Marks and Spencer Financial Principles

Topics: Corporate finance, Finance, Investment Pages: 10 (3138 words) Published: January 17, 2012
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. M&S sell high quality, great value clothing and home products as well as outstanding quality food. Around 21 million customers visit our stores each week and we have 78,000 employees across the UK and 42 territories globally .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 Hermes principles was basically set out to address one main question: what should owners expect from UK public companies and what should these companies expect from their owners? The underlying idea behind the principle is to create a common understanding between managers and owners, of the proper goal of a public company

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.

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. .

Mission & vision Statement
Vision:The standard against which all others are measured
Mission: Making aspirational quality accessible to all
Values: Quality, value, service, innovation and trust

Evaluating the financial Management policies and practice of Marks and Spencer PLC using Hermes principles. In trying to evaluate the financial management policies of Marks and Spencer let us a look financial management and Hermes principles and use the principles to help identify the areas of investigation Financial management is the term that signifies the affectivity of managing finance in the certain organization or company so that it can achieve its financial objectives. This is important so that it can generate wealth, profit to the shareholders, to generate cash flow, and to provide return on investment In general, the financial management comprises of the cost, the risks, and control. In order to properly balance the control and the risk, the cost must be at the minimum. This means that all of the decisions in the financial management should be a part of the entire strategy of the organization which should not be separated.

Hermes principles
The Hermes principles is set out to address what owners should from UK public companies and what should these companies expect from their owners. It aims at creating a common understanding between managers and owners. It also set out a number of expectation which should exist between owners and managers .the main aim was to get a better framework for communication and dialogue between the boards and shareholders .the ultimate goal of the company is to create wealth for its shareholders .In turn suggest a number of actions which it is reasonable for shareholders to expect of companies

Hermes overriding requirement is that companies be run on long term interest of shareholders. Companies adhering to this principle will not only benefit their shareholders and also the economy in which the company participate. Companies running on long term interest will need to manage effectively relationships with it employees, suppliers and customers, to behave ethically and have regard for the environment and the society as whole. Hermes hard 10 (Ten) Principles are broadly categorized in to 4 (Four) that is: *...
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