In addition to providing information on current assets and their role in the business cycle, the balance sheet offers a wealth of data that can be used to measure the relationship between the utilization of total assets, profitability and supply chain execution. Table 13.1 provides a short list of tools that NikoTech management can use to measure the productivity of all assets employed in the supply chain in order to take a comprehensive view of asset performance. Interpretation of NikoTech's performance is as follows.
|
$ in Millions |
|||
|---|---|---|---|
|
Y1 |
Y2 |
Delta |
|
|
Working Capital |
$1,059 - $303 = $756 |
$1,212 - $407.4 = $804.6 |
$48.6 |
|
Current Ratio |
$1,059/$303 = 3.5 times |
$1,212/$407.4 = 2.97 times |
(0.53) times |
|
Quick Ratio |
$579/$303 = $1.91 |
$552/$407.4 = $1.35 |
($0.56) |
|
Inventory Turnover |
$990/$480 = 2.06 times |
$1,239/$660 = 1.9 times |
(0.15) times |
|
Receivables Turnover |
$1,440/$285 = 5.05 times |
$1,698/$450 = 3.8 times |
(1.25) times |
|
Payables Turnover |
$990/$285 = 3.47 times |
$1,239/$360 = 3.44 times |
(0.03) times |
|
Total Asset Turnover |
$1,440/$1,599 = $0.90 |
$1,698/$1,776 = $0.95 |
$0.05 |