Financial Resourses Essay

Submitted By Najeeb2608044
Words: 5067
Pages: 21

Contents

Introduction
Michael Mark opened his first bazaar in Leeds in 1884.Michael went into partnership with Tom Spencer in 1894.They started with very limited products and became one of the dominated company today.
They are UK one of the chief dealers. More than 21 million people visit their stores every week. They sell good class of clothing, home merchandise and fresh food which are sourced from 2000 suppliers globally. 78000 people are employed by Mark & Spencer in UK and all over the world.
Plan: 2010-2013
Their main concern , 2010-2013, is to develop their skills in UK.It will be through the development of M & S brand, recovering their stores, focus on their industries at home, clothes and food. Their goal is 95% of the residents must be in 30 minutes drive from the store Marks & Spencer's entire line by 2015.
Share price
320.30p -3.20 Half year results2011/12
Revenue £4.7bn+2.4%
PBT £315.2m-9.6%
EPS 15.6p-6.0%
Dividend 6.2p level
Net debt £1.97bn
UK sales performance TY £m LY £m Var %
Clothing 1,782 1,783 -0.1
Home 185 200 -7.8

General Merchandise 1,966 1,983 -0.8
LFL -1.3
Food 2,208 2,125 3.9
LFL 2.1

Total 4,174 4,108 1.6
LFL 0.5

(Mark & Spencer,2011)
Sources Of Finance:
Long Term:

Shares Issue: The company which sells the stock in public to make capital and the stock which is given as compensation package to insiders is referred to Issued shares. Shares that have been retired are not included in this figure, unlike shares that are held as reserve stock. Component part of the total amount of authorized shares of a corporation or the amount of issued shares can be the entire.
The sum shouldn’t be paid back - it is a enduring source of large amounts of capital. Being capable to increase dividends finance, needs to be paid if the business makes a turnover.
Ordinary share Issue: At the time company’s profit, the dividends can be paid. For issuing shares collateral is not required. It helps in reducing gearing ratio. Once shares are issued may not be redeemed, and therefore unable to change the capital structure. It has a issue cost. Possible acquisition opportunities if investors buy more than 50% of the total issued shares.
Implications:
In the case of bankruptcy, the owner of the shares of ordinary shares is to receive the payment of any, at the end of the line. It will be paid to preferred shareholders before ordinary shareholder and the owner of the share holders.
Preference Shares:
Preferred shareholders are not paid, if the company losses. There are other benefits as well as the issuance of common stock of such - no need to repay the capital, large amount of unsecured funds to raise the necessary funding sources cannot be permanent.
Implications:
If a company is in losses, unable to pay the one-year dividend for the year of the dividend will be paid next year, with next year's dividend. The preference shares can be purchased by the company at a later date. Under normal circumstances, the redemption date is usually agreed. http://www.scribd.com/doc/27126810/Sources-of-Finance Debentures: Collateral is debt tool that is not protected by physical asset. Status of the issuer and debentures are backed simply by the general credit merit. Both corporations and governments often issue this kind of bond in order to safe capital. Debentures are documented in an agreement, similar to other types of bonds. A debenture is always in indicted descriptor.
Bonds are a kind of debt assets. The worth of the debentures with interest rate and the repayment time is presented in the section of shareholders' equity and liabilities in the statement of financial position. Interest paid on debt is less by the profit before tax is paid.

Implications:
Tax incentives – interests of debentures are treated as expenses and are charged against profits in the income statement. At the…