Benchmarking is the continuous measuring of products, services, processes, activities, and practices against a firm’s best competitors or those companies recognized as industry leaders. By benchmarking suppliers against industry leaders you can identify areas for supplier improvement.

The following is financial information for Tech Talk, of a manufacturer of components for cell phones:

Tech Talk

Balance Sheet (CDN $ in thousands)

For Period Ending December 31, 2018

ASSETS

        Cash                                                                         $100.1

        Marketable Securities                                            $130.7

        Accounts receivable                                               $900

        Inventories                                                               $900

Total current assets                                                    $2,030.8

        Investment at equity                                               $800

        Goodwill                                                                   $400

Total investments and other assets                       $1,200

Property, plant, and equipment                               $1,300

TOTAL ASSETS                                                            $4,530.8

LIABILITIES AND SHAREHOLDERS’ EQUITY

        Notes Payable                                                        $501.3

        Accounts Payable                                                  $526.3

        Taxes due on income                                            $236

        Accrued payroll and employee Benefits             $466.3

Total current liabilities                                               $1,729.9

Long-term debt                                                             $1,034.0

Shareholder’s equity                                                  $1,766.9  

TOTAL LIABILITIES AND

SHAREHOLDERS’ EQUITY                                       $4,530.8

Tech Talk

Statement of Income Data (CDN $ in thousands)

Year Ended December 31, 2018

Net Sales                                                                              $7,000

        Cost of goods sold                                                       $6,000

        Selling, general, and Administrative expenses       $500

        Interest expense                                                           $300

Cost and expenses                                                           $6,800

Income before taxes                                                         $200

Estimated taxes                                                                 $90     

NET INCOME                                                                       $110

Going to the Industry Canada website you can use the SME Benchmarking Tool for financial data.  It can be found at http://www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home.

• Create a report using data for Ontario, Incorporated Businesses, distribution is by Total Revenue and have values in Thousands of Dollars.  
• You will need to browse for a NAICS code to use appropriate for this supplier.  
• Export this data into Excel and submit it as support for your drop box assignment.  
• Use this data to compare Tech Talks (To the lower 25% Benchmark data in the industry):
  • Current ratio
  • Debt to Equity ratio
  • Return on equity
  • Net profit margin and
  • Inventory turnover

• Comment on whether Tech Talk’s is better or worse than the benchmarks and what this means for your supplier.  
• Make sure you comment on areas for improvement for the supplier.  
• You should organize your analysis in a chart that looks something/similarto the one below:

FINANCIAL RATIOS	Tech Talk	Benchmark	Better /Worse	Comments:
Current ratio
Debt to equity ratio
Return on Equity
Net Profit Margin
Inventory Turnover