Financial Management: Marks and Spencer - Essay Example

M&S have more than 278 stores across 39 countries and plans for further expansion is on the cards on the international front. M&S has been consistent in its performance both in financial and non financial aspects. Looking in to the non financial performance of the organization it is evident that the performance is on the positive side and encouraging for the investors. Average weekly footfall, half of M&S stores have footfall analysis system in which the camera tracks the visits and compares with it with sales.

In 2007/08 M&S used the upgraded version by using thermal image cameras that has the ability to people even if they come in groups. The no of stores which have this facility was increased from 33 to 260 which is a good sign of willingness to improve. Mystery shopper tracker. It is also understood that each of their store has some anonymous visitor at least once in a month and twice in case of M&S flagship stores. The mystery shopper evaluates various aspects like price, service quality etc. During the year 2006-07 the carbon dioxide and equivalent emissions ( co2-e) produced by the UK and Republic of Ireland stores, offices, warehouses, business travel and logistics stood at 517,000 tones and in 2007/08 it was reduced to 469 tones a decrease of 9% despite an increase in the sales floor area by 5%.

By 2011 M&S plans to reduce it even further and keep it to bare minimum. Even energy efficiency has shown good improvement in the last two years. For example, during 2006/07 energy consumption stood at 68 kWh/sq.f and during 2007/08 it stood at 65 kWh/sq a decrease of 4% and by 2011/12 there is a good scope for further reduction. There has been a considerable reduction in waste sent to land from 2006/07 to 2007/08. Figures show a reduction of 6% i.e. from 54,000 to 51,000. (www.marksandspencer.com)Financial performance of M&SThe financial performance of Marks and Spencer's shows consistent growth year after year.

Several financial parameters indicate good financial health of the organization. M&S's overall group revenue has seen a steady rise form 2006 to 2008. For example, the UK retail revenue for the period 2005/06 stood at 7275.0'm and grew to 7,977.5 during 2006/07 and 8,309.1 during 2007/08. Revenues from their international retail also grew at a steady pace i.e. from 522.7'm in 2005/06 to 712.9'm in 2007/08. The group also reported an operating profit of 855'm in 2005/06 to 1089.3'm in the year 2007/08.

The groups profit before tax stood at 751m in 2005/06 to 1,007.1 in 2007/08. (www.marksandspencer.com, 2008) Shrinking profitsIf one goes in to the details of the profit statement, then it gives us some reason to worry. The groups operating profit for the year 2005/06 was 855'm and in 2006/07 it was at