Fundamentals of Finance Essay Example | Topics and Well Written Essays - 2000 words - 1

Fundamentals of Finance - Essay Example Therefore, it can be said that M&S possesses a sound fundamental financial position. In order to analyse the efficiency of a company, it is necessary to quantify its financial performance. Not just the investors, but other stakeholders like suppliers, credit providers and banks also consider the financial performance of the company as a parameter of its efficiency. Such analysis is often done in two stages. Initially, the performance of the company is analysed for the past few years (atleast five or more years). Historical data reflects the past trend and fundamentals of the company. However, one should not rely only on historical performance; rather the performance of the company in the last financial year should also be taken into consideration. Tools like ratio analysis should be used to make the process more transparent and holistic. Moreover, the performance of the company should be compared against the industry to arrive at a more authentic conclusion. In the given project, financial performance of Marks and Spencer will be analysed by taking into consideration its last five years performance. Later on, essential ratios will be analysed and compared against the industry benchmark to have a more comprehensive understanding. Marks and Spencer is one of the leading retailers in UK. Data published by the company reveals that in a single week more than 21 million customers visit its stores. The company is engaged in selling high quality clothes and home products along with quality food. The supplier base of the company comprises more than 2,000 suppliers from different parts of the world. Approximately 76, 000 people are employed by UK and other stores located in 41 overseas territories. The company was founded by Michael Marks and Thomas Spencer in the year 1884 for selling specifically British products. However, with time, the company had to break this policy to gain competitive edge in