Professional Documents
Culture Documents
1
Aim and Coverage
COVERAGE :
Finance Director’s review and his critical evaluation on the
operating and financial conditions.
2
Debenhams Plc is one of the
United Kingdom's longest
continuously operating
clothing and goods retailers.
3
The year in Brief
4
The year in brief…Financial Outlook
From the Financial point of view, the Net Cash generated from
operating activities has been £191.4m, a reduction of 16% as
compared to last year.
No change in the Gross Profit Ratio is seen, but the Net Profit
Ratio has decreased by 1% because of increase in administration
expenses.
5
Cash Flow Analysis
Taxation
Findings - Profits before taxes were low [£6.3m lower than last
year]
Taxation has reduced from £79m to £77.1m, there is a change of
£1.9m
Conclusion
If the tax rate had not reduced, the company would’ve ended up
paying more tax as compared to what they’ve paid this year,
resulting in more outflows of cash.
7
Analysis of Cash Flows from
Operating Activities
Depreciation
Interest Income
Cash from interest received – £4.2 to £4.8, due to increase in the
interest rate on bank deposits
Interest Expense
Our interest expense has increased by £4.2m as our bank loan
and overdraft have increased from £104.8m to £144.5m
Bank overdraft has increased this year because Debenhams has
availed more revolving credit facilities.
WORKING CAPTIAL
Also, sales have increased this year due to increased demand and
market share, plus opening of new stores.
Conclusion:
This means that they are efficient in balancing their non-current
assets.
There was a 30% increase in investment this year.
11
Analysis of Cash Flows from
Financing Activities
Conclusion:
12
Ratio Analysis for Debenhams PLC.
Chart Title
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3
2
1
19
Final Conclusion
Even though the Chairman’s Report states that “Gross margin was
maintained at the same level as last year”, which is shown to be
favorable is actually not.
The Net Profit Margin has taken a negative form.
Even though the Net Debt position has improved by £22.5m, they
still have an outstanding term loan repayment of £805m which is
supposed to be repaid by the next 3years which is very unlikely
looking at the current market and macroeconomic conditions.