The company chosen for the comparison with Marks and Spencer Groups is Coca-Cola Company, a multinational corporation which produces non-alcoholic beverages that range from soft drinks to juices and coffees. The Coca-Cola Company operates in the beverage sector being one of its leaders (Stumer, 2021. p. 7). The main reason for picking this company is due to the level of success it has achieved over the past decades.
Coca-Cola and Marks and Spencer’s companies’ comparison is based on four ratios: return on equity, quick ratio, gross margin, and current ratio. For Coca-Cola, company ratios for 2020 and 2019 include; current ratio 0.76 and 1.05, gross margin ratio 1.76 and 40.355, quick ratio 0.63 and 0.95, and ROE 1.4895 and 0.995. For Marks and Spencer, ratios include: current ratio 0.6688 and 0.7217, gross margin ratio 1.565 and 37.8316, quick ratio 0.72 and 0.98, and ROE 1.3913 and 0.985 (Kim, Pierce & Yeung, 2012. P. 706). Results show that Coca-Cola is in a better position in gross margin, current, and ROE (Stumer, 2021.p. 42). It indicates that Coca-Cola has a better chance of meeting its financial obligations. However, Marks and Spencer Group plc. has proven to be better in terms of quick ratio for the two years – it means the business is healthy and can be able to pay for its liabilities (Kim, Pierce & Yeung, 2012. P. 706). However, it is less than 1 for both companies, so they still need improvement.
The comparison of both companies indicates that they demonstrate appropriate performance. At the same time, the ratios that are less than one are not desirable for both companies. Nevertheless, Coca-Cola Company and Mark and Spencer overall show they are not badly off financially, even if they both need improvement to guarantee stable growth and development.
Reference List
Kim, M.P., Pierce, S.R. and Yeung, I. (2021) ‘Why firms announce good news late: earnings management and financial reporting timeliness,’ Contemporary Accounting Research, 38(4), pp.691-722.
Stürner, M.L. (2021) Equity valuation: Coca-Cola Company (Doctoral dissertation): Catolica-Lisbon school, pp.7-57.