CF713SU Accounting And Finance

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CF713SU Accounting And Finance

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CF713SU Accounting And Finance. Question: Using the annual report and accounts for the year ended January 2017, and any other relevant information, write a report on the financial performance of Next PLC.
Specifically, your report should address:
(a) The extent to which the company discloses financial information both in the annual report and on their web site.
(b) the company’s performance for the two year period up to January 2017 with reference to the income statement; balance sheet, and cash flow statement together with any relevant notes to the accounts.

CF713SU Accounting And Finance

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Introduction:
The present report is based on the evaluation of the financial information of Next Plc disclosed both in the web site of the organization along the annual report of the firm. Next Plc was initially founded in the year 1864 and the company rapidly became the pioneer for the development of chain stores in Britain. Next Plc is regarded as the British multinational clothing footwear and home products Retailer Company that has hits headquarter in Enderby Leicestershire. The corporation has more 700 stores out of which 500 are located in United Kingdom and Ireland. The remaining 200 stores are located in the European continental, Asian and middle east. Next Plc is one of the largest clothing retailing company with the company being listed on the Stock Exchange under the FTSE 100 index (Nextplc.co.uk 2018). The current report will be evaluating the performance of Next Plc over the period of two years namely 2016 and 2017. A reference to the income statement, balance sheet and cash flow for the organization would be made together with special emphasis would be made to the relevant notes to the accounts section of the company. Extent to which Next Plc Discloses the financial information in the annual report and Website: The financial statements of the Next Plc and its groups is disclosed in the financial report where the corporation provides the basis of preparation of financial reports.

CF713SU Accounting And Finance

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The annual report of Next Plc provides the information relating to the basis of preparation of financial reports. As evident from the financial reports the financial statements of Next Plc and its groups are prepared in compliance with the international financial reporting standard (Scott 2015). The standard has been adopted by Next Plc for use in European union and in agreement with the “Companies Act 2006”. The disclosure of annual report for Next Plc provides that the financial report of the company is prepared by following the historical costs basis excluding specific financial instruments namely the liabilities and the share based payments that are assessed based on the fair value. To help the investors with comparability of the financial information, the disclosure of profits and sales in the annual reports are made based on 52 weeks’ basis. The annual report of Next Plc also provides the information relating to the basis of consolidations. Evidences obtained from the annual report states that the company has incorporated the consolidated financial statements in the yearly report (Schaltegger and Burritt 2017). Furthermore, the company has made disclosure relating to the subsidiaries over which Next Plc exercises control. The annual report of Next Plc provides that all the intra group transactions namely the balances, income and expenditure are eliminated on the consolidations.

Reduced Disclosure Requirements:

The annual report of the Next Plc provides that the directors of the company are accountable for preparing the strategic reports, director’s report and financial statements in agreement with the applicable laws and regulations (Williams 2014). The directors of Next Plc prepare the financial reports in compliance with the “Companies act 2006” and follows the UK standard of accounting FRS 101 “Reduced Disclosure Framework”. In compliance with the group financial statements, the annual report provides further disclosure by complying with the necessary requirements of the IFRS to enable the users of the annual report to better understand the impact on some particular transactions. Evidences from the annual report provides that the committee of Next Plc reviews the financial reports of the company and evaluates whether the appropriate secretarial procedures have been ordered and whether the administration of the organization has undertaken correct estimations and projections. On a satisfactory note, the judgements that are made by the management are considered to be reasonable and suitable accounting policies are adopted based on the correct disclosures that are made in the accounts (Warren and Jones 2018). The disclosures in the annual statement and accounts also provides the users with the description of risks and explain the process of managing or mitigating the financial risks.

CF713SU Accounting And Finance

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Accounting policy disclosure:

Disclosure in the financial report provides the disclosure of accounting policies. The financial report of the Next Plc is prepared in compliance with the companies act 2006 and financial reporting standard 101 (Henderson et al. 2015). Evidences obtained from the financial statement provides that the Reduced disclosure requirement have been applied at time of preparing financial reports in the certain areas such equity based settled share payments. The financial reports of the company discloses the financial information that are consistent with the group assets and liabilities and are contained within in the consolidated balance sheet. Disclosure of financial information on the websites: On gauging into the websites of the Next Plc the company has disclosed information for the year ended January 2018. The disclosure made provides that the company has experienced a challenging year and in line with the guidance stated for January 2018 the earnings per share of the organization has declined by -5.6% to 416.7p. The websites of Next Plc provide disclosure that even though the wider economy the market for clothing and high street appears to remain challenging at the central guidance of the company for the year ahead (Robson, Young and Power 2017). The company states that the earning per share would modestly move forward. Furthermore, the board of Next Plc continues to remain focus on creating the value for the shareholders by delivering long run sustainable growth in earnings per share. The websites of Next Plc provide that its strategy remains unchanged and emphasis on the products that helps in improving the profitability along with providing surplus amount of cash to its shareholders. The websites provide the disclosure related to the financial highlights for the year ended 2017 as the company discloses that the total amount of group sales revenue have decreased to £4117,5 million which is down by -0.5%. Furthermore, information relating to the gross profit has been made as the gross profit for the firm fell down by -8.1% to £726.1 million. In spite of the declining profit the cash flow of the company remained strong and the company returned £586 million to the shareholders during the year 2017.