Work on the published financial statements of Marks and Spencer plc for the last three years from 2020 to 2022.
You are required to write a report to evaluate the performance, liquidity and financial structure of the three years from 2020 to 2022.
You should use the accounting ratios shown below and any other information relevant to Marks and Spencer plc. Information can be accessed from the annual report and accounts and any other source of evidence that you believe helps to explain the company’s performance and position.
You should also highlight any limitations in the use of accounting ratios that you found in your analysis and evaluation of the company over the three-year period. This may include reference to the movements in the company’s share price.
YEAR END 02/04/2022 27/03/2021 28/03/2020 30/03/2019
Profitability ratios
∟ Return on Shareholders Funds (%) 8.39 -6.33 1.06 2.07
∟ Return on Capital Employed (%) 4.59 -3.32 0.59 1.44
∟ Return on Total Assets (%) 3.62 -2.58 0.50 1.11
∟ Profit margin (%) 3.72 -2.91 0.59 1.05
∟ Gross margin (%) 34.49 31.80 35.28
Operational ratios
∟ Net Assets Turnover (x) 1.24 1.14 1.01 1.37
∟ Fixed Assets Turnover (x) 1.21 1.04 1.24 1.82
∟ Interest Cover (x) 2.89 -0.16 1.26 1.97
∟ Debtor Collection (days) 3.29 4.23 5.26 4.17
∟ Creditors Payment (days) 24.57 42.17 33.81 32.05
Structure ratios
∟ Current ratio (x) 0.92 0.68 2.03 1.83
∟ Liquidity ratio (x) 0.62 0.42 1.73 1.51
∟ Asset Cover (x) 3.04 2.83 3.10 211.11
∟ Gearing (%) 84.33 102.77 83.36 53.44
Per employee ratios
∟ Profit per employee (unit) 6,033 -3,820 771 1,357
∟ Turnover per employee (unit) 162,256 131,084 130,485 129,559
∟ Salaries/Turnover 13.67 15.70 14.38 14.56
∟ Average Remuneration per employee (unit) 22,173 20,584 18,767 18,865
