Question 1 Nicholson Co sells mobile telephones. It supplies its customers with telephones and wireless telephone connections. Customers pay an annual fee plus a monthly charge based on calls made. The company has recently employed a consultant to install a balanced scorecard system of performance measurement and to benchmark the results against those of Nicholson Co’s competitors. Unfortunately the consultant was called away before the work was finished. You have been asked to complete the work. The following data is available. Nicholson Co Operating data for the year ended 30 November 2013 Sales revenue $480 million Sales attributable to new products $8 million Average capital employed $192 million Profit before interest and tax $48 million Average numbers of customers 1,960,000 Average number of telephones returned for repair each year 10,000 Number of bill queries 12,000 Number of customer complaints 21,600 Number of customers lost 117,600 Average number of telephones unrepaired at the end of each day 804. (a) Calculate the following ratios and other statistics for Nicholson Co for the year ended 30 November 2013. (i) Return on capital employed; (ii) Return on sales (operating margin); (iii) Asset turnover; (iv) Average wait for telephone repair (in days); (v) Percentage of customers lost per annum; (vi) Percentage of sales attributable to new products. (b) A balanced scorecard measures performance from four perspectives: customer satisfaction, growth, financial success and process efficiency. Required: Briefly explain any ONE of the four perspectives above.
Question 1
Nicholson Co sells mobile telephones. It supplies its customers with telephones and wireless
telephone connections.
Customers pay an annual fee plus a monthly charge based on calls made.
The company has recently employed a consultant to install a balanced scorecard system of
performance measurement and to benchmark the results against those of Nicholson Co’s
competitors. Unfortunately the consultant was called away before the work was finished. You
have been asked to complete the work. The following data is available.
Nicholson Co
Operating data for the year ended 30 November 2013
Sales revenue $480 million
Sales attributable to new products $8 million
Average capital employed $192 million
Profit before interest and tax $48 million
Average numbers of customers 1,960,000
Average number of telephones returned for repair each year 10,000
Number of bill queries 12,000
Number of customer complaints 21,600
Number of customers lost 117,600
Average number of telephones unrepaired at the end of each day 804.
(a) Calculate the following ratios and other statistics for Nicholson Co for the year ended
30 November 2013.
(i) Return on capital employed;
(ii) Return on sales (operating margin);
(iii) Asset turnover;
(iv) Average wait for telephone repair (in days);
(v) Percentage of customers lost per annum;
(vi) Percentage of sales attributable to new products.
(b) A balanced scorecard measures performance from four perspectives: customer
satisfaction, growth, financial success and process efficiency.
Required:
Briefly explain any ONE of the four perspectives above.
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