth running of the business.
 It provide the information about the profit or loss that is occurred by the com[any
 It also provide the clear picture on the financial position of the business on specific date
 It helps in analyzing the exact cash inflow and out flow of the company to the certain
extent.
 It helps in evaluating the actual performance of the company to the certain extent.
 Proper accounting and finance process help in ensuring the statutory compliances when it
comes to the business.
 It helps in creating budget as well as future projection for the company that guide them to
manage its funds (Ahadiat and Martin, 2016).
2. Clarks Company
C. and J. Clark Ltd is better known as the Clarks, a British show manufacturer as well as Retailer
that has its base in street, Somerset, England. The company was established in the year 1825 at
the time when brothers Cyrus as well as James Clark setup the small sheepskin slipper business
in the street. Clarks continued the family business as well as operate in many other countries as
well. The company has expanded its business in the international market in an effective as well
as in an efficient manner (Watson, 2016). The company manufactures wholesales as well as also
retails the footwear for the women, men as well as children. It is known with the reputation of
having the quality footwear with the strong portfolio of the brands aswell as it focused of over
the style of the shoes that make the company unique from other competitive companies in the
market. In the year the company earned the revenue of £111 million that was based on its sales.
The company is considering as one of the 3th largest private company in the UK (Zhuang and
Qiu, 2015).
The success of the company is majorly depends of the success that is lie in the working together,
respecting each other as well as being open with the new ideas. The company manages its
finance in an effective manner that helps them to know the actual financial position of the
company to the certain extent (Koolhaas, 2017).

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3. Role of Accounting and Finance in Clarks
Finance and Accounting plays a vital role as well as useful role by developing the information
for providing the answers that is required by the company to grow in the competitive market. It
plays an important role in the leading company Clarks as it is explained in the below points:
 Accounting and Finance help in analyzing the financial condition of the Clarks. It help in
analyzing the actual financial statement of the Clarks where they can able to analyze that
the company is running in the profit or loss on the specific year according to which they
can able to work on the flawless that occur while running the business. for example the
Profit and Loss A/c that is prepared by the Clarks help in analyzing that it is occurring
profit or loss. In the year 2008, the company earned the revenue of £111 million that can
be able to depict with the help of financial statements.
 The exact cost can be easily be depicted with the help if accounting and finance. Clarks
can able to prepare budget according to the cost incurred by them. Ithelps in managing
the cost in more effective as well as in an efficientmanner. For example Clarks prepare
cash budget, production budget, sales budget and other budgets to control over the cost in
an effective as well as in an efferent manner (Tamayo-Torres et al., 2019).
 Accounting and Finance also pay a vital role in making decision by the management of
the company, stakeholdersas well as other creditors and government to make
participation in an efficient manner. The accounting and finance represent the clear
picture of the growth of the company that helps the management of Clarks to take
decision accordingly. And the investor cam ableto take decision that should they invest
their amount in that company or not. For example the annual report of Clarks cover one
section for Financial Analysis that will represent the actual picture of the company, in the
annual report of 2017, the company depict as the growing one that attract the number of
investors toward the company to the certain extent.
 Accounting and Finance also help Clarks in analyzing that where the cost of production is
reasonable or excessive with the help of comparing with the previous year or with the
competitive company. For example in the year 2016 the cost of the production was high
that was controlled in the year 2017 which directly affected over the profit margin of the
company to the certain extent. It helps the company to analyze the cost production in an
effective manner that can support them to grow in the competitive market (McKinstry,
Kininmonth and Mathieson, 2019).
 The company cam able to develop the business strategy with the help of the accounting
and finance. The main target of Clarks is to earn profit. Therefore, it is require for the
company to analyze the growthof every year which can be done through preparing the
financial statements. Clarks can able to develop its business strategy with the help of
accounting and finance. For example in the year 2017 the company has earned the
sufficient revenue which was £ 1.65 billion however, that was goes down in the year
2018 to £1.54 billion. Such report help in analyzing the flaws of the company that will
help in making the business strategy according to that can can able to focus over the
issues in more efficient and effective manner.
 The financial performance of the company can also be analyzed with the help of
accounting and finance. For example the Balance sheet of Clarks showcases the actual
assets that are acquired by the company and liabilities that are required to be paid.

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According to such information the company can able to raise the funds in an efficient as
well as in an effective manner (Alderson, 2015).
4. Conclusion
It is concluded from the above analysis of the report that managing the business is one of the
tough tasks for the company to growing the in competitive market. Accounting and Finance play
a vital role in managing the business to the certain extent. It showcases the actual growth and
development of the company that is required for them to analyze its performance. One of the
leasing company Clarks in UK also manages the accounting and finance to manage its business
in an effective manner. The company can able to develop business strategy with the help of
accounting and finance. It also playsa great role in preparing the budget that is required for the
growth of future. Furthermore, Clarks can able to analyze its financial performance in an
effective manner with the help of accounting and finance. Therefore, Accounting and Finance
play a great role in the management of Clarks.

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5. References
Demmer, M., Pronobis, P. and Yohn, T.L. (2019) Mandatory IFRS adoption and analyst forecast
accuracy: the role of financial statement-based forecasts and analyst characteristics. Review of
Accounting Studies, 24(3), pp.1022-1065.
Cheng, J.C. and Wu, R.S. (2018) Internal capital market efficiency and the diversification
discount: The role of financial statement comparability. Journal of Business Finance &
Accounting, 45(5-6), pp.572-603.
Ahadiat, N. and Martin, R.M. (2016) Necessary Attributes, Preparations, and Skills for the
Selection and Promotion of Accounting Professionals. Journal of Accounting & Finance (2158-
3625), 16(1).
Watson, N. (2016) The Alfred Gillett Trust’s Shoe Digitisation Project. Journal of Digital Media
Management, 4(3), pp.254-264.
Zhuang, L. and Qiu, Y. (2015) The beginning of the end of Chinese Surrogate Manufacture?
Cool-Comfort Shoes International Company Limited and its Ace-of-Biz. Emerald Emerging
Markets Case Studies, 5(5), pp.1-8.
Koolhaas, R.D. (2017) Reinventing Shoes: United Nude. Architectural Design, 87(6), pp.70-75.
Tamayo-Torres, I., Gutierrez-Gutierrez, L. and Ruiz-Moreno, A. (2019) Boosting sustainability
and financial performance: the role of supply chain controversies. International Journal of
Production Research, 57(11), pp.3719-3734.
McKinstry, S., Kininmonth, K. and Mathieson, K. (2019) The introduction and operation of
standard costing at J&P Coats Ltd., 1925–1961: an institutional interpretation. Accounting
History Review, 29(3), pp.369-389.
Alderson, K. (2015) Conflict management and resolution in family-owned businesses: A
practitioner focused review. Journal of Family Business Management, 5(2), pp.140-156.