Next provides shares for both the public and their employee, they have a share buyback where they can use in order to return cash to their shareholders. The shares that are held by their employee are included in their balance sheet at cost and this is deducted from the equity. From table 6 there was a decrease in the dividend payout and this is due to the employee shares not being paid in 2016. Debenhams on the other hand has a fixed dividend payout policy and have a buyback scheme but they do not provide their employees a scheme for buying shares within the company. Valuation is a financial process in order to determine what the company is worth; the valuation ratios looks at the insight of the company’s share price and where they serve as a usual took in evaluating investment potential. The price to earnings ratio gives a valuation between the company’s stock price and its earnings. This ratio gives the investors an overall idea of how much the market is willing to pay for the company’s earnings. A growing P/E ratio shows that the company is worth more while a P/E ratio going down shows that the company is out of favor for the investment. Looking at table 7, Next P/E ratio has been going up till 2015 where it went down but it still has a higher ratio that Debenhams. As Debenhams ratios been going up they have also been going down in 2016 and this could be due to the Brexit taking place in that year. This ratio gives a valuation of the company’s stock price relative to how much cash flow the company generates. Most of the investors prefer to use this ratio because it is harder to manipulate cash tallies than it would be to massage earning reports under accepted accounting principles. As shown in table 7 in 2015 Next had a high cash flow than Debenhams where the cash flow was a negative, over the 5 years Next have had a higher cash flow than Debenhams. The price to book value measures the value the market places on the book value of the company. It is known that a company with a ratio over 1 means that the market is willing to pay more than the equity per share but a ratio with lower than 1 means that the market is willing to pay less. Looking at table 7, Next ratio has been above the ratio that is set for the market and this means that the market is willing to pay a lot more than the equity per share and this is a positive for the company. While for Debenhams it has been over the ratio 1 from 2012 to 2015 but dropped below the average ratio 1. Throughout this analysis report we have learnt a great deal on both of the companies that have been chosen in order to analyse and compare. We can see that even though Next Plc and Debenhams has had a few tough years and this could be due to different reasons from company taking on more debt to paying dividends and the change of the environment such as Brexit taking place in 2016, all these could lead to a negative impact to not just Next but all companies. Looking at the efficiency ratios at the beginning of the report, we can see that the overall efficient company was Next Plc, they are selling their inventories much quicker than Debenhams and receiving payments from their customer a lot quicker and making sure they are on top of paying their suppliers. Was then followed by the cash cycle, and this showed us that Debenhams had a better system than Next, as they took less days in order to sell their inventory, pay their payables and then using their sells in order to create more inventories. Even though Next was not far off we can see that they had a better luck in 2016 and this could be due to more inventories and higher sell, which shows that are trying to create a better management in order to be able to turn their inventory into cash much quicker. The liquidity ratio showed us that Debenhams was a lot much quicker at paying their current liabilities than Next but also Next was within the overall sector average which could avoid a negativity on the company. In Solvency ratios, we can see that both companies rely more on their equity in order to meet their operating needs and this is a positivity on Next more than Debenhams as Next has a higher ratio. Even though Next had a higher ratio for returned on equity than Debenhams, we can see that this did not mean that this is positive for the company from the calculating return on capital employed as it was a negative ratio for both companies but Debenhams had a lower ratio and this doesn’t not mean that it is better than Next as Debenhams equity ratio was lower, it means it is a negative point for both of the companies. Looking finally on the valuation ratios, we can see that Next had the most positive points on the ratios than Debenhams, therefore from an investor point of view in regard to the valuation ratio the company is the most preferred to invest in would be Next Plc as it has a higher market value and the market is willing to pay a lot more for the share price.