Question
Payday is a business providing loans. You are provided with the following information about its recent performance. Financial information current year previous year Revenue 27,000
Payday is a business providing loans. You are provided with the following information about its recent performance.
Financial information current year previous year
Revenue | 27,000 | 25,000 |
Gross profit | 14,000 | 12,000 |
Net profit | 5,000 | 6,000 |
Average cash balance | 3,000 | 2,500 |
Average receivables | 45 days | 50 days |
Internal processes |
|
|
Error rates in loan applications | 20% | 15% |
Average time to complete application | 4 weeks | 5 weeks |
Customer services |
|
|
Number of investors | 100 | 82 |
Number of borrowers | 545 | 674 |
Number of complaints | 55 | 43 |
Innovation and learning |
|
|
% from non-core work | 2% | 3% |
Industry average % non-core work | 25% | 15% |
Employee retention rate | 50% | 70% |
REQUIRED:
- Evaluate the financial performance of this company using the financial information only.
[7 marks]
- Evaluate the performance based on the non-financial information using the balanced scorecard approach
[8 marks]
- Explain why the non-financial information may provide a better indication of the likely future success of Payday.
[10 marks]
Total 25 marks
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