The financial statements of M&S (GBR) are presented in Appendix A. The company’s complete annual report, including the notes to the financial statements, is available online.

Instructions Refer to M&S’s financial statements and the accompanying notes to answer the following questions.

(a) What alternative formats could M&S have adopted for its statement of financial position? Which format did it adopt?

(b) In what classifications are M&S’s investments reported? What valuation basis does M&S use to report its investments? How much working capital did M&S have on 30 March 2013? On 31 March 2012?

(c) What were M&S’s cash flows from its operating, investing, and financing activities for 2013? What were its trends in net cash provided by operating activities over the period 2012 to 2013? Explain why the change in accounts payable and in accrued and other liabilities is added to net income to arrive at net cash provided by operating activities.

(d) Compute M&S’s: (1) current cash debt coverage, (2) cash debt coverage, and (3) free cash flow for 2013. What do these ratios indicate about M&S’s financial conditions?

Data From Appendix A

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APPENDIX A Specimen Financial Statements: Marks and Spencer Group plc Financial statements Consolidated income statement Revenue Operating profit Finance income Finance costs Profit before tax Income tax expense Profit for the year Attributable to: Equity shareholders of the Company Non-controlling interests Basic earnings per share Diluted earnings per share 52 weeks ended 30 March 2013 52 weeks ended 31 March 2012 Notes 2,3 m 10,026.8 m 9,934.3 2,3 756.0 746.5 26.5 (218.2) 48.3 (136.8) 4 564.3 658.0 (106.3) (168.4) 458.0 489.6 ico ico 8 466.7 513.1" (8.7) (23.5) 458.0 489.6 29.2p 32.5p 29.0p 32.2p