purchasing and sourcing course assignment

You will be marked as follows:

Excel Report attached and correct /2

Benchmark Ratios correct /2

Tech Talk Ratios Correct /2

Analysis of Tech Talks Financial Performance compared to Benchmark /4

Module 6 Dropbox Activity Benchmarking Performance

Benchmarking is the continuous measuring of products, services, processes, activities, and practices against a firms best competitors or those companies recognized as industry leaders. By benchmarking suppliers against industry leaders you can identify areas for supplier improvement.

The following is financial information for Tech Talk, of a manufacturer of components for cell phones:

Tech Talk

Balance Sheet (CDN $ in thousands)

For Period Ending December 31, 2011

ASSETS

Cash $100.1

Marketable Securities $130.7

Accounts receivable $900

Inventories $900

Total current assets $2030.8

Investment at equity $800

Goodwill $400

Total investments and other assets $1200

Property, plant, and equipment $1300

TOTAL ASSETS $4530.8

LIABILITIES AND SHAREHOLDERS

EQUITY

Notes Payable $501.3

Accounts Payable $526.3

Taxes due on income $236

Accrued payroll and employee

Benefits $466.3

Total current liabilities $1,729.9

Long-term debt $1,034

Shareholders equity $1766.9

TOTAL LIABILITIES AND

SHAREHOLDERS EQUITY $4530.8

Tech Talk

Statement of Income Data (CDN $ in thousands)

Year Ended December 31, 2011

Net Sales $7,000

Cost of goods sold $6,000

Selling, general, and

administrative expenses $500

Interest expense $300

Cost and expenses $6,800

Income before taxes $200

Estimated taxes $90

NET INCOME $110

Going to the Industry Canada website you can use the SME Benchmarking Tool for financial data. It can be found at HYPERLINK "http://www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home" http://www.ic.gc.ca/eic/site/pp-pp.nsf/eng/home. Create a report using data for Ontario, Incorporated Businesses, distribution is by Total Revenue and have values in Thousands of Dollars. You will need to browse for a NAICS code to use appropriate for this supplier. Export this data into Excel and submit it as support for your drop box assignment. Use this data to compare Tech Talks: Current ratio, Debt to Equity ratio, Return on equity, Net profit margin and Inventory turnover to the Lower Middle (25%) Benchmark data in the industry. Comment on whether Tech Talks is better or worse than the benchmarks and what this means for your supplier. Make sure you comment on areas for improvement for the supplier. You should organize your analysis in a chart that looks something like this:

FINANCIAL RATIOS	Tech Talk	Benchmark	Better /Worse	Comments:
Current ratio
Debt to equity ratio
Return on Equity
Net Profit Margin
Inventory Turnover