Nicholson Co. sells mobile telephones. It supplies its customers with telephones and wireless telephone connections. Customers pay an annual fee plus a monthly charge based on calls made.
The company has recently employed a consultant to install a balanced scorecard system of performance measurement and to benchmark the results against those of Nicholson Co.'s competitors. Unfortunately, the consultant was called away before the work was finished. You have been asked to complete the work. The following information is available:
Nicholson Co.
Operating information for the year ended 30 Nowember $20 \times 0$
$$
\begin{array}{lr}
\text { Sales revenue } & \$ 480 \text { million } \\
\text { Sales attributable to new products } & \$ 8 \text { million } \\
\text { Average capital employed } & \$ 192 \text { million } \\
\text { Profit before interest and tax } & \$ 48 \text { million } \\
\text { Average numbers of customers } & 1,960,000 \\
\text { Average number of telephones returned for repair } & \\
\quad \text { each year } & 10,000 \\
\text { Number of bill queries } & 12,000 \\
\text { Number of customer complaints } & 21,600 \\
\text { Number of customers lost } & 117,600 \\
\text { Average number of telephones unrepaired at the } & \\
\quad \text { end of each day }
\end{array}
$$
It is assumed that there are 365 days in the year.
(a) Calculate the following ratios and other statistics for Nicholson $\mathrm{Co}$. for the year ended 30 November 20x0:
(i) return on capital employed;
(ii) return on sales (operating margin):
(iii) asset turnower;
(iv) average wait for a telephone repair (to the nearest whole number).
(6 marks)
(b) Calculate the following statistics for Nicholson Co. (Give your answers to two decimal places.):
(i) percentage of customers lost per annum;
(ii) percentage of sales attributable to new product.
(2 marks)
(c) Complete the following explanation of a balanced score-card.
(i) A balanced scorecard measures performance from four perspectives: customer, learning and growth, financial success and
a. non-financial success
b. business process flexibility
c. business process efficiency
(ii) The scorecard is balanced in that it requires managers to
a. achieve on an equal number of KPls in each perspective
b. offset bad performance in one area with good performance in another
c. deliver performance in all four areas