The financial performance of Marks and Spencer Assignment - 1

The financial performance of Marks and Spencer - Assignment Example etail outlets also sell mid to high priced apparel, food, and household items under the companys private label brands, including Autograph, Classic, per una, and Portfolio. The British retail icon operates in about 330 M&S department stores and some 340 Simply Food shops throughout the UK. Beyond Britain, it spreads across over 325 locations, mostly franchises, in about 40 countries, including China, India, Indonesia, and South Korea (Google Finance n.d.). The company recorded revenues of  £9,536.6 million ($15,272.9 million) during the financial year ended April 2010 (FY2010), an increase of 5.2% over 2009 (JP Morgan 2011). Past financial performance of the firm or an organization is an important indicator for predict or estimate the future of the company. Investors and shareholders measure and value this financial performance (amongst other factors) as a means to assess the expected returns on their investments (Alvarado 2011). Calculation of a number of financial ratios for the firm’s financial statements is considered a fairly safe way to evaluate the firm’s past performance, its evolution and key financial issues. The analyses are very valuable for firm’s management as well in order to identify opportunities to improve performance at the department, unit, division or organizational level. In some cases, ratio analyses can predict future bankruptcy (Loth 2011). Reading and understanding financial ratios is also the quickest method to assess the company’s operating performance. In order to understand the company well from financial statements, we need to conduct analyses at three levels: (1) Profitability analyses to see if the company is profitable or not, whether the company is a growing company or a stagnant one. (2) Financial Health analyses from ratios that indicate whether the company is sound or not and what is its presence state of solvency. (3) Finally, company specificities will be explored in terms of key growth drivers and competitive