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Marks and Spencer - Essay Example

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Undergraduate
Essay
Finance & Accounting
Pages 6 (1506 words)

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Marks & Spencer: Financial Report Marks & Spencer: Financial Report Introduction: Marks & Spenser is one of the top UK’s international retail stores that deals with clothing, home products and foods…

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Marks and Spencer

Additionally, they employ over 78,000 people all over the world (Marks and Spencer, 2012a). Financial Analysis of M&S: Despite global recession the company has managed to increase its revenues from its UK and international operations. An important point to make here is that M&S is a UK based brand with 50% of its stores being in UK. Its revenue generation is mostly derived from UK operations which accounts for 90% of the total revenue of the company. Profitability: The company has shown steady increase in the revenues in the last three years. In 2011 the revenue increased by 2%, followed by the same in 2012. However, the operating profits in the last two years have not increased in the same line. In 2011, the operating profit was ?836.9m which fell to ?746.5m, resulting in operating profit margin of 9.53% in 2011 and 8.84% in 2012. This clearly shows that company’s cost control is weak and the cost of goods sold has not increased in the same line as revenues. The reason for such instability in profits for 2012 is the expansion and improvement plan the company is implementing till 2013 which will result in increased sales and satisfied consumers in the future. Because of the very reasons the company has experienced increased cost of sale, interest expense, administrative and selling expenses. ...
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