Next Ratio Analysis

Introduction

Next plc is a leading UK based retail outlet which offers a variety of products of high standard including clothing and footwear domestic products and accessories. It has distribution networks through tree main avenues: Next Retail, a network of 500 stores based in the UK and Eire, the Next Directory, a direct mail catalogue and online web based store with more than 2 million active customers, and Next International, with more than 170 stores abroad. Next plc is attached to additional businesses such as; Next plc Sourcing which is a designer of sources and buys the products of Next branded products. Venture which deals with customer services management.

Including Lipsy, an innovative company designing and selling its unique branded 'younger women's' range of products through the channels of retail, wholesale and online. It has been a trying year for Next plc but against the odds it has surfaced in a good financial state, reflected in the strong net margins, robust financing, a healthy balance sheet and good cash flow. Throughout the year Next plc centered its attention on managing costs and sustained investment in their 'Next' brand increasing their range of produces, advertising and outlets. Next Plc recognizes the challenges ahead regarding the world economic conditions but are confident that they will remain successful in spite of this. However, profits and sales have declined slightly compared with 2008 although their revenue was the same this year.

Analysis of Accounts

(All figures in £'000) | | | | | | |

| | | | 2008 | 2009 | % Difference | Reference |

Revenue |   |   |   | 3,329.1 | 3,271.5 | 1.73% | Income Statement p.40 |

Operating profit / loss | 537.1 | 478.3 | 10.95% | Income Statement p.40 |

Capital employed* | | | 776.5 | 1098.6 | 29.31% | Balance Sheet p.42 see below |

Net debt | | | | (740.5) | (628.6) | 15.11% | Net debt analysis p.80 |

Operating Cash flow | | | | 518.0 | 448.8 | 13.36% |...