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Essay / Research Paper Abstract
This 8 page paper examines the capital structure of Next and compares it to Marks and Spencer and Wal-Mart, who operate as Asda in the UK. The paper looks at the debt to asset ratio, the debt to equity ratio, the impact on earnings per share and the weighted average cost of capital. The bibliography cites 4 sources.
Page Count:
8 pages (~225 words per page)
File: TS14_TEnextms.rtf
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Unformatted sample text from the term paper:
arguments which favour different capital structures as well as practical concerns, such as the level of potential borrowing that may be available where there is greater leverage. If we look
at three firms all in the same industry we can consider the similarities and differences in their capital structure and how this may impact in the way they are seen
by investors and the results. We will look at three companies, Next, the large well known clothing retailer that not only has shops, but also an online and a
catalogue distribution channel. This is a large firm, so to get a comparison we need the large firms. The second firm is Marks and Spencer, this is also a well
known UK firm, a blue chip company that has faced problems but appears to be resolving them slowly, the main core product is also clothing and the firm also using
the internet as a distribution channel. The third store is Asda, this is a supermarket chain which sells clothing, as such this is a good comparator it is not only
the largest global retailer, this is a part of the Wal-Mart group, so it will be the Wal-Mart annual report figures that are used. This should provide an interesting comparison.
All figures, with the exception of the earnings per share figures are in millions unless otherwise stated. If we look at the different ratios for each of the stores
we can consider how they are calculated and what they mean. The first of the calculations is the debt asset ratio. In terms of capital structure there are two basic
types of capital, the first is debt. This is the borrowing in different forms, which includes all types of loans and overdraft facilities. The debt to equity ratio is the
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