ConvenientShop Limited operates a chain of department stores in the city. In the past the business had expanded rapidly and covered almost all districts of the city. However, recently companys peformance has been declining and profits have reduced. The company was forced to closed some of their stores in suburban areas. Boredom is spreading among companys staff and customer complaints have been increasing as they feel negatively toward companys service quality. If several years ago the customer complaint rate was 1.5 complaints for every 1000 customers now it is around 5 for very 1000 customers. Senior managers are really concerned about recent business performance of the company. They decided to investigate the problems and try to correct any derailment in companys strategy implementation. With the support of functional departments, the information on the financial performance is prepared and reported to the board of directors. Customers and employees surveys are also conducted to provide more information about the current business operation of the company. (See appendices)

Required

a. Using the financial data provided, calculate the following ratios for the last two years of business and present your findings in a table;

Gross profit margin

Net profit margin

Return on capital employed

The current ratio

The quick ratio

Inventory turnover period

Accounts payable payment period

Gearing ratio

Earnings per share

Dividend payout ratio

b. Prepare a balanced scorecard for the business that will assist the owner-managers in delegating responsibilty for improvements while ensuring that the key aims of the business are met.

c. Demonstrate how one of the measures included in your balanced scorecard will be calculated.

d. Critically analyse the potential benefits that could be derived from the use of the measures in your balanced score card, emphasising the actions which will be necessary to ensure maximum benefit of its use.

e. Critically evaluate the effectiveness of the balanced scorecard approach in alleviating the problems associated with short termism.