Question: Balanced scorecard Candle IT Institute Candle IT Institute (CITI), a provider of a software trainer mainly used in medium and

d large sized businesses. The institute was founded to exploit the newly available statistical software widely used in Softland. It is now considering diversifying their training in accounting software giving greater flexibility to customer. You have been provided with financial information relating to the institute in Appendix 1. In Appendix 2 you have been provided with non-financial information which is based on the balanced scorecard format.

Appendix 1: Financial information Turnover ($000) Net profit ($000) Average cash balances ($000) Average trade receivable days (industry average 30 days) Inflation rate (%)

Current year 650 99 15 22 days

Previous year 480 95 12 28 days

Appendix 2: Balanced Scorecard (extract) Customer perspective Number of customers % customer who complained Market share Drop-out rate Current year 12000 14% 56% 20% Previous year 11200 8% 80% 11%

Internal business process Employee retention rate Course completion time Pass rate of students

Current year 60% 10 weeks 46%

Previous year 80% 12 weeks 50%

Learning and growth perspective Number of new courses arrived % revenue from new courses Number of lecturer training program

Current year 3 10% 3

Previous year 0 0 3

Required: (a) Using the information in Appendix 1 only, comment on the financial performance of the business. (6 marks) (b) Using the data given in Appendix 2 comment on the performance of the business. Include comment on customer knowledge, internal business process and learning/growth, separately, and provide a concluding comment on the overall performance of the business. (11 marks) (c) Discuss why CITI should consider balanced scorecard to assess the performance of the business (3 marks) (20 marks)