ASSIGNMENT MIDTERM

MANAGERIAL ACCOUNTING 2

GROUP 9

Members Student mail

Hoàng Tuấn Huy (leader) 11201176@st.neu.edu.vn
Lê Ngọc Khang 11205573@st.neu.edu.vn
Trần Minh Huy 11201811@st.neu.edu.vn
Nguyễn Duy Anh 11200203@st.neu.edu.vn
Trương Đức Anh 11200420@st.neu.edu.vn
Trương Thế Vinh 11208487@st.neu.edu.vn
 Table of Contents
a) Using the financial data provided, calculate the following ratios for the last two years of
business and present your findings in a table...........................................................................2
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..................................................................................................................................... 4
c) Demonstrate how one of the measures included in your balanced scorecard will be
calculated................................................................................................................................. 6
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...........................................................................................7
1) Financial Perspective........................................................................................................ 7
2) Customer Perspective.......................................................................................................7
3) Internal Perspective..........................................................................................................8
4) Innovation and Learning Perspective...............................................................................8
e) Critically evaluate the effectiveness of the balanced scorecard approach in alleviating the
problems associated with short termism..................................................................................9
REFERENCE............................................................................................................................. 10

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

Number Target 2020 2021

1 Gross profit margin 32.86% 31.54%
2 Net profit margin 5% 2.12%
Return on capital
3 20.59% 8.125%
employed
4 The current ratio 1.36 1.84
5 The quick ratio 0.53 1.21
Inventory turnover 5.88 7.12
6
period (62.07 days) (51.26 days)
Accounts payable
7 61.52 days 58.24 days
payment period
8 Gearing Ratio 45.45% 41.67%
9 Earnings per share 0.112 0.357
Dividend payout
10 42.86% 36.36%
ratio

Calculation:
1,150,000
1) Gross profit margin 2020: X 100 = 32.86%
3,500,000
820,000
2021: X 100 = 31.54%
2,600,000
175,000
2) Net profit margin 2020: X 100 = 5%
3,500,000
55,000
2021: X 100 = 2.12%
2,600,000
350,000
3) Return on capital employed 2020: X 100 = 20.59%
2,185,000−(375,000+110,000)
130,000
2021: X 100 = 8.125%
2,000,000−(300,000+100,000)
660,000
4) The current ratio 2020: = 1.36
485,000
735,000
2021: = 1.84
400,000

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 660,000−400,000
5) The quick ratio 2020: = 0.53
485,000
735,000−250,000
2021: = 1.21
400,000
2,350,000
6) Inventory turnover period 2020: = 5.88 ( 365/5.88 = 62.07 days)
400,000
1,780,000
2021: = 7.12 ( 365/7.12 = 51.26 days)
250,000
365∗300,000
7) Accounts payable payment period 2020: = 61.52 days
1,780 , 000
365∗375,000
2021: = 58.24 days
2,350,000

500,000
8) Gearing ratio 2020: X 100 = 45.45%
1,100,000
500,000
2021: X 100 = 41.67 %
1,200,000
55,000
9) Earning per share 2020: = 0.112
490,000
175,000
2021: = 0.357
490,000
75,000
10) Dividend payout ratio 2020: X 100 = 42.86%
175,000
20,000
2021: X 100 = 36.36%
55,000

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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.
Objectives Measures Initiatives Target
- Improve operational Increase
Increase Gross profit margin efficiency profitability
profitability percentage (+) - Monitor and rate by 7%
manage cash flow every year
- Reduce operating
Increase
cost
Increase sale growth rate by
Financial Growth rate (+) - Achieve economies
growth rate 2% every year
of scale though bulk
for two years
purchase
Increase
Increase Gross profit (+) - Increase revenues.
revenue by 8%
revenues of ROA (+) - Make more though
during the next
total assets ROE (+) use of asset
year
Customer A percentage of
customers that "strongly
agree and agree" with
the question "How
satisfied are you with the
product information
provided?" (+)
Percent of customers Survey
- Offerring more
that "strongly agree and responses
Enhance the promotion or
agree" with the question "strongly agree
customer discount
"How satisfied are you and agree"
satisfication - Increase the quality
with the value for money reach more
of products
of your purchase?" (+) than 50%
A percentage of
customers that "strongly
agree and agree" with
the question "How
satisfied are you with the
selection of our goods?"
(+)
Increase Percent of customers - Provide and improve Survey
customer that "strongly agree and resolution over responses

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 agree" with the question
"strongly agree
"How satisfied are you
customer service and agree"
service with the resolution of
issues reach more
your customer service
than 50%
issue?" (+)
Reduce
administrative
Reduce
Train the employees expense of
administrative Gap in total turnover two
so that they become total revenue
expense of periods (+)
more efficient by 2% every
total revenue
year for next 5
years
- Reduce
Strengthen the
- Develop quality defects or
establishment - New product revenue
Internal policies and errors
of internal (+)
Processes procedures -Achieve
system aimed - Customer satisfaction
- Establish feedback industry
at quality (+)
mechanisms recognition or
improvement
certifications

Reduce lead Use automatic Reduce time

tome from packing. Handle taken by 5% in
Average time taken (-)
online orders technology for every year for
to delivery speeding up next 3 years

Learning & Improve job Percent of customers - Provide more job Survey
Growth satisfaction that "strongly agree and benefit responses
agree" with the question - Make more "strongly agree
"Managers at ecouraged work and agree"
ConvenientShop keep enviroment reach more
people informed about - Improve the system than 50%
what is happening" (+) and processes
Percent of customers
that "strongly agree and
agree" with the question
“I have access to the
things I need to do my
job well" (+)
Percent of customers
that "strongly agree and
agree" with the question
“Most of the systems and
processes here support
us getting our work done
effectively" (+)

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 Percent of customers
that "strongly agree and
agree" with the question
“Company supports a
balance between work
and life" (+)

c) Demonstrate how one of the measures included in your balanced scorecard will be
calculated.
Step 1: Establish the Measure
To begin, define what a “Job Satisfaction Score" signifies within your organization. You may
choose to employ a questionnaire or survey featuring specific inquiries pertaining to job
satisfaction. These inquiries should encompass various facets of the job, including the work
environment, compensation, opportunities for career growth, work-life balance, and
relationships with colleagues and supervisors.
Step 2: Create and Administer the Survey
Craft a survey containing pertinent questions that capture the diverse dimensions of job
satisfaction. For instance:
- On a scale of 1 to 5, assess your current satisfaction with your compensation.
- Do you believe there are opportunities for career advancement within the company?
(Yes/No)
- Rate your work-life balance on a scale of 1 to 5.
Administer this survey to your employees, ensuring that responses remain anonymous to
encourage candid feedback.
Step 3: Compute the Job Satisfaction Score
Calculate the Job Satisfaction Score by amalgamating the responses garnered from the
survey. Several methods can be employed to calculate this score, but a straightforward
approach involves converting the responses into a numerical scale (e.g., 1 to 5) and
determining the average score. A higher average score corresponds to higher levels of job
satisfaction.
Illustrative Calculation:
Suppose your survey comprises 5 questions, and an employee's responses are as follows:
Compensation: 4
Career Growth: Yes
Work-Life Balance: 3
Relationship with Colleagues: 5

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Relationship with Supervisor: 4
Average Score = (4 + 1 + 3 + 5 + 4) / 5 = 3.4 (68% out of 100%)
This results in the employees’ job satisfaction score of 3.4 (68% out of 100%). Repeat this
process for all participating employees.

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.
1) Financial Perspective
- Benefits: Monitoring financial indicators ensures the organization's economic health.
Achieving financial goals indicates profitability and sustainability. Financial measures
like revenue growth, net profit margins, and return on investment (ROI) help assess
the organization's profitability and potential for growth. Monitoring expenses, the
cost of goods sold, and operating costs can lead to cost reduction, which can directly
impact profitability.
To ensure maximum benefit from these financial measures, organizations should take the
following actions:
- Regular Monitoring: Continuously track and analyze financial metrics to identify
trends and deviations from targets.
- Strategic Planning: Align financial goals and targets with the overall organizational
strategy.
- Risk Management: Identify and mitigate financial risks, such as market volatility or
economic downturns.
- Scenario Analysis: Conduct scenario analysis to assess the potential impact of various
economic conditions on financial performance.
- Accountability: Hold individuals and teams responsible for achieving financial
targets.
- Continuous Improvement: Encourage a culture of cost-saving and efficiency
improvements to drive financial performance.
2) Customer Perspective
- Benefits: Metrics such as customer satisfaction scores and Net Promoter Score (NPS)
help gauge customer happiness and loyalty, leading to repeat business and positive
word-of-mouth.
- Actions: To maximize customer satisfaction, organizations should actively seek
customer feedback, address complaints promptly, and continuously improve
products and services based on customer input.
To ensure maximum benefit from these customer perspective measures, organizations
should take the following actions:
- Customer-Centric Culture: Foster a customer-centric culture within the organization,
where every employee recognizes the importance of meeting customer needs.

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 - Employee Training: Invest in training and development to ensure that employees can
deliver excellent customer service.
- Benchmarking: Compare customer perspective metrics with industry benchmarks
and competitors to identify areas for improvement.
- Data Utilization: Make data-driven decisions based on customer feedback and
performance metrics.
- Feedback Loops: Create feedback loops that allow for quick adjustments and
improvements based on customer input.
- Continuous Improvement: Regularly assess and refine products, services, and
customer interactions to better align with customer expectations.
3) Internal Perspective
- Benefits: A safe workplace, efficient resource management, and optimized processes
contribute to overall organizational efficiency. Employee metrics, such as
productivity per employee, absenteeism rates, and employee satisfaction, can be
used to gauge workforce efficiency and morale.
- Actions: Regular safety training, resource utilization audits, and process optimization
initiatives can enhance internal performance. Invest in employee training and
development, implement performance management systems, and create a work
environment that promotes job satisfaction and engagement.
To ensure maximum benefit from these internal perspective measures, organizations should
take the following actions:
- Set Clear Objectives: Clearly define internal process objectives aligned with the
organization's strategic goals.
- Key Performance Indicators (KPIs): Select and track relevant KPIs that align with
internal perspective objectives.
- Process Mapping: Conduct detailed process mapping to identify bottlenecks and
areas for improvement.
- Training and Skill Development: Invest in employee training and skill development to
ensure that employees can effectively contribute to internal process improvements.
- Cross-Functional Collaboration: Encourage collaboration between different
departments or teams to streamline processes and implement improvements.
4) Innovation and Learning Perspective
- Benefits: Employee satisfaction and engagement metrics can indirectly contribute to
a culture of learning and innovation as content employees are more likely to
generate new ideas.
- Actions: Implement initiatives to improve job satisfaction, provide opportunities for
professional growth, and address employee concerns promptly.
To ensure maximum benefit from the Innovation and Learning perspective measures,
organizations should take the following actions:

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 - Clear Objectives: Set clear and measurable objectives related to innovation,
employee development, and knowledge sharing that align with the organization's
strategic goals.
- Key Performance Indicators (KPIs): Select relevant KPIs that reflect the desired
outcomes and align with innovation and learning objectives.
- Continuous Monitoring: Regularly track and assess the performance of these KPIs to
identify areas for improvement.
- Feedback Loops: Create feedback mechanisms that allow employees to share ideas
and suggestions for improvement.
- Cross-Functional Collaboration: Encourage collaboration between different
departments or teams to generate innovative ideas and solutions.
- Training and Development Programs: Invest in training, development, and skills
enhancement programs to foster a culture of continuous learning.

e) Critically evaluate the effectiveness of the balanced scorecard approach in alleviating

the problems associated with short termism.
The Balanced Scorecard (BSC) is a strategic framework used for managing an organization's
performance. It is designed to offer a well-rounded assessment of an organization's
performance by considering various perspectives, including financial, customer-related,
internal processes, and learning and growth aspects. Let's critically analyze how effective
the Balanced Scorecard approach is in this regard:
- Comprehensive Approach: The BSC encourages organizations to consider a range of
performance aspects beyond just financial indicators. By assessing factors like
customer satisfaction, internal processes, and employee development, it can help
shift the organization's focus away from immediate financial gains toward long-term
sustainability.
- Strategic Alignment: The BSC aids in translating an organization's strategic objectives
and goals into practical actions at various operational levels. This alignment can
discourage an exclusive focus on short-term financial outcomes and motivate the
pursuit of strategic objectives that have longer-term significance.
- Performance Assessment: By providing a structured system for evaluating
performance from diverse angles, the BSC promotes a more thorough evaluation of
organizational performance. This can act as a deterrent to hasty, short-term
decision-making that may jeopardize the organization's long-term prospects.

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 REFERENCE
- https://www.ssonetwork.com/human-resources/whitepapers/tools-templates-
balanced-scorecard-for-hr-services
- Ray, H.G., Eric, W.N., & Peter, C.B. Managerial Accounting 17th edition.
- https://www.smartsheet.com/all-about-balanced-scorecard

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