An Interpretation of the ratios for Marks and Spencers and the House of Fraser Findings ======== This section of the report will be composed of an interpretation of the ratios for both companies. All ratios that form the ratio analysis will be explained, and any trends from within ratios will be highlighted. OVERALL PERFORMANCE Return on Capital Employed: Net profit before tax and interest x100 = % Capital employed The Return on Capital Employed ratio (R.O.C.E) is a hugely significant ratio, and a great deal can be taken from this ratio. The ratio relates to the profit earned in relation to the long-term capital invested in the business. The term 'capital employed' in this equation means the owners' capital plus any long term liabilities (for example long-term loans). This ratio shows the % return on capital invested in the company. A business will aim to have this ratio as high percentage as possible. If the percentage return on capital invested is less than that offered elsewhere, then it may be wise to close the business and invest elsewhere. The ratio analysis shows that Marks and Spencer saw a slight drop on their R.O.C.E from 1999 to 2000, however, they managed to increase the R.O.C.E the following year. The next year, 2002 shows the most significant changes. The R.O.C.E increased from 9.61% in 2001, to 20.89% in 2002. This is almost a 120% increase on R.O.C.E. The House of Fraser had a slightly better R.O.C.E than Marks and Spencer in 2000, however, the following year they experienced a drop of around 1.5%. The result for 2002 shows that The House of Fraser managed to almost double their R.O.C.E from 8.6% in 2001 to 15.91% in 2002. Although this was a healthy increase, The House of Fraser currently have a R.O.C.E th... ... middle of paper ... ...tly. The company needs to be more flexible with the volume and style of clothing they stock. People are much more fashion conscious than they used to be, it is essential for the credibility of a company that they are consistently at the height of fashion. The results for the debtor's collection period for Marks and Spencer are very worrying, especially when compared to The House of Fraser. Marks and Spencer need to dramatically reduce the collection period in order to avoid any problems in the future. Marks and Spencer currently offer their customers the option of having a store card. Although in theory, this is a good idea, especially form a marketing perspective; it can cause many problems in the long run. Customers can leave payment for long periods of time. This leads to Marks and Spencer not being paid for stock they no longer own, and should have been paid for.
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Efficiency has been highlighted as a key financial objective for each company – as it is inherent in optimising profit from any business and helping sustain core business – which is the primary objective of both groups. It is also a good indicator of healthy cash flow management – a specific Sainsbury’s objective.
Clothing manufacturer American Apparel has a long notorious history for pushing the limits with their 'risqué ad campaigns. Their advertisements has been condemned sexual exploiting women and essentially using pornography to sell its clothes. American Apparel has become one the most pornographic advertisers of all time.
The retail stores of JC Penney and Sears have face headlines of “Which is Worst: JCP or Sears?” The end maybe near for both companies (Andersen2014). The customers look at the employees like their idiots. The public believes that poor management is the reason for the down fall of these companies. Eddie Lambert and Ron Johnson are the CEO’s of being credited to running these companies with wrong management strategies (Andersen 2014). Ron Johnson who is now the former CEO was highly qualified with his retail instincts tried to run the store like a retail boutique. He never took the time to consult a survey on what the consumer’s thought were and after two years he jeopardized the company (Andersen 2014). Whereas the CEO Eddie Lambert of Sears
A firm may produce a product in a particular industry while another industry produces something similar with a variety of characteristics but not exactly alike. The consumer may favor one substitute product over the other one from another industry. The firm could be affected by competitors in the same industry that don’t offer substitute products. The substitute originates on the outside of an industry in the firm. The substitute can put a limitation on the price of the substitute in the firm although it is made outside the industry. The firms that are prosperous will be have some or no substitutes. For example, the Sam’s Club have many different products sold in their store but they carry their store name brand. Publix sells many different
The following analysis will help to determine whether or not Dixons Retail plc’s performance within the industry is good. It will also show if the company’s financial position is stable in comparison to other business within the same market. The analysis is broken down in several bullet points containing information about relevant financial ratios that are useful to understand the business performance.
Did you know that many penurious children and families suffer from many things that America takes for granted? “The Real Cost of Cheap Fashion,” by Laura Anastasia and “The Real Cost of Your Phone,” by Rebecca Zissou show many readers how terribly many people are affected by this, and what a hinderance it is on their lives, but also what can be done to fix it.
When computing financial relationships, a good indication of the company's financial strengths and weaknesses becomes clear. Thus they however facilitate year-on-year comparison to develop insights into trends. Examining these accountingratios ratios over time provides some insight as to how effectively the business is being operated.
The analytical formats used in response to question number 3 are threefold; 1) trend analysis, 2) common size analysis and 3) percentage change analysis. The rationale for this three-fold approach is that all other ratio analysis is derived from these three. The utilization of trend analysis aids in giving clues as to the financial status of the company is likely to improve or deteriorate. Likewise, the common size analysis relates to the fact that all income statement items are divided by
The two contrasting businesses described in this report will be, Marks&Spencers Public Limited Company (PLC) and Oxfam. Marks & Spencer 's was a start up retailing company founded in 1884. They originally started as a small stall in Kirkgate Market, Leeds however over the years they have successfully expanded as a well known brand and international retailer. Their main purpose is to make as much profit as possible while satisfying their customers with outstanding products. Oxfam was a start up charitable company founded in 1942. They originally started during the Second World War in aim to ensure the supply of relief to civilians and have also successfully expanded as a well known brand and Global Business. Their main purpose is to provide appropriate support and help to those which are in need of their service.
In 1897 Sebastian Spering Kresge opened five-dime stores in Memphis and Detroit with John McCrorey as his partner. Two years later the partnership broke up and each person kept one city. Mr. Kresge kept the Detroit store and began expanding from there onward. In 1912 the company became incorporated as S.S. Kresge and was the 2nd largest dime store chain with 85 stores and annual sales of more than $10 million. In 1918 S.S Kresge was listed on the New York Stock Exchange. Throughout the decades, Kresge rapidly expanded eventually opening the first Kmart store in 1962 in Garden City, Michigan. By 1966 there were more 160 Kmart stores in the US and Canada. In 1968 Kmart began airing TV commercials. In the 1970s, Kmart continued to expand opening 270 stores in 1976 alone. In 1977, S.S. Kresge changed its name to Kmart because 95% of its sales were coming from that branch. In the 1980s and early 90s, Kmart diversified by adding other retailers such as Walden Book Company which was the number one bookstore chain in the US. The Sports Authority in 1990, 90% stake in OfficeMax and the Borders bookstore in 1992. Also in 1990 Kmart opened its first Kmart Super Center in Medina, Ohio. Whatever was left of the Kresge locations in the US was sold to S.S. Kresge's former partner's store chain McCrory's. Between 1994 and 1995 earnings began to fall for Kmart causing them to sell off their other operations, OfficeMax, The Sports Authority, PACE, Borders and its US automotive service Centers. Also in that time period, more than 200 US stores were closed. Fast forwarding to the future, Kmart launched www.bluelight.com which is now known as www.kmart.com in 1999. In 2002 Kmart filed for Chapter 11 Bankruptcy which was the biggest retail bankruptcy i...
In the case, Marks & Spencer and Zara, it discusses two business process designs that each company took. You first had Marks & Spencer, who had a more traditional approach. Their chain started of with the buying team, design, developers, merchandisers, technologist, suppliers, logistics, and lastly the store. Zara, however, comes up with a new innovative design. With this new design in effect the delivery of new collections only has a lead-time of 5 days. They were able to cut down this time due to the fact that products where mainly produced on Galicia.
Wal-Mart and Target are two similar global corporations. If one asks each of these store’s customers why they shop there, somewhere in their answer one will find them saying that they can find everything. The difference between these two corporations is their mission, marketing, and quality. Each of these stores are looking to offer a different experience despite selling similar goods. So, when profits are not changing in the United States, they’ve opted for an expansion into other countries. They have opened stores and provided services outside of the United States.
Hennes & Mauritz (H&M) is a Swedish clothing retail company. The company was founded by Erling Pesson in 1947. The first H&M store was opened in Vaesteras, Sweden in 1947. The mission of H&M is to offer fashion and quality at the best price where “quality includes ensuring that products are manufactured in a way that is environmentally and socially sustainable” (H&M, vision & policy, n.d., para. 1). This essay is to highlight the current market analysis, pricing strategy, retail strategy, and competitive advantage analysis of the company.
This report analyzes the cosmetics retail industry in Hong Kong. There are many large-scale specialty cosmetics chains that are well developed in this market, such as Sasa, Bonjour, Colourmix, Aster and Angel, which are taking the lead. They mainly offer a wide range of international branded products and private label products to cater for customers’ special beauty needs, like make-up, fragrance, skincare items. With many dominant firms and a slowing growth in demand, the industry structure is being identified as mature.
Dunnes Stores is an indigenous, family owned Irish Company. The Company is a retailer in both the food and textile market who work around the principle of providing competitive prices, high quality products and a vast variety of choices. The company’s motto of “Better Value” looks to draw in all these principles together.