The Financial Performance of Marks and Spencer - Research Paper Example

The company, by applying prudent marketing techniques, has been able to grab a market share of around 11.7% by value and 12.4% by volume. Marks and Spencer have also been actively involved in the business of marketing and selling edible products which have earned the company immense revenue in the past few years. Through its unmatchable food quality, Marks and Spencer are now regarded as one of the finest when it comes to quality food products. The financial outlook of the company also looks quite stable.

During the financial year of 2012, the company has been able to increase its revenue by an impressive 2.0% to a striking? 9.9 billion though the operating profit of the company took a slight downward plunge of about 1.2%. In addition, the financial ratio analysis of the company and the comparison of the company with its competitor also show that a positive financial outlook can be forecasted. 

The paper presents and evaluates the financial performance of Marks and Spencer, a highly recognized name in the fashion market. Marks and Spencer is a listed company and has been operating lucratively for the past many years. The company operations have been highly successful in the past many years and it portrays a sound and stable financial outlook. Following is a brief and recent financial highlight of the company 

The paper briefly discusses the historical financial performance of the company focusing on group revenue and profit before and after tax. Moving forward, the paper presents a comparison of the current and last year's financial performance of the company through financial statement ratio analysis. The primary reason to conduct a ratio analysis is to quantify the results of the operations of a company and compare them with that of the prior year(s) to assess different aspects of the financial feasibility.

The ratios are divided into profitability, liquidity, and gearing ratios. The paper identifies the areas, through ratio analysis, where the company is performing well and where it needs improvements. In conclusion, the paper presents a comparison of the financial and operational performance of Marks and Spencer with one of its primary competitors, Debenhams. Major financial ratios are compared and in addition, historical share prices are also analyzed for both companies to identify which company has a better market capitalization and better reputation from an investor’s perspective.

For the financial analysis, the historical financial information from the financial year 2012 till 2008 has been used. During the current financial year 2012, the UK retail industry witnessed a mixed trend. As reported by Marks and Spencer in its press releases, the start of the current financial year was better than expected and the company reaped a great profit. However, it was observed that the latter half of the current year proved to be more difficult for doing business, especially the month of August and September.