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Chapter 24: Q2TI (page 1334)

Classify each key performance indicator according to the balancedscorecard perspective it addresses. Choose from the following: financialperspective, customer perspective, internal business perspective, or learning andgrowth perspective.

9. Number of repeat customers

10. Employee turnover

11. Revenue growth

12. Number of on-time deliveries

13. Number of defects found during the manufacturing process

Short Answer

Expert verified

Answer

9) Customer perspective

10) Learning and growth perspective

11) Financial perspective

12) Customer perspective

13) Internal business perspective

Step by step solution

01

Meaning of Employee turnover

Employeeturnover is the amount or extent of specialists who stopped their employment and are supplanted by new ones. Employers who wish to examine the causes of turnover or calculate the cost-to-hire for monetary planning may discover it valuable to degree staff turnover.

02

Classifying each key performance indicator according to the balanced scorecard perspective addresses

S.no.


Key performance

Balance scorecard

9Number of repeat customerscustomer perspective
10Employee turnover
learning and growth perspective
11Revenue growth
financial perspective
12Number of on-time deliveries
customer perspective
13

Number of defects found during the manufacturing process


internal business perspective


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Most popular questions from this chapter

XTreme Sports Company makes snowboards, downhill skis, cross-country skis, skateboards, surfboards, and inline skates. The company has found it beneficial to split operations into two divisions based on the climate required for the sport: Snow Sports and Non-snow Sports. The following divisional information is available for the past year:

Net Sales Revenue

Operating Income

Average Total Assets

ROI

Snow Sports

\(5,500,000

\)990,000

$4,100,000

24.1%

Non-snow Sports

8,500,000

1,530,000

6,100,000

25.1%

XTreme’s management has specified a 13% target rate of return. Calculate each division’s profit margin ratio.

Interpret your results.

Using ROI and RI to evaluate investment centers

Consider the following condensed financial statements of Pure Life, Inc. The company’s target rate of return is 30%.

PURE LIFE, INC. Income Statement For the Year Ended December 31, 2018 Net Sales Revenue Cost of Goods Sold Gross Profit Operating Expenses 2,300,000 2,000,000 300,000 (34,000) 266,000 3,700,000 \( 6,000,000 Operating Income Interest Expense Other Income and (Expenses): Income Before Income Tax Expense Income Tax Expense Net Income 93,100 \) 172,900

PURE LIFE, INC. Comparative Balance Sheet As of December 31, 2018 and 2017 Assets 2018 2017 Cash Accounts Receivable Supplies Property, Plant, and Equipment, net Patents, net Total Assets Accounts Payable Short-term Notes Payable Long-term Notes Payable Common Stock, no Par Retained Earnings Total Liabilities and Stockholders’ Equity Liabilities and Stockholders’ Equity \( 62,000 200 204,000 101,000 \) 394,000 26,800 \( 76,000 600 305,000 163,000 \) 606,000 61,400 52,000 \( 31,000 126,500 169,000 15,500 \) 394,000 148,000 \( 29,000 196,000 205,500 27,500 \) 606,000

Requirements

1. Calculate the company’s ROI. Round all of your answers to four decimal places.

2. Calculate the company’s profit margin ratio. Interpret your results.

3. Calculate the company’s asset turnover ratio. Interpret your results.

4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.

5. Calculate the company’s RI. Interpret your results.

Wolf Paints is a national paint manufacturer and retailer. The company is segmented into five divisions: Paint Stores (branded retail locations), Consumer (paint sold through home improvement stores), Automotive (sales to auto manufacturers), International, and Administration. The following is selected divisional information for its two largest divisions: Paint Stores and Consumer.

Net Sales Operating Average

Revenue Income Total Assets

Paint Stores \( 3,980,000 \) 476,000 $ 1,380,000

Consumer 1,315,000 195,000 1,600,000

Management has specified a 21% target rate of return.

Requirements

1. Calculate each division’s ROI. Round all of your answers to four decimal places.

2. Calculate each division’s profit margin ratio. Interpret your results.

3. Calculate each division’s asset turnover ratio. Interpret your results.

4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.

5. Calculate each division’s RI. Interpret your results, and offer a recommendation for any division with negative RI.

6. Describe some of the factors that management considers when setting its minimum target rate of return.

Explain the difference between a controllable and a non-controllable cost.

Consider the following condensed financial statements of Forever Free, Inc. The company’s target rate of return is 40%.

Forever Free, Inc

Income Statement

For the year ended December 31, 2018

Net Sales revenue

\( 3,500,000

Cost of Goods Sold

2,200,000

Gross Profit

1,300,000

Operating Expenses

950,000

Operating Income

350,000

Other income and (expenses)

Interest Expense

(27,000)

Income before income tax expense

323,000

Income tax expense

113,050

Net Income

\) 209,950

Forever Free, Inc

Income Statement

For the year ended December 31, 2018

2018

2017

Assets

Cash

\( 64,000

\) 52,000

Accounts Receivable

49,200

17,800

Supplies

1,000

400

Property, Plant, and Equipment, net

331,800

229,800

Patents, net

135,000

119,000

Total Assets

\( 581,000

\) 419,000

Liabilities and Stockholders’ Equity

Accounts Payable

\( 17,000

\) 19,000

Short-term Notes Payable

136,000

42,000

Long-term Notes Payable

184,000

114,500

Common Stock, no Par

232,000

242,000

Retained Earnings

12,000

1,500

Total Liabilities and Stockholders’ Equity

\( 581,000

\) 419,000

Requirements

1. Calculate the company’s ROI. Round all of your answers to four decimal places.

2. Calculate the company’s profit margin ratio. Interpret your results.

3. Calculate the company’s asset turnover ratio. Interpret your results.

4. Use the expanded ROI formula to confirm your results from Requirement 1. Interpret your results.

5. Calculate the company’s RI. Interpret your results.
See all solutions

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