Make conclusion of a financial analysis report

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timer Asked: Nov 20th, 2016

Question description

The report has already constructed the report and every single ratio is concluded... Just need the final conclusion. It should include numbers data, opinion and further development recommendation. Some idea of conclution has already listed. shouldn't be too hard if you are good at accounting.

FINANCIAL POSITION OF NEXT PLC 18/11/2016 Contents 1. Executive Summary 2. Introduction 3. Swot Analysis 4. Segmental Analysis 5. Profitability Ratios 6. Efficiency Ratios 7. Financial Ratios 8. Liquidity Ratios 9. Investment Ratios 10. Z scores 11. Conclusion 12. Appendices 13. References Executive Summary This report provides an analysis and evaluation of the financial position of Next Plc. Some of the methods used for analysis include SWOT analysis, segmental analysis, profitability ratios, financial ratios and liquidity ratios. All data and full calculations can be found attached in the appendix. Due to the high uncertainty arising this year, 2016 has proved to be a challenge for Next. From the analyses, Next is inefficient at converting goods and so, has high levels of borrowing in relation to its equity. However, the increase in international sales and higher demand in Next Directory acts as a drive of growth for Next. Therefore, Next should focus on improving their conversion of goods into cash to borrow less from the bank. This could be done through having more frequent production periods per year. In addition, Next should focus on Next Directory and on markets outside the UK. Overall, Next is in a good position despite difficulties that the retail sector has been facing. (Liquidity and Investment part) Liquidity: Next meets short term obligations fully with a strong liquidity, while M&S does not. Next’s quick ratio over five years is 1:1, so able to meet short term obligations fully. Investment: Next PLC shows superior performance and a profit margin upward trend for the last five years; Return on Equity 200% thus very attractive investment compared to M&S. Introduction NEXT Plc is a large company, made up of NEXT Retail and NEXT Directory, founded in 1982 and 1988 respectively and more recently including NEXT Sourcing and Lipsy. As of January 2016 ,there were 540 stores in the UK and Ireland, an average of 4.6 million active NEXT Directory customers and 51,179 employees (NEXT Plc, 2016). NEXT offers a large variety of clothes and homeware and a cheap and popular next day delivery service to homes or a chosen store, to stand out from competitors. With the UK deciding to leave the EU, this has caused uncertainty in the UK economy and a significant drop in the value of the pound sterling. As a result of this, there are now some factors that will inevitably affect Next Plc in the near future. Due to the low value of the pound, imported textiles will be more expensive (Cahill, 2016), thus increasing production costs. However Next’s international sales could react positively to this. There is also potentially an underlying fall in demand in the clothing sector which might hamper their sales and therefore profits (Cahill, 2016), and a predicted hike in inflation for next year might cause a further fall in demand if wages don’t increase with inflation (BBC News, 2016). All of these factors will be taken into account when we make future recommendations for Next Plc. Marks and Spencer has been used as a comparison firm for this report as it is in the same industry and has a large clothing and homeware sector like NEXT. Swot Analysis One of the key strengths of Next plc is it has taken advantage of the growth in online demand for its products. In 2015 the online and catalogue business grew by 8% (Nextplc, 2016). This provides an opportunity for Next plc to further invest in its online business and its catalogue as it is a growing sector. For example, one of the last measures taken by the company was to give the option for customers to collect and return goods through third party parcel shops (Nextplc, 2016). These initiatives make Next plc adaptable which is an important strength in a market as competitive as retail. Another strength Next plc has is the good quality of its products. The company has made it an important goal to assure that it sources its products ethically, particularly ensuring there is no forced or child labour and that fair wages, equal opportunities and employment security are respected (Nextplc.co.uk, 2016). Since Next plc has also a home section, there is an opportunity for the company to invest in profitable new space which would consist of bigger stores; a few already exist and have proven to be successful (Nextplc, 2016). The company has also had strong cash flows which show a strong liquidity in income. Internationally, Next plc has opened many stores outside of the UK, the international sales have risen substantially (Rigby, 2016); there is therefore an incentive to continue extending the number of stores. The company still shows weaknesses, the first is that warehouse and distribution costs have risen as a result of increased international sales (Nextplc, 2016). This means that NEXT did not evaluate properly the possibility of an increase in demand. Another weakness is the price point of Next plc, what it offers is standardised as it targets the middle class, no particular uniqueness to it; this participates to the notion that the company is considered overpriced for what it offers. Furthermore, the competitiveness of a retail store is often centered around the price point. The company also faces many threats such as the economic instability that reigned in 2015/16; in fact, the business has declared that the year 2016/17 would be as challenging as the year 2008 (Nextplc, 2016). This instability comes partly from the Middle East that is facing falling oil prices, as well as Russia which presents geopolitical unrest. Brexit has also contributed recently to uncertainty and a rapid devaluation in the pound (Wood, 2016). The consequent additional costs will have to be absorbed by the company or passed on to the consumer. Finally, the company shows a few more characteristics that fall under an analysis of the financial statements and this will be addressed later in this report. As a comparison we can take Marks and Spencer, the company shows many of the same strengths and opportunities as Next plc, in particular the development of the online business. In 2015 online sales rose by 23.4% (Annualreport.marksandspencer.com, 2016). However, one of the key differences is that the sector M&S has performed well in has been the food department. Sales in the clothing and home department have been unsatisfactory for a long time. One of the last propositions by M&S was to restore its price position by lowering prices and at the same time reducing the promotional stance (Annualreport.marksandspencer.com, 2016). This poor performance has actually meant that M&S is scheduled to close many stores (Wood, 2016). Contrary to Next plc, M&S has not received a good reputation after a few articles surfaced condemning it for using child labour (Milne, 2016). M&S has also had problems with availability in some of its international stores and is also being affected by the instability internationally on a higher level than Next plc since it has many more stores outside of the UK. Segmental Analysis NEXT is made up of six segments: NEXT Retail, NEXT directory, NEXT International, NEXT Sourcing, Lipsy and Property Management. Although all segments have had increased profits from January 2012 to January 2016 overall, this could be due to factors like inflation, so we have looked at the proportion of profit which each segment accounts for. NEXT Retail, a chain of more than 500 stores in the UK and Eire, and NEXT Directory, an online and catalogue shopping business with over 4 million active customers and international websites serving approximately 70 countries, have made up the largest proportion of total segmental profit over the last 5 years. However, at the start of 2012, there was a large difference in the percentage of segmental profit they accounted for, with NEXT Retail attributable for 52.03% and NEXT Directory attributable for 42.01%. In contrast, at the beginning of 2016, NEXT Directory was attributable for 46.12%, more than the 45.54% NEXT Retail was responsible for. The proportions of profit for these two sectors have converged from January 2012 to January 2016 and now fluctuate around each other, with both percentages close to 45%. This could be due to the growth of NEXT Directory, which in 2012 only served approximately 50 countries and only had around 3 million active customers, the competitive delivery deals NEXT Directory offers, or in general, consumers switching from shopping in store to online. It is important that NEXT Plc continues to grow NEXT Directory, as it is now a major source of profit and NEXT Retail cannot be relied upon as much to generate the largest proportion of profit. The only other segments which have shown noticeable trends in proportions of profit over the 5 years are NEXT Sourcing, (an increase from 3.39% to 5.70%), which designs and sources NEXT branded products, and Lipsy, (an increase from 0.21% to 0.60%) , which designs and sells Lipsy and other branded younger women’s fashion products. As they are both growing segments, perhaps NEXT could invest more in them in the future to promote them even further. Looking at which geographical locations have made the most revenue for NEXT, the UK had the highest revenue of £3,781.9m at the start of January 2016, while the other locations combined had a revenue of £395m. As with the analysis of the different sectors, the aggregate figures alone do not show much, so we calculated the percentage of total revenue which was attributable to each geographical location. The general trend for NEXT Plc is that there has been a steady decline in the percentage of total revenue attributable to the UK from 2012-16 and a steady increase in the revenue attributable to the Rest of Europe, the Middle East, Asia and the Rest of the World. This shows that NEXT now relies more on international business to create revenue than before and growing the company more internationally could be an effective way of creating more revenue because of the large amount of potential customers outside of the UK. It was difficult to compare the Marks and Spencer sectors with NEXT, as they have different sectors and the sector profits were not calculated by Marks so only the geographical region revenues were compared. At the start of 2016, Marks and Spencer made 89.7% of its total revenue in the UK and 10.3% internationally and NEXT made 90.5% of its revenue in the UK and 9.5% internationally. Both companies had a similar share of revenue generated internationally. Overall from 2012-16 though, NEXT has seen a rise in the percentage of revenue generated internationally, while Marks and Spencer has seen a decrease. This could show that Marks and Spencer is beginning to focus more on UK stores and is relying on those to create more revenue. This has been exemplified recently, as Marks and Spencer has announced it will “close loss-making shops in 10 international markets” and it is changing many stores in the UK into food stores, closing some homeware and clothing stores and opening new Simply Food stores, after a fall in fashion sales and profits. On the other hand, NEXT is growing more internationally and trying to create more of its revenue in international countries. Profitability Next Plc has seen an increase in its gross profit percentage over the last five years from 30% to 35%, indicating that the company has either been able to strike better deals with its suppliers, thus reducing its cost of sales, or has been increasing the mark-up on its goods. Its operating profit % has also been increasing in line with gross profit, from 17% to 21%, informing us that they have been able to manage their administration expenses effectively as the business continues to grow. It also informs us that Next Plc’s gross profit is more than enough to cover all of the other costs incurred by the company, therefore leaving more profit available to be shared amongst shareholders or keep as retained earnings. Taking a look at the Return on Earnings for Next Plc, in the financial year ending 2016 we see that it has a value of 2.14, so the owners will see a return of 2.14x on the book value of their investment. Comparing these figures to those of Marks and Spencer Group Plc, we see that they have similar gross profit percentages but M&S’s has remained the same at ~38% over the last five years. However, there is a big difference in their operating profit percentages, with M&S’s being much lower and decreasing from 9% to 5% over the last five years, which indicates M&S is not able to keep their administration expenses under control. This results in M&S having a much lower ROE of 0.12 at financial year end in 2016, which is 18x less than Next Plc’s. Efficiency Taking a look at Next Plc’s collection and payables days, we can see that in the financial year ending in 2016, it took them on average 81 days to receive payment from their customers, which is an exceptionally long time, and only had on average 30 days to pay their suppliers. This resulted in them having an operating cycle of 117 days, which is an extremely long time, which indicates that Next is very inefficient at converting goods into cash, and therefore profit, and needs some short term financing to be able to cover this period of cash shortfall. Taking a look at the balance sheet, we see that they achieved this through increasing their overdraft and short term loans, all of which involves paying more interest. Compared to M&S, which had collection and payables days of 4 and 60 days respectively and an operating cycle of -9 days, we see that M&S is the most efficient it can be at converting goods sold into cash. This means that they have 9 days where they are able to hold onto the cash before paying their suppliers, allowing them to use it for other things in the meantime. Liquidity Ratios The current ratio of Next PLC over the 5 years have been above 1 meaning that the company can be able to meet its short term obligations in full. This is an indication of a strong liquidity position and thought the recommended ratio is 2, Next PLC has almost achieved that ratio. Comparatively, Next PLC has outperformed M&S PLC in as far as the current ratio is concerned. The current ratio of M&S PLC has been below 1 through the 5 year, an indication of · a poor liquidity position in this company since it cannot be able to meet its short term obligations in full. This being the case, Next PLC proves to be performing very well in this industry. The quick ratio of Next PLC over the 5 years have been above 1which actually beats the recommended ratio of 1:1. This is indicative of a strong liquidity position which means that Next PLC can be able to meet its short term obligations without relying on the sale of inventory. Comparatively, M&S PLC is doing poorly since the quick ratio is way below 1. This again places Next PLC ahead in this industry. Investment Next PLC dominates in the performance. It’s evident that this company is very profitable with good returns on investment. Notably, the profit margin over the 5 years has been showing an upward trend from 16.84% in 2012 to 20.02% in 2016. This is evident of likely better performance in future and therefore investors would be interested to invest in this company. The return on asset is excellent with returns above 200% which is indicative of a very attractive company to investors given such high returns on equity. The return on capital employed as well as return on assets are also good and therefore, the overall performance of this company makes Next PLC a suitable investment for interested investors. Comparatively, M&S PLC which operates in the same industry exhibits a lower performance and profitability. This confirms Next PLC as a company which is well rooted and performing in this industry. For M&S PLC, the profit margins are generally low over the years with a low return on equity which makes this company to be less preferred by investors compared to Next PLC. In conclusion, Next PLC is a more profitable investment in this industry. Financial Ratios Since 2013, Next has relied more on borrowing rather than shareholders for finances, as seen from their gearing ratio that ranges from 73.1% to 78.2%. Their D/E ratio also shows this, with values higher than 270% in the last four years. Their interest cover has never gone over 1.06, showing that Next's PBIT can just about cover its interest payments. In 2014 and 2015, their interest cover fell to 0.9 and 0.97 times respectively, which meant their PBIT were unable to afford the interest they will have to pay. On the other hand, their dividend cover has been high, with a maximum of 4.33. With both the interest and dividend covers combined, Next has been consistently lacking in its ability to pay interest and has, possibly, an excess amount of retained earnings. It would make more sense for Next to borrow less and rely more on shareholders to finance its activities. However, when compared with Marks & Spencers (M&S), Next is in a better position. Even with a lower proportion of debt, M&S has a gearing ratio of 46% and a D/E ratio of 85% in 2016, M&S is also struggling with paying its interest, where their interest cover is only 0.338 times in 2016 and has been less than 1 since 2013. Their dividend cover does not seem to be in much excess, with 2.15 times in 2016. Therefore, M&S cannot borrow more in order to increase its retained earnings. This could indicate that M&S will not be able to maintain their dividend of 11.6p per share. Still, if the working capital and working capital ratio is also taken into consideration, Next is performing much better than M&S, with their current assets being 1.4 times of their current liability, while M&S has lower current assets than liabilities. Z-scores The Z-Score measures the probability of a company going bankrupt. Next scored 6.66 in 2016, which is a decline from its peak of 7.36 in 2015, but they are still at an extremely low risk of going bankrupt. On the other hand, M&S scored 2.98, which means they are at a greater risk of bankruptcy, however the chances of this happening are still low. Conclusion Summary for Conclusion Profitability: · Next just needs to keep up the good work, their gross margin is high enough to ensure they can cover all of their costs and return a decent profit · M&S needs to either drastically reduce their expenses or increase their gross margin to improve profits Efficiency: · Next needs to improve on their operating cycle so they don’t have to rely on big overdrafts and short term loans. They can reduce it by either improving the speed at which they receive payment from their customers and/or renegotiating their contract with their suppliers to increase the amount of time they have before they need to pay for the goods (Note: Next Sourcing supplies some of Next Retail & Directory, so why can’t they adjust payables days internally??) · M&S is very efficient at converting goods into cash, no need for them do anything here Next PLC appears to rely heavily on borrowing to fulfil its expansion, which might prove detrimental in the long term. Therefore, Next should strengthen its financial principles, regardless of their successful recent years. A further focus on emerging markets possibly and a more frequent release of new products akin to Zara might prove a successful bet for Next. - Continue to grow NEXT Directory as this is the sector which makes up the most of the total sector profits at the moment and NEXT cannot rely on NEXT Retail as much anymore. - Invest more in NEXT Sourcing and Lipsy as these parts are growing as a proportion of segmental profit. - Continue to expand internationally as have been doing and the fall in the pound might help sales internationally. Growth in proportion of revenue attributable to Rest of Europe, the Middle East, Asia and the Rest of the world over the last five years. Appendices References
Next Segmental Profits (finan 2016 £ mil % 2015 £ mil % Next Retail 408,1 45,54 383,8 46,48 Next Directory 413,3 46,12 376,8 45,63 Next International 10,4 1,16 11,7 1,42 Next Sourcing 51,1 5,70 41,4 5,01 Lipsy 5,7 0,64 5,1 0,62 Property Management 7,5 0,84 6,9 0,84 Total 896,1 100 825,7 100 Next External Revenue by Geographical L 2016 £ mil % 2015 £ mil % United Kingdom 3781,9 90,5 3648 91,20 Rest of Europe 238,2 5,7 225,6 5,64 Middle East 75,7 1,8 60,4 1,51 Asia 52,8 1,3 37,5 0,94 Rest of world 28,3 0,7 28,3 0,71 Total 4176,9 100 3999,8 100 NEXT Retail, a chain of more than 500 stores in the UK and Eire. mental Profits (financial year ending January) 2014 £ mil % 2013 £ mil % 2012 £ mil % 347,7 45,94 331,1 48,20 323,7 52,03 358,5 47,36 302,1 43,97 262,6 42,21 12,1 1,60 8,4 1,22 7,9 1,27 34,1 4,51 30,8 4,48 21,1 3,39 2,7 0,36 2 0,29 1,3 0,21 1,8 0,24 12,6 1,83 5,6 0,90 756,9 100 687 100 622,2 100 NEXT Directory, an online and catalogue shopping business with over 4 million active customers and international websites serving approximately 70 countries. NEXT International Retail, with around 200 mainly franchised stores across the world. NEXT Sourcing, which designs and sources NEXT branded products. Lipsy, which designs and sells Lipsy and other branded younger women’s fashion products. Property management, holds properties which are sub let to other segments and external parties. by Geographical Location (financial year ending March) 2014 £ mil % 2013 £ mil % Percentage of Reve 2012 £ mil % 3447 92,2 3319,3 93,2 3245,7 94,3 197,7 5,3 171,1 4,8 148,1 4,3 UK Rest of Europe 46,5 1,2 34,2 1,0 28 0,8 19,6 0,5 13,9 0,4 11,2 0,3 29,2 0,8 24,3 0,7 8,1 0,2 3740 100 3562,8 100 3441,1 100 Middle East Asia Rest of World 2012 of more than 500 stores online and catalogue with over 4 million active rnational websites ely 70 countries. Percentage of Overall Profit 60 50 Next Retail ch designs and sources Next Directory 40 Next International 30 Next Sourcing 20 Lipsy s and sells Lipsy and nger women’s fashion 10 Property Management 0 2012 2013 2014 ent, holds properties other segments and ercentage of Revenue by Geographical Location 100 90 70 60 50 40 30 20 10 0 2012 2013 2014 2015 2016 Percentage % 80 2015 2016 Percentage % Retail, with around 200 tores across the world. 2016 2015 60 2014 50 30 20 10 0 Percentage % 40 2013 2012 Marks and Spencer Profits Clothing and Home Gross Profit Food Gross Profit UK Gross Profit UK Operating Costs M&S Bank UK Operating Profit International Operating Profit Group Operating Profit 2016 £ mil 2180,7 1806,2 3986,9 -3320,1 59,9 726,7 58,2 784,9 % 54,7 45,3 Marks and Spen UK Reve International Group Rev Marks and Spencer Revenue UK Revenue International Revenue Group Revenue 2016 £ mil 9470,8 1084,6 10555,4 % 89,7 10,3 Next (financial year ending Janua 2016 2015 2014 Gross profit (£mil) Revenue (£mil) 1452,7 4176,9 1343,4 3999,8 1240,1 3740 Gross Profit % 34,78 33,59 33,16 Operating profit (£mil) 867,2 812,1 722,8 Opearting Profit % 20,76 20,30 19,33 Profit before tax (£mil) 836,1 794,8 695,2 Profit before tax (PBT) % 20,02 19,87 18,59 Net profit (£mil) 666,8 634,9 553,2 Profit for the Year % 15,96 15,87 14,79 Total Assets (£mil) 2284,1 2244,4 2074,3 Return on Assets (ROA) % 37,97 36,18 34,85 Current Liabilities (£mil) 1170,6 886,6 834,5 Return on Capital Employed (ROCE) % 77,88 59,81 58,30 Equity (£mil) 311,8 322 286,3 Return on Equity (ROE) 2,14 1,97 1,93 Gross Profit % 45 40 35 30 25 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 Return on Equity 3 Next M&S 3 3 2 2 1 1 0 2010 2011 2012 2013 2014 2015 2016 Next M&S Next (financial year ending January) 2013 2012 2011 2010 1125,8 3562,8 1045,3 3441,1 1008,7 3453,7 996,9 3406,5 31,60 30,38 29,21 29,26 695,1 601,8 574,8 529,8 19,51 17,49 16,64 15,55 666,5 579,5 551,4 505,3 18,71 16,84 15,97 14,83 508,7 474,9 401,1 364,1 14,28 13,80 11,61 10,69 1828 1819,1 1736,6 1693,5 38,03 33,08 33,10 31,28 816 742 832,9 758,1 68,69 55,87 63,61 56,64 285,7 222,7 232,3 133,6 1,78 2,13 1,73 2,73 Operating Profit % 25 20 15 10 5 0 2010 2011 2012 2013 2014 2015 2016 Marks & Spencer (financial year ending March) 2016 2015 2014 2013 Gross profit (£mil) Revenue (£mil) 4128 10555 3986 10311 3871 10310 3797 10027 Gross Profit % 39,11 38,66 37,55 37,87 Operating profit (£mil) 584 701 695 756 Opearting Profit % 5,53 6,80 6,74 7,54 Profit before tax (£mil) 489 600 580 564 Profit before tax (PBT) % 4,63 5,82 5,63 5,62 Net profit (£mil) 408 487 506 467 Profit for the Year % 3,87 4,72 4,91 4,66 Total Assets (£mil) 7626 7736 7704 7362 Return on Assets (ROA) % 7,66 9,06 9,02 10,27 Current Liabilities (£mil) 2105 2112 2349 2238 Return on Capital Employed (ROCE) % 10,58 12,46 12,98 14,75 Equity (£mil) 3445 3200 2708 2505 Return on Equity (ROE) 0,12 0,15 0,19 0,19 Return on Assets % 40 25 35 20 30 25 15 10 Next 20 Next M&S 15 M&S 10 5 5 0 0 2010 2011 2012 2013 2014 2015 2016 cer (financial year ending March) Next M&S 2012 2011 2010 3755 9934 3725 9740 3619 9537 37,80 38,24 37,95 747 837 852 7,52 8,59 8,93 658 781 703 6,62 8,02 7,37 513 612 526 5,16 6,28 5,52 7182 7162 7153 10,40 11,69 11,91 2005 2210 1891 14,43 16,90 16,19 2790 2674 2169 0,18 0,23 0,24 Next (financial year ending January) 2016 2015 2014 2013 2012 Trade Recievables (£mil) 931,6 712,5 703,6 601,2 597 Revenue (£mil) 4176,9 3999,8 3740 3562,8 3441,1 Collection Days 81 65 69 62 63 Trade Payables (£mil) 219 224,9 194,8 189,2 193,1 Cost of Sales (£mil) 2724,2 2656,4 2499,9 2437 2395,8 Payables Days 29 31 28 28 29 Inventories (£mil) 486,5 416,8 385,6 331,8 371,9 Inventories Days 65 57 56 50 57 Inventory Weeks 9 8 8 7 8 Operating Cycle (days) 117 91 97 83 91 Operating Cycle % 28,71 22,61 23,91 20,88 22,55 Total Assets (£mil) 2284,1 2244,4 2074,3 1828 1819,1 Asset Turnover 1,83 1,78 1,80 1,95 1,89 ar ending January) Marks & Spencer (financia 2011 2010 533,3 520,2 3453,7 2016 2015 116 124 3406,5 Trade Recievables (£mil) Revenue (£mil) 10555 10311 56 56 Collection Days 4 4 195,5 175 1022 968 2445 2409,6 Trade Payables (£mil) Cost of Sales (£mil) 6427 6326 29 27 Payables Days 58 56 368,3 309 Inventories (£mil) 800 798 55 47 Inventories Days 45 46 8 7 Inventory Weeks 6 7 82 76 Operating Cycle (days) -9 -5 20,44 19,20 Operating Cycle % -1,00 -0,45 1736,6 1693,5 Total Assets (£mil) 7626 7736 1,99 2,01 Asset Turnover 1,38 1,33 Marks & Spencer (financial year ending March) 2014 2013 2012 2011 2010 127 108 115 98 89 10310 10027 9934 9740 9537 4 4 4 4 3 1144 973 989 919 792 6439 6230 6179 6016 5918 65 57 58 56 49 846 767 682 685 613 48 45 40 42 38 7 6 6 6 5 -12 -8 -14 -11 -8 -1,66 -0,98 -1,93 -1,40 -0,94 7704 7362 7182 7162 7153 1,34 1,36 1,38 1,36 1,33 Next (financial year ending January) 2016 2015 2014 Current Assets (£mil) Current Liabilities (£mil) 1642,2 1170,6 1616 886,6 1468,1 834,5 Current Ratio 1,40 1,82 1,76 Inventories (£mil) Quick Assets (£mil) 486,5 1155,7 416,8 1199,2 385,6 1082,5 Quick Ratio 0,99 1,35 1,30 Opening Trade recievables (£mil) Revenue (£mil) Closing Trade Recieveables (£mil) Average Daily Cash from operations (£mil) 712,5 4176,9 931,6 10,84 703,6 3999,8 712,5 10,93 601,2 3740 703,6 9,97 Defensive Interval (days) 107 110 109 ancial year ending January) 2013 2012 1207,8 816 1139,9 742,4 Current Assets (£mil) Current Liabilities (£mil) 1,48 1,54 Current Ratio 331,8 876 371,9 768 Inventories (£mil) Quick Assets (£mil) 1,07 1,03 Quick Ratio 597 3562,8 601,2 9,75 533,3 3441,1 597 9,25 Opening Trade recievables (£mil) Revenue (£mil) Closing Trade Recieveables (£mil) Average Daily Cash from operations (£mil) 90 83 Defensive Interval (days) Marks and Spencer (financial year ending March) 2016 2015 2014 2013 2012 1462 2105 1456 2112 1370 2349 1268 2238 1460 2005 0,69 0,69 0,58 0,57 0,73 800 662 798 658 846 524 767 501 682 778 0,31 0,31 0,22 0,22 0,39 124 10555 116 28,94 127 10311 124 28,26 108 10310 127 28,19 115 10027 108 27,49 98 9934 115 27,17 23 23 19 18 29 Next (financial year ending January) 2016 2015 2014 2013 Earnings Per Share (p) 442,5 419,8 366,1 297,7 Dividends Per Share (p) 158 150 129 105 Dividen Cover 2,80 2,80 2,84 2,84 Current Share Price (p) 6925 7235 6250 4098 Dividend Yield % 2,28 2,07 2,06 2,56 Price/Earnings Ratio 15,65 17,23 17,07 13,77 Marks and Spencer (financial year endin ar ending January) 2012 2016 2015 255,4 Earnings Per Share (p) 24,6 29,7 90 Dividends Per Share (p) 18,7 18 2,84 Dividen Cover 1,32 1,65 2771 Current Share Price (p) 329,5 530 3,25 Dividend Yield % 5,68 3,40 10,85 Price/Earnings Ratio 13,39 17,85 s and Spencer (financial year ending March) 2014 2013 2012 32,5 29,2 32,5 17 17 17 1,91 1,72 1,91 453,7 390 383,7 3,75 4,36 4,43 13,96 13,36 11,81 NEXT (year end Jan) Long-term Debt (£m) Equity (£m) 2016 847,7 311,8 2015 1.073,8 321,9 2014 1.023,9 286,2 2013 792,0 285,6 Gearing 73,1% 76,9% 78,2% 73,5% 271,9% 333,6% 357,8% 277,3% Earnings Per Share (p) Dividend Per Share (p) 450,5 105 428,3 100 366,1 93 320,1 74 Dividend Cover (times) 4,29 4,28 3,94 4,33 867,2 828,8 812,1 838,2 722,8 800,8 695,1 654,4 1,05 0,97 0,90 1,06 608,3 0,6 30,8 19,77 743,2 0,9 29,7 25,05 614,8 0,5 21,5 28,62 659 2 23,8 27,77 471,60 730 633,6 391,8 1,40 1,82 1,76 1,48 1908,9 867,2 2018,3 2330,1 311,8 6,66 1885,6 812,1 1960,4 2282,3 321,9 7,36 1906,9 722,8 1858,4 2144,6 286,2 7,26 1904 695,1 1608 1893,6 285,6 7,29 D/E Ratio Profit before gross interest and tax (£m) Gross interest payable (£m) Interest cover (times) Net cash flow from operating (£m) Interest received (£m) Interest paid (£m) Cash interest cover (times) Working capital Working capital ratio Retained earnings Profit before tax and interest Total liabilities Total assets Book value of equity Z-Score M&S (year end March) Long-term Debt (£m) Equity (£m) 2016 2.928,2 3.443,4 2015 2.885,7 3.198,8 2014 2.349,3 2.706,7 Gearing 46,0% 47,4% 46,5% D/E Ratio 85,0% 90,2% 86,8% Earnings Per Share (p) Dividend Per Share (p) 24,9 11,6 29,7 10,8 32,5 10,8 Dividend Cover (times) 2,15 2,75 3,01 584,1 1726,4 701,3 1697,7 694,5 1605,9 Interest cover (times) 0,338 0,413 0,432 Net cash flow from operating (£m) Interest received (£m) Interest paid (£m) Cash interest cover (times) 1212 6,8 113,5 10,74 1278 9,3 115,3 11,16 1129,6 3,4 132,7 8,54 -643,4 -656,6 -980,8 0,69 0,69 0,58 6927,5 488,8 5033 8476,4 3443,4 3,27 6670,5 600 4997,3 8196,1 3198,8 3,29 6325,1 694,5 5196,3 7903 2706,7 2,93 Profit before gross interest and tax (£m) Gross interest payable (£m) Working capital Working capital ratio Retained earnings Profit before tax and interest Total liabilities Total assets Book value of equity Z-Score 2013 2.238,3 2.519,5 47,0% 88,8% 28,3 10,8 2,62 753 2076,5 0,363 1140,2 5,9 135,2 8,48 -970,4 0,57 6150,3 753 5091,3 7610,7 2519,5 2,98

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