Economic Analysis: Accounting Practices at Marks & Spencer Company

This report provides an analysis of Marks & Spencer's business operations through the lens of business economics and accounting practices. It examines the influence of macro and microeconomic factors on the company's performance, including political, economic, social, and technological elements. The report details the crucial role of accounting in projecting financial transactions, assessing performance, and ensuring profitability. It also discusses major financial statements such as the profit and loss account, balance sheet, and cash flow statement, highlighting their significance in evaluating the company's financial health. The analysis incorporates competitive strategies employed by Marks & Spencer, such as discount policies, to maintain a competitive edge in the retail market.

INTRODUCTION
Business economics is an term that is used to demonstrate the economic concept while
implementing into the practical business practises. This report is based on the case study of
Marks and Spencer Company in context to management of business and economic concept
implement in respect to business venture. The organisation was established in the year 1884 by
the founder Michael Marks and Thomas Spencer. The company is associated with the retail
market and hold a headquarter in London, United Kingdom. The organisation contain a global
level of business operations which allow the business to hold a strong dominance in the global
market. This report will discuss the all different role accounting play in the organisation. Various
financial statement will be discussed in this report. Furthermore, performance of te business
venture will be discussed in this report with support of ratios.
MAIN BODY
Business performance and competition
Economic actors are associated with the macro and micro economic aspect of the
business venture. IN process to operate the business operation company get influence with all
these macro and micro environment element or factors influence the business operations of
company. Different factors like political factor is among the key clement or factor influence the
business performance of Marks and Spencer Company which get affected due to these factors or
elements (Prokhorova and et.al., 2018). This become essential for the business venture to get
influence with this macro business environment factor. United Kingdom hold a very stable
political situation which affect the company in process to channelise all different operation and
functional activity. Economic factor on the hand include buying power of customer, per capita
income of people in country and many more. Inflation in economy is another crucial factor or
element that influence the business venture for delivering its performance in market. Social
factor, technological factor and many more are also considered as a core element or factors
influence the business venture in regard to the micro environment features. Marks and Spencer
Company get an direct influence with all these micro and macro environment factor which get
influence the business operations in order to deliver the overall performance of the business
venture.
The economic position of country and further the controlled level of inflation support the
business venture to effective utilise the element of buying power in favour of the business

venture. Marks and Spencer Company follow the strategies like discount policy that allow the
company to take on the competitive advantage in the massive level of competitive environment.
There are various factor which get influence the competitive environment of the firm that include
market competition, buying power of customer, internal business environment of company and
many moire which directly influence the business venture for affecting the competitive
advantage of the business venture (Popkova, DeLo and Sergi, 2021). With the process of proper
pricing strategy and policy company get to entertain the competitive edge in the respective target
market. This has been well-supported by the business venture to understand the key requirement
of the business venture. It can be stated the fact that the business venture get to enjoy the
competitive edge irrespective of the aggressive level of market competition. This become
important for the Marks and Spencer Company to understand the market situation and guide the
company's operations in such a way that business get to enjoy all the key strategic edge that can
cut the market competition for the business venture. Micro economic factor is totally an internal
areas of the business venture which direct the business to drive all its operations and individual
activities in its own way of processing. This tactic will favour the business entity to effective
drive all its operations and functional activities of the business venture in process to take on the
competitive advantage in respective target market.
Role of accounting
Accounting is aboput to project the books of accounts of company associated with the
financial year. This is about to depict and disclose all the transactions and operations entertain by
the venture in the accounting books and accounting terms. The role of accounting is significant
in context to the business venture as it allow and support the company to depict the financial
effect of every transaction of company (Schallmo, Williams and Lohse, 2019). The accounting
is done with support of set of books such as profit and loss account, balance sheet and cash flow
statement prepare by the business venture. The role of accounting is to project all the financial
transaction entertain by the company belong to the respective financial year in the books of
accounts maintain by the business venture.
Accounting play a crucial role in presenting all the transaction inn the books of accounts
maintain by the Marks and Spencer Company. The ultimate impact of the transaction and affair
entertain by the venture is depicted in the books. Further the accounting play role in projecting
all the net outcome business venture has entertained such as profit or loss which company get to

incurred in the books of accounts are also depicted with support of accounting only. The role of
accounting is to measure the financial effectiveness of every single business transaction entertain
by the company (Adisanjaya and Ramantha, 2019). The ultimate aim of the Marks and Spencer
Company is to achieve profit in the business and accoutring allow the organisation to efficiently
ensure the best form of profitability and make a control over various business transactions
entertain by the venture. For example management of Marks and Spencer Company ensure the
efficiency of every single strategy adopted by the company with the use of its accounting effect
that depict whether the transaction could support the profit or loss for the company. Henceforth,
role of accounting is also to ensure the ultimate benefit business venture could get in against to
deliver the business operations. Performance assessment is also done with support of accounting
books only. The management and financial experts at the Marks and Spencer Company calculate
all ratios with the use of accounting books and records maintain by the business venture. This
can be stated that accounting is among the most crucial and significant area of operation that
allow the business venture to understand the real situation of business and direct the company to
identify whether the business operations are considering profit and losses.
Major financial statement
Major financial statement prepare by the business venture cover profit and loss account,
balance sheet and cash flow statement associated with the business venture.
Profit and loss account
This is among the key financial statement associated with the financial reporting practices
denoted by the business. This financial statement depict about the profit which business venture
entertain in the respective financial year. The main aim of this financial statement is to depict the
profitability of the business venture that is entrained by the company in the respective financial
year. All the revenue nature of income and expenses belong to the particular financial year are
presented in this financial record (La Ros, Caserio and Bernini, 2019). The role of this financial
statement is to present the net profitability business venture entertain in the particular financial
year. Company also get to evaluate and identify the effectiveness of the operational efficiency of
the business venture.
Balance sheet
Balance sheet is also among the core financial record and statement prepare by the
Marks and Spencer Company in the respective financial year. This is a projection of all the assets

associated with the respective financial year comprises with current assets along with the fixed
asset of the organisation (Mugambi and Karugu, 2017). Further this statement talk about all types
of liabilities current liability along with fixed liability of the business venture. Capital or equity
invested by the shareholders and directors of company are also reflected in this statement of
financial position of company. Balance sheet is the net projection of the actual financial position
associated with the respective financial statement.
Cash flow statement
Cash flow statement is another statement associated with the financial records of
company. This is a presentation of all the cash nature of inflow as well outflow that business
venture is consider in the respective financial year (Durdyev, Eng and Cheng, 2018). This
statement is more like emphasising the liquidity situation or position of the business venture
belong to any particular financial year. The role of cash flow statement is very important in order
to depict about the actual liquidity position of the business entity.
The above projected financial statement are among the major financial statement and
record associated with the business venture. The financial professional and management of the
Marks and Spencer Company identify the net financial position or situation of company wit
support of all these financial record and statement associated with the business entity. All these
financial record associate with the company that show the net or ultimate outcome in financial
term company could grab by channelising all different business activities.

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