The name of the chosen company is Marks and Spencer Group p. l. c. And is the annual report for 2002. The companies registered office is Marks and Spencer p. l. c 47-67 Baker Street London W1U-8EP. Marks and Spencer p. l. c 47-67 Baker Street London W1U-8EP. The company is a retail store, which mainly operates in U. K, it is hugely recognized within its market. They offer a wide variety of products to their customers including clothing, specialty, home ware and financial services.
Marks and Spencer has two entries in the companies balance sheet, one is the groups transaction this is for all the companies within Marks and Spencer. This includes Kings super markets, which are owned by Marks and Spencer's abroad, they may also own stakes in smaller companies which run under a different name in the U. K but are owned by Marks and Spencer therefore would come under the groups profit. Where the company profits ware those which are strictly related to mainland U. K and consist of its main operations of retail and finance rather than smaller business it may own in the U.
K or abroad. The difference in the balance sheet represent, at the end of a year the total amount of cash a business has tied up in the business which some of can be liquidated. After taking away all the money that the business owes to either banks or creditors. The group balance sheet shows this is the amount of total current assets the business has and may use if it is needed; it also shows shareholders that the business has some money to use if needed. There are many possible reasons that the net profit margin has changed between the two years.
These factors are that the previous year the company mad losses on sales of their shops which they sold, these were abroad and some on main land. Closing these incurred many expenses including payoffs and they could not sell land at a profit but rather a loss. Operations were up 3. 8%, also operating profit before exceptional charges is higher in 2002 compared to 2001. The company uses the two formats of straight line method and the reducing balance method of depreciation, both formats are used for different types of tangible fixed assets and both have their advantages.
Land is not depreciated; leases and buildings are depreciated to their estimated residual value. The difference between straight-line method of depreciation and the reducing balance method; the reducing balance method depreciates items rapidly in the early years of its life, most commonly used on cars and machinery and is calculated using the net book value. The straight-line method is used when depreciation is needed to be charge the same amount each year, to its estimated useful lifeline. Both methods have its advantages where straight line is easy to calculate and many firms tend to use it.
Where reducing balance method is commonly used when depreciating buildings and land. This takes into account the net book value of the asset and then calculates a percentage of that. The group owed by trader debtors and customers, within one year and after more than one year. Debtors in total receivable within one year are 952. 1m and receivable after one year is 1667. 2m. Breaking this down trade debtors are 21. 9m and money owed to customers is 579. 9m. Also amounts owed to the business by customers after one year is 1603. 1m.