Debenhams Accounting Ratio Analysis - Case Study Example

The paper "Debenhams Accounting Ratio Analysis" is a brilliant example of a case study on finance and accounting. Debenhams PLC recorded an impressive performance in our last financial year despite the current challenges facing the departmental store's industry because of changes in weather and consumer spending constraints because of the downturn of Europe and worldwide economic condition. The positive results are attributed to the company management and all those involved in the formulation, analysis, and implementation of the company strategy in our day to day operation. Debenhams strategy pertaining to the four pillars which include, increasing focus on retails shops around the United Kingdom, availing compelling products to customers, increasing channels of distribution in order to increase market share, and expanding the international market has proven to yield positive results since its implementation. We evaluated this strategy using market share which shows an increase of 20%, changes in company turnover recording an increase by 2.6%, and finally, profit before tax that we recorded an increase by 4.2%. Therefore, we should constantly work hard in improving this strategy and developing new ones in order to maintain or improve our financial performance of the company (Debenhams PLC, 2012). In order to increase or maintain constant company growth, we will require additional funds to finance the implementation of strategies, research, and development. Through intense research and analysis of the overall situation, we realized will need an additional 10% of the net asset (66.1 million pounds) in order to successfully achieve the company's middle-term and long-term goals set by strategic management.

• INTRODUCTION

Debenhams PLC desires to raise 66,100,000 pounds to fund the company’s strategies in order to achieve its midterm and long-term goals as set by the company management. The company is considering raising this amount by either borrowing or selling the share to the public considering the one with the least cost and minimal risk since each source has its merit and demerit.