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Financial Management

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CONTENTS

1. Introduction
2. Financial management policies and structures
1. Capital investment decisions
1. Financial decisions
2. Dividend decisions
3. Investment decisions
3. Working capital management
4. Risk management
5. Strategic decisions
6. Social, ethical and environmental decisions
7. Evaluation of usefulness of Hermes principle
Appendices
1) Retail gearing
2) Share
3) Dividend paid
4) Business model
5) Profitability
6) Working capital cycle
7) Revenue
8) Bibliography

FROM: Itayi Mutete
TO: Neil
SUBJECT: An Investigation of Marks and Spencer and the Hermes principles
DATE: 11/04/08

1. Introduction
Marks & Spencer Plc (M&S) is an international retailer which is currently operating in 34 countries and has established over 600 UK stores as well as over 219 franchise stores. The company trades in clothing, home furnishings and foods. The company’s corporate objective is to increase long-term shareholder wealth.

The aim of the report is to evaluate the financial management policies and practices of Marks and Spencer plc (M&S). Hermes principles will be used to identify the main areas of the company’s financial management policies and practices.

The primary goal of companies is to ensure that they make appropriate decisions and use techniques which will aid them to maximize their value as well as reduce financial risks. The main areas of corporate financial management can be divided into short-term and long term decisions and techniques.

2. Financial management policies and practices
Marks and Spencer’s financial management policies and practices are decisions concerning capital investment decisions, working capital management, strategic decisions and social, ethical and environmental decisions.

1. Capital investment decisions
Companies often make long-term capital investment...