Task 2 [1000 words]

Following is the extracts from the summarised financial statement of Wandy plc, a retail group, for the year ended 30 June 2020, together with an extract from the chief executives report that accompanied their issues:

Statement of comprehensive income
	2020 m	2019 m
Revenue	9,062	9,022
Cost of Sales	(5,690)	(5,535)
Gross Profit	3,372	3,487
Operating expenses	(2,501)	(2,276)
Operating profit	871	1,211
Finance income	50	65
Finance costs	(215)	(147)
Profit before tax	706	1,129
Income tax expense	(199)	(308)
Profit for the year	507	821
Statement of financial position
	2020 m	2019 m
Non-current assets	5,868	5,979
Current assets
Inventories	1,020	850
Trade receivable	45	47
Cash and cash equivalents	5	100
Other current assets	320	185
	1,390	1,182
Total assets	7,258	7,161
Share capital and reserve	2,100	1,964
Non-current liabilities	2,851	3,208
Current liabilities
Trade payable	1,410	1,250
Other current liabilities	897	739
Total share capital and liabilities	7,258	7,161

Extract from the chief executives report:

The year at a glance

During the year, we acted decisively to meet the challenges of the global economic downturn due to the pandemic, taking steps to manage costs tightly and respond quickly to the changing needs of our customers. Our adjusted profits are down on last year to 507m. It is partly due to conditions on the High Street and our conscious decision to improve our value, without compromising our quality. We have built unrivalled trust in the Wandy brand over the last 125 years and will not sacrifice our core principles when times get tough. Though we have a strong emphasis on food, furniture and general merchandise, it is clothing that is our customers biggest discretionary purchase. As the UKs leading clothing retailer with the largest market share, it was inevitable that demand would ease off as customers reined in their spending. Although value market share is marginally down from 11.0 to 10.7%, we have held our volume market share at 11.2%. We believe this is evidence that our team is in tune with our customer base. We paid a dividend of 300 million during 2020 compared to 350 million which was paid out in 2019.

Question

1. Based solely on the information provided above, analyse the position and performance of Wandy plc in detail.
2. Use this analysis on the performance of the company to discuss whether:

• A potential investor would invest in this company
• Lender/ Supplier would agree to provide credit facility/goods on credit