Critically evaluate the use of non-financial and multidimensional models of performance management in preparation for a discussion with your management team. Choose the Balanced Scorecard or the Performance Pyramid as a basis for your discussion.

Performance Improvement and Management in Health & Social Care

Task 1:

Prepare a 1500-word internal memorandum for the directors of the care home, critically discussing the advantages and disadvantages of at least two strategic planning models appropriate to the care sector in England.

The directors expect a recommendation as to which model you propose for business growth and why?
(35 marks)

Task 2:
The word count for 2a and 2b should not exceed 1000 words in total.

a) Briefly discuss the usefulness of a Du Pont analysis to shareholders and then apply it to BME Luxury Care Home using the financial statements above as a basis for your calculations. You must discuss the purpose of each formula, and each step in your calculations to make sure you have not made any errors. Discuss your findings in the context of the following industry averages:

Total margin 3.5%
Total asset turnover 1.5
Equity multiplier 2.5
Return on equity (ROE) 13.1%

(10 marks)

Task 2

b) Calculate and interpret the following ratios. You must explain the purpose of each formula, and each step in each calculation. Discuss your findings in the context of the following industry averages

Return on assets (ROA) 5.2%

Current ratio 2.0

Days cash on hand 22 days

Average collection period 19 days

Debt ratio 69%

Debt-to-equity ratio 2.5

Fixed asset turnover ratio 1.4

Task 3

Critically evaluate the use of non-financial and multidimensional models of performance management in preparation for a discussion with your management team. Choose the Balanced Scorecard or the Performance Pyramid as a basis for your discussion. (35 Marks)

Ten additional marks are allocated for presentation, referencing and academic writing.

LO1. Analyse, evaluate and apply a range of strategic planning models.

LO2. Calculate, interpret and critique a range of financial strategic performance measures such as Return on Investment (ROI) Residual Income (RI) and Economic Value Added (EVA).

LO3. Evaluate the use of problem-solving and investment appraisal models.

LO4. Critically evaluate the use of non-financial and multidimensional models of performance management.

To meet learning outcome 1, 2, 3 and 2, the student will need to provide the following:

Task 1:

• Use correct format for writing internal memorandum for directors

• Select at least two strategic planning models appropriate to the care sector in England

• Critically discuss their advantages and disadvantages

• Provide recommendations to the management on the best strategic planning model to use out of the two discussed above

Task 2:

a)
• Briefly explain the usefulness of a Du Pont analysis to shareholders of BME Luxury Care Home

• Apply it to assess the financial performance of BME by using its financial statement given as basis of your calculations

The formula for calculating Dupont:

Dupont=ROE=Net income/sales x Sales/Total Assets x Total Assets/Average Shareholder Equity

• Calculate Total Margin; Total Asset Turnover, Equity Multiplier and Return on Equity (ROE) and compare your answers with industrial averages under Task 2a:

• Profit Margin= Net income/Total Revenue

• Total Asset Turnover= Net Sales/Total Assets

• Equity Multiplier= Total Assets/Stockholder’s Equity

• Return on Equity (ROE)= Net come/Shareholder’s Equity

• Use google to find out uses of each formula above

Task 2

b) Using the financial statement of BME in the questions-

calculate the following:

• Return on Assets (ROA)=Net income/Total Assets

o Compare your answer with industry average (5.2%) under Task 2b and comment on it.

If your answer for ROA is lower than industrial average what does that mean, or if it is greater than industrial average what does that mean?

• Current Ratio= Current Assets/Current liabilities

o Compare your answer with industrial average (2.0) under Task 2b and comment on it.

If the current Ratio obtain is lower than industrial average what does that mean, or if it is greater than industrial average what does that mean?

• Debt Ratio=Debt/Assets x 100%

o Compare your answer with industrial average (69%) under Task 2b and comment on it. If the Debt Ratio obtain is lower than industrial average what does that mean, or if it is greater than industrial average what does that mean?

• Debt to Equity Ratio=Total Debt/Total Shareholder Equity

o Compare your answer with industrial average (2.5) given under Task 2b. If your answer is greater or less what does that mean

• Fixed Assets Turnover Ratio=Net Sales/Average Fixed Assets

o Compare your answer to the industrial average (1.4) given and comment on it

Task 3

• Critically evaluate the use of non-financial and multidimensional models with reference health and social care sector

• Select the Balanced Scorecard or the Performance Pyramid as a basis for your discussion

• Explain how they can help to determine performance

• You may look at their advantages and disadvantages

Additional skills related comments – Make sure all references used conform with the Arden guide to Harvard referencing. In order to gain a higher grade, your work must demonstrate originality of thought and good use of structure