Sign In
Not register? Register Now!
Essay Available:
Pages:
7 pages/≈1925 words
Sources:
3 Sources
Style:
APA
Subject:
Accounting, Finance, SPSS
Type:
Essay
Language:
English (U.K.)
Document:
MS Word
Date:
Total cost:
$ 32.76
Topic:

Next PLC’s Financial Statements and its Pledges and Foreign Exchange

Essay Instructions:

The word count:

  1. The word limit for the case study/report is 1,800 words. However, a +10% range is permitted, i.e., a maximum 1,980 words. You will be penalized if your work is less than the minimum word-length and above the maximum word-length specified. There will be a penalty of a deduction of 10% of the mark for work exceeding the word limit by 10% or more.
  2. The word limit includes tables, figures, quotations and citations, but excludes the references list. Appendices should NOT be used, i.e. please include all relevant data in the main part of the case study/report.
  3. You should state the word count on the front page of your report. 

The Case Study/Report

You should write answers to each of (a), (b) and (c) as three parts of the main body of a single case study/report to the non-financial directors of Next plc, using the 2021/2022 Annual Report (see copy of full report in the Assessment folder on the module Blackboard site):

(a)     Analyse and discuss the 2021/2022 Next plc’s financial statements considering the company’s profitability, efficiency and liquidity. You must also compare the results with 2020/2021 (two ratios for each area) – (see copy of full annual report for year 2020/2021 in the Assessment folder on the module Blackboard site).                  (Marks: 35%)

(b)     In its 2021/2022 annual report (page 89), Next plc pledged:

“Our stakeholder relationships are key to our success and inform our decision making on Environmental, Social and Governance (ESG)matters, now a widely recognised term for what we have always valued – doing the right thing. We have made good progress on setting our near term and longer-term aspirations but we realise there is still more to do… In July 2021, our targets to reduce our Scope 1 and 2 carbon emissions were approved by the Science Based Target Initiative (SBTi). We also signed up to the EV100, committing to switching our car and van fleets to electric vehicles by 2030.” 

Now, and also considering Next plc’s 2020/2021 annual report, compare and discuss briefly the pledges Next plc made in respect of corporate social reporting. You need to illustrate your discussion with relevant examples.                                     (Marks: 25%)

(c)      Explain what you understand by the term ‘foreign exchange’ and ‘foreign exchange market’. As a British multinational clothing, footwear and home products retailer, discuss briefly how does foreign exchange market affect the international businesses of Next plc.

(Marks: 25%) 

Essay Sample Content Preview:

NEXT PLC’S FINANCIAL STATEMENTS AND ITS PLEDGES, AND FOREIGN EXCHANGE
Name of Student
Course
Name of Professor
University
Date
Total word count: 1901 words
Next Plc’s Financial Statements and its Pledges, and Foreign Exchange
Introduction
The commitments made by Next plc in its yearly reports demonstrate its commitment to corporate social reporting and carbon reductions. They actively publish their greenhouse gas emissions, energy usage, and environmental measures (Next PLC., 2022). Next plc must account for foreign currency transactions and manage currency risks in its financial reporting. The company must comply with accounting standards and regulations related to foreign exchange, including translating financial statements into its reporting currency (Amizan, 2022). Additionally, Next plc may actively monitor and manage foreign exchange risks through risk management practices and policies.
Word count: 92 words
Analysis and Discussion of the Next Plc’s 2021/2022 and 2020/2021 Financial Statements
Analysis and Discussion of the Next Plc’s 2021/2022 Profitability, Efficiency, and Liquidity
Profitability Ratios
Managers use profitability ratios to evaluate their companies' capabilities in generating incomes relative to their operating expenses, revenues, assets, and stockholders' equity. Jihadi (2021, pp. 425) assert that "a profitability ratio shows how well a company utilizes its assets to produce profit and value to shareholders." Profitability ratios include return on investment (ROI), gross profit, operating profit, and net profit ratios.
Gross profit ratio = (gross profit/net sales) X 100
= (£1,972,000,000/£4,625,900,000) X 100 = 42.63%.
Net profit ratio = (net profit/net sales) x 100
= (£677,500,000/£4,625,900,000) X 100 = 14.65%.
A firm with a gross profit of over 20% performs above average (Haralayya, 2021). Moreover, Haralayya posits that the ideal net profit ratio should be above 10%. Therefore, Next Plc was financially healthy in the year 2021/2022.
Efficiency Ratios
Administrators use efficiency ratios to measure how well their corporations utilize resources. According to Irman and Purwati (2020), the ratios measure firms’ effectiveness in using their resources to generate income and whether they can manage the assets efficiently. These ratios comprise receivables turnover, asset turnover, and inventory turnover ratios.
Asset turnover = net sales / average total assets
= £4,625,900,000/ [(£3,981,800,000 + £3,758,000,000)/2]
= £4,625,900,000/ £3,869,900,000 = 1.20:1
Inventory turnover ratio = cost of goods sold /average inventory
= £2,625,300,000/ [(£633,000,000 + £536,900,000)/2]
= £2,625,300,000/ £584,950,000 = 4.49:1
A retailer with an asset turnover ratio of 1:1 and above is good, and its inventory turnover ratio should be more than 2:1 (Haralayya, 2021). This performance shows that, in 2021/2022, Next Plc’s inventory vending rate was reasonable, and it efficiently managed the inventory and other assets to produce revenue.
Liquidity Ratios
Liquidity ratios include the current ratio, quick / acid test ratio...
Updated on
Get the Whole Paper!
Not exactly what you need?
Do you need a custom essay? Order right now:
Order

👀 Other Visitors are Viewing These APA Essay Samples:

HIRE A WRITER FROM $11.95 / PAGE
ORDER WITH 15% DISCOUNT!
Order Now