s low current and quick ratios. It seems that company’s management aimed to pay off its long-term liabilities to save the interest payments and improve the profitability. This has caused a negative impact on the company’s cash reserves and has made M&S rely on their short-term liabilities more for financing the operations. The company seems to have high inventory days ratio which shows the company stuck its money in inventory for 14-15 days which is also unhealthy for the liquidity of the company. M&S is one of the very few retail companies which have a history of paying dividends to its shareholders despite low profits. The company has continued to pay dividends to its shareholders for many years. In the year 2010, the company paid a dividend of 15p/share, followed by 17p/share in the year 2011 and 2012. The dividend cover for the company ranges from 2 to 2.5 times for the company despite low profits. This could be one of the reasons for the company to have low cash reserves that it continues to pay dividends no matter the performance is weak or the liquidity position isn’t very strong.Growth Ratios:The company’s growth performance can be seen by the increase in earning price ratio (EPS). The company had an EPS of 33.5p in 2010, 38.8p in 2011 and 32.5 in the year 2012. Marks and Spencer Company.
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