Marks & Spencer PLC

Marks & Spencer 12 13 14 15

Profitability
=Net income/ Total
ROA assets 6.73% 5.84% 6.40% 5.88%
=Net income/ Total
ROE equity 17.62% 17.65% 18.69% 15.06%
Net margin =Net income/ Sales 4.93% 4.44% 4.91% 4.67%
Performance
=Net income/ Total no.
Earnings Per Share of shares 34.9p 31.9p 32.2p 33.1p
= Dividend/ No. of
Dividend Per Share Shares 17.0p 17.0p 17.0p 17.2p
= Total debt/Total
Debt Ratio equity 68.05% 66.56% 59.78% 53.08%

The companys profitability depicted from the ROA and ROE, shows minor changes from the

previous years results. As ROA seems to fluctuate over the years so does ROE, however the ROE

has plummeted aggressively from the year 2014 to 2015. Net profit margin seemed to correlate

with the Return on Assets. As both increased and decreased with same magnitude. Since

profitability is the key factor for determining the performance of any company, they must not be

analyzed in isolation. As the evident from above, the companys profitability correlated with its

performance. Earnings per share correlates with Net margin as the increased profits bring in more

funds available for the shareholders. However, MKS seemed to have retained these profits and

gave out a consistent dividend that increased in 2015 regardless of deteriorated profitability. The

companys interest expenses were eating up its revenues, since it seems to have had taken up more
debt than capital. However, the company is shedding these expenses by deleveraging its capital

structure. Thus introducing free of cost funds for the generation of revenues.

Kingfisher PLC

Key Performance Indicators

Kingfisher 12 13 14 15
Profitability
=Net income/ Total
ROA assets 6.63% 5.70% 7.23% 5.90%
=Net income/ Total
ROE equity 11.16% 9.16% 11.24% 9.18%
Net margin =Net income/ Sales 5.90% 5.33% 6.38% 5.23%
Performance
=Net income/ Total no.
Earnings Per Share of shares 25.10p 22.30p 22.80p 20.90p
= Dividend/ No. of
Dividend Per Share Shares 7.62p 9.46p 9.49p 9.93p
= Total debt/Total
Debt Ratio equity 5.10% 2.97% 3.04% 2.87%

The companys profitability as represented by the ROA and ROE, shows variations in the

utilization of the assets and equity for earning profits. As ROA seems to vary over the years so

does ROE, nevertheless their change is relatively equal to each other over the course of 4 years

pointing to the change in net income as the causal factor. Net profit margin apparently correlates

with the ROA and ROE though changes in these indicators are more significant than Net margin.

In this case too, companys profitability correlated with its performance. Earnings per share show

a similar pattern with the Net margin as observed previously albeit the association is apparently

weak. Kingfisher retained a significant portion of these profits and maintained a steady dividend
per share that is increasing since 2012 regardless of dips in profitability. The company is operating

with a very deleveraged capital structure of which only 2.87% is financed by debt.

Kingfisher VS Marks & Spencer --- A snapshot

The above given chart evidently demonstrates the vast differences in the profitability and

performance of the both companies, while both belong to the same industry and are competitors.

As discussed before over the given period of time both of their performance reflects their

profitability, thus reflecting upon the association amid the two classes of indicators.

APPENDIX

Marks & Spencer

Income Statement ( m) 31-Mar-12 30-Mar-13 29-Mar-14 28-Mar-15

Continuing Operations
Sales Revenue 9934.3 10026.8 10309.7 10311.4
Operating Profit/(Loss) 746.5 753 694.5 701.3
Net Interest 135.6 125.3 121.1 99.8
Profit Before Tax 658 547.2 580.4 600
PROFIT FOR THE PERIOD 489.6 444.8 506 481.7
Attributable to:
Minority Interests 23.5 8.7 18.8 4.8
Equity Holders of Parent Company 513.1 453.5 524.8 486.5
Dividend per Share 17.00p 17.00p 17.00p 17.20p
Balance Sheet ( m) 31-Mar-12 30-Mar-13 29-Mar-14 28-Mar-15
Assets
Non-Current Assets
Property, Plant & Equipment 4443.9 4705.5 4874 4893.8
Intangible Assets 584.3 695 808.4 858.2
Investment Properties 15.9 15.8 15.7 15.6
Investments 17.4 18.5 15.7 15.2
Other Financial Assets 44.2 65.3 40.6 75.8
Other Non-Current Assets 691.6 826.9 764.4 866.9
5813.2 6342.8 6534.5 6741.1
Current Assets
Inventories 681.9 767.3 845.5 797.8
Trade & Other Receivables 254.6 248.1 309.5 321.8
Cash at Bank & in Hand 196.1 193.1 182.1 205.9
Current Asset Investments 327.5 59.4 31.4 129.5
Other Current Assets 0 0 0 0
1460.1 1267.9 1368.5 1455

Total Assets 7273.3 7610.7 7903 8196.1

Liabilities
Current Liabilities
Borrowings 327.7 558.7 448.7 279.4
Other Current Liabilities 1677.7 1679.6 1900.6 1832.2
2005.4 -2238.3 2349.3 2111.6

Non-Current Liabilities
Borrowings 1948.1 1727.3 1655.1 1745.9
Provisions 219.7 256.6 274 347.4
Other Non-Current Liabilities 321.3 869 917.9 792.4
2489.1 2852.9 2847 2885.7

Total Liabilities 4494.5 5091.2 5196.3 4997.3

Capital & Reserves

Share Capital 401.4 403.5 408.1 412
Share Premium Account 294.3 315.1 355.5 392.4
Other Reserves -3896.9 -4330.4 -4381.4 -4275.3
Retained Earnings 5991.4 6150.3 6325.1 6670.5
Shareholders Funds 2790.2 2538.5 2707.3 3199.6
Minority Interests/Other Equity -11.4 -19 -0.6 -0.8
Total Equity 2778.8 2519.5 2706.7 3198.8
Kingfisher PLC

Income Statement ( m) 28-Jan-12 02-Feb-13 01-Feb-14 31-Jan-15

Revenue 10831 10573 11125 10966
Operating Profit/(Loss) 807 692 736 652
Net Interest 29 18 10 13
Profit Before Tax 797 691 759 644
PROFIT FOR THE PERIOD 639 564 710 573
Attributable to:
Minority Interests 1 0 0 0
Equity Holders of Parent Company 640 564 710 573
Dividend per Share 7.62p 9.46p 9.49p 9.93p

Balance Sheet ( m) 28-Jan-12 02-Feb-13 01-Feb-14 31-Jan-15

Assets
Non-Current Assets
Property, Plant & Equipment 3612 3682 3575 3173
Intangible Assets 2520 2565 2639 2672
Investment Properties 55 66 50 30
Investments 271 289 32 28
Other Financial Assets 66 55 40 52
Other Non-Current Assets 65 106 27 211
6644 6829 6413 6196
Current Assets
Inventories 1844 2083 2054 2021
Trade & Other Receivables 532 554 605 543
Cash at Bank & in Hand 587 398 535 609
Current Asset Investments 26 33 5 70
Other Current Assets 0 0 208 274
2989 3068 3407 3517

Total Assets 9633 9897 9820 9713

Liabilities
Current Liabilities
Borrowings 367 99 94 105
Other Current Liabilities 2683 2771 2696 2628
3050 2870 2790 2733

Non-Current Liabilities
Borrowings 375 332 230 232
Provisions 312 341 297 363
Other Non-Current Liabilities 169 198 186 146
856 871 713 741
Total Liabilities 3906 3741 3503 3474

Capital & Reserves

Share Capital 372 373 373 369
Share Premium Account 2199 2204 2209 2214
Other Reserves 279 465 231 -15
Retained Earnings 2869 3106 3495 3661
Shareholders Funds 5719 6148 6308 6229

Minority Interests/Other Equity 8 8 9 10

Total Equity 5727 6156 6317 6239