TITLE:

GROUP ASSIGMENT

SUBJECT AND CODE:

MANAGMENT ACCOUNTING
(PMA3143)

PROGRAM:
DIPLOMA IN ACCOUNTING

GROUP MEMBERS:
NO NAME ID NUMBER SECTION

1 ANIQ MUQRI BIN AMIR YUSRI BGJ210111025 AA6.23

2 ADIB SYAMREZAL ZAQRY RAHMAD BGJ210111027 AA6.23

3 MUHAMMAD AFFIQ IRFAN BIN MD BGJ210110919 AA6.24
NASSIR

PREPARED FOR:

MOHAMAD NAIM BIN SHAFFIE

TABLE OF CONTENT

INTRODUCTION (FAMILY MART COMPANY) ...................................................................... 3

QUESTION 1 .......................................................................................................................... 4

OBJECTIVE OF PERFORMANCE MEASUREMENT .......................................................... 4

QUESTION 2 .......................................................................................................................... 5

2.1 THREE TYPES OF BENCHMARKS .............................................................................. 5

2.2 THREE TYPES OF RATIOS.......................................................................................... 6

QUESTION 3 .......................................................................................................................... 8

FINANCIAL PERFORMANCE MEASUREMENT ................................................................. 8

NON- FINANCIAL PERFORMANCE MEASUREMENT ....................................................... 9

ADVANTAGE AND DISADVANTAGE OF FAMILY MART MALAYSIA: ............................. 10

QUESTION 4 ........................................................................................................................ 11

CONCLUSION ...................................................................................................................... 12

MEMBERS PROFILE ........................................................................................................... 13

REFERENCES ..................................................................................................................... 14

APPENDICES....................................................................................................................... 15
 INTRODUCTION (FAMILY MART COMPANY)

A well-known and adored convenience store business, FamilyMart has won the hearts of people
all over the world.It is the second largest coviniance store chain in the world behind 7-elevent.
Established in 1973, FamilyMart is the first Japanese-owned convenience store chain to go
global and currently operates over 18,000 stores in Asia, including the Philippines, Taiwan,
Thailand, China, Indonesia, Vietnam, and Malaysia. FamilyMart had modest origins in Japan but
has since developed into a global phenomenon, providing a wide range of goods and services
to suit the requirements of individuals and families on a daily basis.

A warm and welcoming atmosphere greets you when you enter a FamilyMart, where
quality and convenience are harmoniously combined. FamilyMart has everything you need,
whether you're looking for a quick snack, a cool drink, or household necessities. The market
offers everything for everyone, from freshly brewed coffee and delectable pastries to ready-to-
eat meals and a wide variety of grocery items.

FamilyMart is a community centre rather than just a convenience store. During their
hectic schedules, it acts as a gathering area for friends to catch up, students to study, and
professionals to refuel. FamilyMart is always there for you when you need it, offering a
dependable and accessible shelter for your everyday essentials with its convenient locations
that are open 24 hours a day.

3
 QUESTION 1

OBJECTIVE OF PERFORMANCE MEASUREMENT

A performance measurement system's main goals are to assess performance, support

decision-making, and promote continuous improvement. By ensuring performance alignment,
identifying areas for improvement, facilitating informed decision-making, and encouraging a
culture of continuous improvement, these objectives support FamilyMart's overarching goals
and strategy. The system aids FamilyMart in monitoring progress, making wise decisions,
efficiently allocating resources, and enhancing overall business performance.

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 QUESTION 2

PERFORMANCE MEASUREMENT INDICATOR

2.1 THREE TYPES OF BENCHMARKS

Three types of benchmarking that are crucial for FamilyMart Co Ltd are:

1. Internal Benchmarking

Internal benchmarking involves comparing performance and practices within different

departments or stores within the organization. It allows FamilyMart to identify and share best
practices, successful strategies, and areas for improvement among its own stores.

For example, FamilyMart can compare the performance metrics, such as sales per
square foot, customer satisfaction scores, or operational efficiency, between different stores.
By identifying high-performing stores and analysing their practices, the company can
implement those strategies across other stores to improve overall performance.

2. Competitive Benchmarking

Competitive benchmarking involves comparing FamilyMart's performance against direct

competitors in the convenience store industry. This type of benchmarking helps the company
understand its relative market position, identify competitive advantages, and discover areas
where it may be lagging behind.

FamilyMart can compare various performance metrics, such as market share, sales
growth, profitability, customer retention, and product offerings, with those of its competitors
such as 7eleven and MyNews. This analysis provides insights into where FamilyMart needs
to improve or differentiate itself to remain competitive in the market

3. Non-competitive Benchmarking

Non-competitive benchmarking involves comparing FamilyMart's performance and practices

against companies outside the direct competition but in related or unrelated industries. This
type of benchmarking allows FamilyMart to gain insights and learn from successful practices
implemented by companies that excel in specific areas.

FamilyMart can compare its digital innovation efforts to those of businesses like Amazon
or Starbucks that are known for using cutting-edge technology. FamilyMart can improve its
online presence, put digital solutions in place, and offer customers a seamless omnichannel
experience by researching their digital strategies

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 2.2 THREE TYPES OF RATIOS

1. Profitability Ratios

Profitability ratios measure FamilyMart's ability to generate profits relative to revenue, assets,
and equity. They help assess operational effectiveness, cost management, and pricing
strategies. Monitoring these ratios enables the company to identify areas for improvement,
such as cost control and pricing optimization, to increase profitability.

For example, declining gross profit margins may prompt contract reviews or pricing
adjustments, while low Return On Equity (ROE) suggests the need for improved asset
utilization and debt reduction for shareholder value enhancement. Profitability ratios guide
FamilyMart in maximizing profits and ensuring financial success.

2. Liquidity Ratios

FamilyMart uses liquidity ratios like the current ratio and quick ratio to evaluate its capacity
to pay short-term debts. These ratios assist the business in assessing its liquidity position
and determining whether it has sufficient funds to support ongoing operations and make
supplier payments.
FamilyMart can manage working capital well, prevent cash flow problems, and take
advantage of growth opportunities by maintaining healthy liquidity ratios. When a company
has a low quick ratio, for instance, it may be prompted to optimise inventory levels and cash
conversion cycles.
Conversely, a high current ratio may indicate a strong ability to cover short-term
obligations. Liquidity ratios are essential for upholding FamilyMart financial stability and
meeting its operational demands.

3. Risk Ratios
Companies frequently use the debt-to-equity ratio as a risk ratio to evaluate their financial
risk. It is calculated by dividing the total debt by shareholders' equity and represents the ratio
of debt to equity financing. The risk ratio assists FamilyMart in assessing its risk exposure
and making defensible capital structure decisions.
A higher ratio might signify a higher risk profile, while a lower ratio suggests a more
conservative capital structure with lower financial risk. When evaluating risk and making
strategic decisions, FamilyMart should compare its ratio with industry benchmarks and take
other financial factors into account.

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 Overall, using these ratios enables FamilyMart to monitor and evaluate its financial
performance from various perspectives. By understanding its profitability, liquidity, and
efficiency, the company can make informed decisions, implement strategies to enhance
performance, and achieve long-term success. These ratios also help FamilyMart identify
areas for improvement, optimize resource allocation, and maintain financial stability,
ultimately contributing to the organization's growth and profitability.

Example calculation for each ratio :

Profitability = Gross Profit / Revenue x 100

Using Gross Profit Margin = RM870,046 / RM4,378,800 x 100
( RM’000 ) = 19.87%

Liquidity = Current Asset / Current Liabilities

Using Current Ratio = RM1,964,405 / RM1,381,650
( RM’000 ) =1.42 : 1

Risk = Total Liabilities / Total Equity

Using Debt to Equity Ratio = RM2,289,921 / RM2,545,514
( RM’000 ) = 0.9

FIGURES CAN BE CHECK ON APPENDICES PAGE

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 QUESTION 3

FINANCIAL PERFORMANCE MEASUREMENT

Financial performance measurement involves assessing an organization's financial health and

success. It primarily focuses on quantifiable metrics, such as revenue, profit, return on
investment, and cash flow. These metrics help evaluate the financial viability, profitability, and
efficiency of a company. Financial performance measurement is crucial for assessing the overall
financial success of an organization and its ability to generate value for shareholders.

ADVANTAGE OF FINANCIAL PERFORMACE MEASUREMENT

1. Objective Assessment: Financial metrics provide an objective assessment of an

organization's performance. They offer a clear picture of the financial health and
profitability of the company, allowing stakeholders to make informed decisions.

2. .Comparability: Financial performance metrics allow for easy comparison with industry
benchmarks and competitors. This helps in understanding how well the organization is
performing in relation to its peers and identifying areas of improvement.

3. Investor Confidence: Financial metrics are often used by investors to assess the potential
for a return on their investment. Strong financial performance can increase investor
confidence and attract additional investment.

DISADVANTAGE OF FINANCIAL PERFORMANCE MEASUREMENT:

1. Limited Scope: Financial performance metrics provide a narrow view of the organization's
overall performance. They may not capture critical non-financial factors that contribute to
long-term success, such as customer satisfaction, employee engagement, and
innovation.

2. Short-Term Focus: Financial metrics often emphasize short-term results and may
encourage management to prioritize short-term gains over long-term sustainability. This
focus on immediate financial performance could hinder investments in research and
development or employee training, which are crucial for future growth.

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 NON- FINANCIAL PERFORMANCE MEASUREMENT

Non-financial performance measurement involves evaluating an organization's performance

based on non-financial indicators and qualitative measures. These indicators can include
customer satisfaction, employee engagement, brand reputation, environmental impact, and
innovation. Non-financial performance measurement provides a more holistic view of an
organization's overall performance and considers factors beyond financial outcomes.

ADVANTAGE OF NON-FINANCIAL PERFORMANCE MEASUREMENT:

1. Balanced Perspective: Non-financial performance measurement complements financial

metrics by providing a more balanced perspective on an organization's performance. It
considers factors that contribute to long-term sustainability, such as customer loyalty,
employee well-being, and environmental responsibility.

2. Long-Term Focus: Non-financial metrics encourage a long-term focus by considering

indicators that drive sustainable growth and success. It helps organizations align their
strategies with broader social and environmental goals, fostering stakeholder trust and
resilience.

3. Competitive Advantage: Non-financial performance metrics can differentiate an

organization from its competitors. Factors like customer satisfaction, brand reputation,
and innovation can create a competitive advantage and enhance market positioning.

DISADVANTAGE OF NON-FINANCIAL PERFORMANCE MEASUREMENT:

1. Subjectivity: Non-financial metrics often involve subjective assessments and qualitative

measures that can be difficult to quantify and compare. This subjectivity may lead to
inconsistencies and difficulties in benchmarking and evaluation.

2. Lack of Standardization: Unlike financial metrics, which have established standards and
frameworks, non-financial performance measurement lacks standardization. This can
make it challenging to compare and interpret results across organizations or industries.

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 ADVANTAGE AND DISADVANTAGE OF FAMILY MART MALAYSIA:

ADVANTAGES:

1. Convenience: FamilyMart Malaysia offers convenience to customers through its

numerous outlets, extended operating hours, and a wide range of products available,
including ready-to-eat meals, snacks, beverages, and daily essentials.

2. .Strong Brand Recognition: FamilyMart is an established international brand with a strong

presence in many countries. Its brand recognition can attract customers and build trust
in the Malaysian market.

3. Strategic Partnerships: FamilyMart Malaysia has formed partnerships with local brands,
such as the popular local bakery, Bake With Yen. These partnerships allow FamilyMart
to offer unique products and enhance its appeal to customers.

DISADVANTAGES:

1. Intense Competition: The convenience store market in Malaysia is highly competitive,

with established players like 7-Eleven and MyNews Holdings dominating the market.
FamilyMart faces significant competition, which can pose challenges for market share
and profitability.

2. Pricing Pressure: As competition intensifies, pricing pressure may arise, leading to

potential margin squeezes for FamilyMart Malaysia. Balancing competitive pricing while
maintaining profitability can be a challenge.

3. Limited Market Penetration: Despite having a presence in Malaysia, FamilyMart's market

penetration may be limited compared to some of its competitors. Expanding its reach and
brand awareness across the country may require significant investments and efforts.

It's important to note that the advantages and disadvantages listed above are general
observations and may vary based on specific market conditions and individual
business strategies.

10
QUESTION 4

Collectively, some of the techniques we could employ to gather pertinent information to gauge
the indication of choice are Key Indicators, also referred to as KPIs, are a group of measurable
statistics used to assess the overall long-term success of an organisation. KPIs in particular aid
in determining a company's strategic, financial, and operational accomplishments, particularly
when compared to those of rival companies in the same industry. With the help of the process,
we can pinpoint the precise indications that are essential for assessing their performance and
accomplishing their goals. These metrics could be anything that is pertinent, such as increases
in sales, customer satisfaction ratings, employee productivity, etc. The next step is Establish the
Data Requirements, The establishment of data needs sets the method for identifying, prioritising,
accurately formulating, and validating the the data needed to achieve business objectives. Once
the KPIs are defined, we can determines the data requirements necessary to measure these
indicators effectively. This involves specifying the type of data, frequency of collection, and level
of detail needed to generate meaningful insights.
Next, customer surveys are a potential source of data that we could obtain. Surveys can
be used to get information directly from clients. These polls can be taken in a variety of ways,
including online. The other option is loyalty programmes, which we can use to reward customers
and compile information on their preferences and spending patterns. We can understand
consumer behaviour, visit frequency, and spending habits by examining the data from these
programmes.
By using suitable data gathering techniques, such as automated systems, structured
surveys, or data integration procedures, we can ensure the correctness and dependability of the
data. To gain valuable insights from the gathered data, they may also employ tools and
techniques for data analysis. We can obtain thorough and useful information to support their
decision-making processes, increase operational efficiency, and boost customer happiness by
utilising these potential sources of data and utilising a variety of data collection techniques.

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 CONCLUSION

In conclusion, my assignment on performance measurement has provided me with a deeper

understanding of the importance of tracking and evaluating performance in various contexts.
Through this assignment, I have learned valuable techniques and frameworks for measuring
performance effectively. I have gained insights into the significance of setting clear goals,
establishing key performance indicators, and analyzing data to assess progress and identify
areas for improvement. This assignment has not only enhanced my analytical and critical
thinking skills but also highlighted the role of performance measurement in driving success and
making informed decisions. Overall, this assignment has been a valuable learning experience
that will undoubtedly contribute to my future endeavors in performance management and
organizational success.
In this assignment each of our group member has a role and our own responsibilities.
For instance, Aniq has been given the task of defining the main goals to the performance of
measurement system should achieve, as well as three different benchmarking and ratio types
the company can use and how they can help the organization succeed. Affiq, on the other hand,
was given the assignment to distinguish between financial and non-financial performance
measurements, to discuss the benefits and drawbacks of each, and to cogently apply them to
the business of our choice, FamilyMart. Adib's task was to form a group, identify any procedures
for gathering information necessary to measure the indicator chosen, locate potential data
sources, and discuss the approaches that might be taken to do so.

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MEMBERS PROFILE

13
REFERENCES

1. “Annual Report.” Ql.listedcompany.com,

ql.listedcompany.com/misc/FlippingBook_PDF_Publisher/Publications/HTML/QL_202

1/index.html.

2. “FamilyMart - Wikipedia.” En.m.wikipedia.org, en.m.wikipedia.org/wiki/FamilyMart.

3. Kenton, Will. “Financial Performance: Definition, How It Works, and Example.”

Investopedia, 1 June 2022, www.investopedia.com/terms/f/financialperformance.asp.

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APPENDICES

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