Financial Reporting Problem

Marks and Spencer plc (M&S)

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

a. What type of income statement format does M&S use? Indicate why this format might

be used to present income statement information.

b. What are M&S’s primary revenue sources?

c. Compute M&S’s gross profit for each of the years 2018 and 2019. Explain why gross

profit increased in 2019.

d. Why does M&S make a distinction between operating and non-operating profit?

e. Does M&S report any non-IFRS measures? Explain.   

  

86 MARKS AND SPENCER GROUP PLC FINANCIAL STATEMENTS CONSOLIDATED INCOME STATEMENT Revenue Notes 2,3 53 weeks ended 2 April 2016 Underlying Non-underlying m 10,555.4 Em 52 weeks ended 28 March 2015 Total Em Underlying Em 10,555.4 10,311.4 Non-underlying Total Em Em 10,311.4 ........................... Operating profit ................. 2,3,5 ............ Finance income Finance costs Profit before tax Income tax expense Profit for the year Attributable to: 784.9 (200.8) 584.1 762.5 (61.2) 701.3 9 21.1 21.1 15.5 15.5 ................................. 6 (116.4) (116.4) (116.8) (116.8) ................................ 4,5 689.6 (200.8) 488.8 661.2 (61.2) 600.0 7 (118.8) 34.4 (84.4) (124.8) 6.5 (118.3) 570.8 (166.4) 404.4 536.4 (54.7) 481.7 Owners of the parent Non-controlling interests .......... 573.3 (166.4) 406.9 541.2 (54.7) 486.5 (2.5) (2.5) (4.8) (4.8) 570.8 (166.4) 404.4 536.4 (54.7) 481.7 Basic earnings per share 8 35.0p W..... Diluted earnings per share 8 34.9p 24.9p 33.1p 24.8p 32.9p 29.7p 29.5p .................. CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ..................... 53 weeks ended 2 April 2016 Notes Em 404.4 52 weeks ended 28 March 2015 Em Profit for the year Other comprehensive Income: Items that will not be reclassified to profit or loss Remeasurements of retirement benefit schemes Tax charge on items that will not be reclassified ................. Items that will be reclassified subsequently to profit or loss Foreign currency translation differences Cash flow hedges and net investment hedges 481.7 11 346.2 193.7 (45.6) (40.2) 300.6 153.5 7.3 .................. - fair value movements recognised in other comprehensive income -reclassified and reported in profit or loss -amount recognised in inventories Tax credit/(charge) on cash flow hedges and net investment hedges Other comprehensive income for the year, net of tax Total comprehensive income for the year Attributable to: Owners of the parent .................... ... Non-controlling interests .............. (7.5) .................. (30.1) 221.2 (22.1) (60.0) 5.9 (21.6) 6.5 (21.2) (32.5) 1109 268.1 264.4 672.5 746.1 ................... ..... 675.0 750.9 (2.5) (4.8) 672.5 746.1