Marks & Spencer.

Essay by goUniversity, Bachelor'sA-, May 2003

download word file, 7 pages 4.0

Applied Financial Skills

Financial Analysis: Marks & Spencer

Submitted to: Charles Sandilands

Leeds Metropolitan University

Business School

Submitted by: Craig Slater

Date of submission: 23rd January 2003


This report analyses the financial position of Marks & Spencer, one of the UK's leading retailers of clothing, foods, home ware and financial services, serving 10 million customers a week in over 300 UK stores. The Company also trades in 30 countries worldwide, and has a Group turnover in excess of £8 billion.

Firstly, the financial analysis will outline Marks & Spencer's current financial position. Furthermore we will discuss the method in which the company makes financial decisions. The analysis will involve the evaluation of common accounting statements such as balance sheets, profit and loss accounts and cash flow statements.

The Accounting Cycle

Traditionally businesses operate on a twelve-month cycle which may be the same as the calendar year January to December or perhaps the same as the Tax year, 6 April of one year to the 5 of April of the next year.

Alternatively, some businesses operate from the date the business first began to trade, for example 1 July of one year to the 30 June the next year.

During the twelve-month period the business receives many documents of a financial nature which have to be entered in the books of account using either a manual or a computer system.

At the end of each month the books are usually balanced up and a trial balance prepared from which the final accounts (to be discussed later) may be prepared. Also, at the end of each month, outstanding accounts are usually settled, wages and salaries are paid and money received during the month from the organisation's debtors are all recorded.

Most organisations use computer system accounts, at the end of each...