Financial accounting Essay Example | Topics and Well Written Essays - 1750 words

Financial accounting - study ExampleMarks and Spencers well established business attracts a great deal of consumer constitute irrespective of demography. The primary business of the corporation comprises of selling general merchandise which mainly consists of womenswear. menswear and an expanding kids wear. The company, through its live(a) and effective marketing tactics, has able to capture market share of around 11.0% by value and 11.2% by volume. An other source from where the company earns a great deal of its revenue is through selling diet items. Marks and Spencer is the leading provider when it comes to selling fine quality pabulum. The company sells everything from fresh meals to canned food items, highly acclaimed and praised range of wines to other groceries products. The company has modify its shelf availability and has adopted the strategy of conversion its food range. The proactive approach has resulted in an sum up of 1.8% in sales revenue from food business. T he pecuniary year 2010 proved to be another progressive year for Marks and Spencer. During the circulating(prenominal) year, Marks and Spencers revenue change magnitude by 5.2% during the afoot(predicate) year to an impressive ?9.5 billion which has caused the operating profit to increase by 9.8%. The company, following its growth strategy, aspires transform its operation into multi channel business. The company has taken major stairs in investing its direct sales business which enhanced the revenue by 27% during the current financial year. In addition, the company is actively following its strategy of refurbishing its stores and giving them a new and improved look. The refurbishment has resulted in an increased storage space and has created a fashionable shopping environment. The following fudge compares the financial results of Marks and Spencer, for the financial year 2010 with that of the year 2009. As quite evident from the above comparison, the financial outlook of the c ompany has improved. The increase in group revenue primarily pertains to the increase in like-for-like sales as well as the addition of new stores and outlets, both in and outside of England. Since Marks and Spencer do a significant number of its sales overseas, the companys revenue is majorly increased due to the variation in exchange rate. Although the recent credit crisis and global economic meltdown proved to be a hurdle, but the impact was offset by prudent risk management and apt allocation of great investment. The gross profit to sales ratio for the year ended December 31, 2010 was 8.93% which has decreased by 0.67% during the current year. Despite the decrease in gross profit to sales ratio, the net profit of the company has increased by ?16.2 million. The increase in net profit is due to the fact that during the current year the company did not spend any exceptional cost which it incurred during the prior year on strategic restructure. In addition, the company took strong measures to control its finance cost during the current year and curtailed it by ?52.3 million. An analysis of balance wheel sheet of Marks and Spencer highlights the fact that during the current year the companys non-current liabilities, in terms of borrowings from banks and other financial institutions, was comparatively less than the previous year. The fact that Marks and Spencer curtailed its borrowings highlight the fact that the company is think on gearing is business through raising capital by issuance of share capital, instead than acquiring capital from financers. The earnings per share (EPS) of