Analysis of Marks and Spencer Group PLC

Analysis of Marks and Spencer Group PLC The principal activities of the company are retailing clothing, food and home products. Marks Spencer operates in the secondary and tertiary sectors. It operates in the secondary sector as it manufactures finished goods and it is associated with textile production. It operates majorly in the tertiary sector as it provides goods and services to the population and to other businesses. A group of companies is one which consists of two or more companies between which there is a parent/subsidiary relationship and they are usually under the same ownership and maybe management. The group balance sheet will differ from that of the company since it includes the total of each individual company balance sheet of all the companies together us one compared to the company balance sheet which includes all the transactions of the company. i) total assets  £7258.1 millions total liabilities  £5157.5 millions net assets  £2100.6 millions ii) The difference between the total assets and the total liabilities is the net assets which can be also called as the groups capital. When you add the fixed assets with the current assets and then subtract the current liabilities from the Balance sheet, the total that you write down is called Net Assets. i) profit after tax (52 weeks ended 28 March 2009)  £506.8 millions (52 weeks ended 29 March 2008)  £821.0 millions Net profit margin 2009 5.6% 2008 9.1% ii) The net profit margin has significantly fell because of the exceptional costs incurred to the firm during the current accounting period due to the economic recession that affected considerably the markets MS operates in. The firm had to spend  £135.9 millions on exceptional costs, due to a change in its strategies, compared to 2008 when it had no exceptional costs. i) MS uses straight line method which is a method that allocates the amount to be depreciated evenly over the useful life of the asset. Some of MSs uses of depreciation are the following: Freehold land not depreciated Freehold and leasehold buildings with a remaining lease term over 50 years depreciated to their residual value over their estimated remaining economic lives Leasehold buildings with a remaining lease term of less than 50 years over the remaining period of the lease Fixtures, fittings and equipment 3 to 25 years according to the estimated life of the asset. ii) The straight-line method of depreciation is a method that allocates the amount to be depreciated evenly over the useful life of the asset. For example for something with a total cost of  £500 and an estimated useful life of 5 years, using the straight-line method, the annual depreciation charge will be  £100. On the other hand the reducing balance method is the method in which the depreciation is expressed as a fixed percentage on the reducing balance of an asset. In simpler words the amount of depreciation gets reduced every year. For an asset of a total cost of  £500, using the reducing balance method by 20%,it means that the value of the asset will decrease 20% of its value each year. After year 1, the net book value will be  £400 and then for the next year the value will drop to  £320 and so on. iii) Property, Plant and Equipment as at 29/3/2009  £4.834.0 millions (a)  £725.1 millions straight line depreciation (b)  £1450.2 millions reducing balance depreciation iv) By using the straight-line method of depreciation the reported profit of the group will be reduced by about  £400 million as depreciation is placed under the expenses category in the income statement and it will also be deducted from the assets current value in the balance sheet. On the other hand, by using the 30% reducing balance method, profit will decrease even more and the assets value on the balance sheet will be reduced even more. The more depreciation they charge the less net profit they get for the current period. i)  £285.2 millions ii)1371.9/365=3.76 millions/day 285.2/3.76à ¢Ã¢â‚¬ °Ã‹â€ 76 days worth of sales. iii) The ratio of trade debtors and customers to sales is about 20%. This seems quite high but for such a large company like Marks and Spencer, which generates so much cash from operations (sales), is not much of a concern. However it would be better for the company to try and minimize this ratio in the next years. Stewardship accounting is the provision of information by managers to owners for the purpose of avoiding a potential conflict between managers and owners. Directors act as agents of the shareholders, or as stewards on their behalf. The stewardship function requires directors to act in the best interests of the company at all times. Where shareholders are remote from the management of their company there is potential for the directors to take action that benefits themselves rather than benefiting the shareholders. This is one of the potential problems of the stewardship relationship. If directors wish to manipulate financial information they are well placed to do so. Shareholders can be assured that the annual financial information they receive has not been distorted by requiring an audit by an independent auditor. Until recently all companies were required to have an audit of their annual financial statements. i) current Ratio= Current Assets/ Current Liabilities = 1389.8/2306.9= 0.60:1 Quick Ratio= (Current Assets- Stock and prepayments)/ Current liabilities = (1389.8-536.0)/2306.9=0.37:1 ii) The current ratio and the quick ratio are both liquidity ratios. They are commonly used to assess the liquidity of a business. As a general rule, a current ratio of 1.5 or greater can meet near-term operating needs sufficiently. A higher current ratio can suggest that a company is hoarding assets instead of using them to grow the business not the worst thing in the world, but its something that could affect long-term returns. The Quick Ratio is a much more exacting measure than the Current Ratio. By excluding inventories, it concentrates on the really liquid assets, with value that is fairly certain. An acid-test of 1:1 is considered satisfactory unless the majority of your quick assets are in accounts receivable, and the pattern of accounts receivable collection lags behind the schedule for paying current liabilities. i)There are many factors that determine the share prices but only some factors can directly influence them. One of these factors is demand and supply. The price is directly affected by the trend of stock market trading. When more people are buying a certain stock, the price increases and when more people are selling the stock, the price falls. Secondly news is a huge factor that influences the shares price. Positive news about a company can increase buying interest in the market while negative news can decrease it. It is the overall performance of the company that matters more than news. The earning per share is the profit that the company made on the last quarter and it is also a huge factor that can affect the share prices. Every public company needs to publish a quarterly report that states the earning per share. By this way they influence the buying tendency in the market resulting in the increase in the price of that particular share. So, one needs to watch on the quarterly reports of the companies and before buying any shares. ii) MarksSpencer Share prices My evaluation of Marks and Spencers performance thus far for this current accounting period is positive. First of all the company uses a long term plan and any short term decreases in revenues or profits is acceptable. The profit margin ratio has increased in 2009 from 13.43% to 23.45% so despite the recession MS managed to increase its profit margin. On the other hand the earning per share has decreased for 2009 from  £0.49 to  £0.32 per share. Though the profit margin has increased the earning per share has decreased and that is not positive for us investors. The firm might have a long term plan that is indeed promising but thus far this season we investors are concerned about the effect of the recession on the firm and more specifically on our earnings per share.

Computer Generated Evidence in Court :: Computers Technology Courtroom Essays

Computer Generated Evidence in Court Introduction We are living in what is usually described as an 'information society' and as the business community makes ever greater use of computers the courts are going to find that increasingly the disputes before them turn on evidence which has at some stage passed through or been processed by a computer. In order to keep in step with this practice it is vital that the courts are able to take account of such evidence. As the Criminal Law Revision Committee recognised, 'the increasing use of computers by the Post Office, local authorities, banks and business firms to store information will make it more difficult to prove certain matters such as cheque card frauds, unless it is possible for this to be done from computers' (CLRC 1972, para 259). Admissibility The law of evidence is concerned with the means of proving the facts which are in issue and this necessarily involves the adduction of evidence which is then presented to the court. The law admits evidence only if it complies with the rules governing admissibility. Computer output is only admissible in evidence where special conditions are satisfied. These conditions are set out in detail in section 69 of the Police and Criminal Evidence Act (PACE) 1984 (see further Nyssens 1993, Reed 1993 and Tapper 1993). In general the principles of admissibility are that the evidence must be relevant to the proof of a fact in issue, to the credibility of a witness or to the reliability of other evidence, and the evidence must not be inadmissible by virtue of some particular rule of law (Keane 1994, pp 15-20; Tapper 1990, pp 51- 61). Real evidence usually takes the form of some material object (including computer output) produced for inspection in order that the court may draw an inference from its own observation as to the existence, condition or value of the object in question. Although real evidence may be extremely valuable as a means of proof, little if any weight attaches to it unless accompanied by testimony which identifies the object in question and explains its connection with, or significance in relation to, the facts in issue or relevant to the issue. This is illustrated in the case of R v Wood (1982) 76 Cr App R 23 where the appellant was convicted of handling stolen metals. In order to prove that metal found in his possession and metal retained from the stolen consignment had the same chemical composition cross-checking was undertaken and the figures produced were subjected to a laborious mathematical process in order that the percentage

Ethical Marketing Essay

Ethical marketing refers to the marketing of products and services that adhere to principles of honesty and social responsibility. Generally the projection of beneficial qualities of products and services are used in marketing to appeal to the needs of and wants of customers. (Pride and Ferrell, 2000) The needs of customers however may represent an adherence to certain ethical or social values that go beyond a mere biological need. While ethical marketing does not loose sight of the core value of appealing to the needs of customers, it projects social goods and values like human rights, animal rights, fair trade for developing countries, child labor and the environment as central to its strategy to win customers. The Body Shop for instance is noted for its insistence on not using animals for testing its cosmetic products. (Dennis, Neck, & Goldsby,1998) Thus though legally the use of animals for cosmetic testing is not prohibited, Body Shop seeks to appeal to the conscience of customers and by so doing achieve a customer loyalty base for its products. Another prominent example of the use of ethical marketing is the fair trade logo used to market products that have been sourced from developing countries. (Tiu, Wright, & Heaton, 2006) The issue of fair trade has become a pertinent ethical issue in international trade, thus marketing products with the fair trade logo serves to show the producer’s conscientiousness about helping poor producers in developing countries. Consumers who are eager to help poor farmers in developing countries are even willing to pay a higher price for a product with the fair trade logo. Issues of protection of the environment also play very important roles in ethical marketing. Companies who contribute to forestation projects in places like the Amazon are eager to mention their contribution to such projects when marketing their products.

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