bily Analysis of Marks and Spencers annual report

You have recently attended a workshop aimed at improving your understanding of company Annual Reports using Marks and Spencer’s report as an example. During the workshop you looked at the following sections of Marks and Spencer’s annual report:  The Strategic Report which included a focus on ‘Creating Sustainable Value’,  The Directors Report which focuses on Governance, Accountability and Remuneration,  The Consolidated Financial Statements of: ‘Income’ (also sometimes referred to as the Statement of Profit and Loss) ‘Financial Position’ and ‘Cash-Flows’. You learned about how different ‘stakeholders’ may use the information contained in these reports and financial statements. You also learned about financial ratios and how these can be used to interpret and assess the performance of a business in terms of its profitability, liquidity, efficiency and return to investors. The timing of the workshop was very fortuitous. You are the Purchasing Manager for the business you work for. You are in the process of letting a contract for the supply of an important component used in your business’s production. You have been provided with the financial statements of Dorman Co. who are a strong contender in the contract letting process. The income statement and statement of financial position have been reproduced below. As well as reviewing the financial statements of Dorman Co. from a potential customer perspective, you are interested in how the company may be viewed by potential investors, lenders and suppliers. You have also collected the following information about other companies operating in the same sector as Dorman Co.: Current ratio 1.5 Quick ratio 1.0 Trade receivable days 60 days Inventory days 55 days Trade payable days 85 days