PERFORMANCE ANALYSIS

PERFORMANCE ANALYSIS 3

PERFORMANCEANALYSIS

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June8, 2014.

Part1 Assignment

Corecompetency of TimHortons Inc. (TSX: THI)-Coffee &amp Donut Restaurant

Topquality, fresh products value, great services and communityleadership has been the greatest core competencies of TimHortons Inc. (TSX: THI)-Coffee &amp Donut. Customers value efficientservices and product of higher value. As such, business thatmaximizes on quality products and efficient services get highcustomer returns. Business that adopt this strategy, have theopportunity to increase revenues, expand their client base andimprove their brand among clients. By offering fresh foods thatincorporates home style features and constant improvements quality oftheir products and services, Tim Hortons Inc has been able to growand expand its outlets since 1960s. Unlike other restaurants, TimHortons Inc. has succeeded by meeting the basic customer needsquality products, quick services and establishing chain outlets inprominent locations where clients are able to get services. Thechains greatest score is its legendary fresh coffee and tasty freshdoughnuts which are affordable on packed form so that guest can enjoythe tasting products at home. In order to enhance more customerservice, the restaurant chains offer 24 hour drive catering services.This competency has made the enterprise successful.

Part2 Assignment Strong Tie Ltd

Ratio Table

Performance Measure

2006

2007

2008

Industry Average

Liquidity

Current Ratio

1.9

1.3

1.7

4

Cash Ratio

0.15

0.07

0.03

5

Asset Management

Raw Materials Turnover in Days

29days

33days

33days

31 days

WIP Turnover in Days

6days

5days

3days

3 days

Finished Goods Turnover in Days

10days

12days

29days

51 days

A/R Turnover in Days

65days

55days

61days

63 days

A/P Turnover in Days

16 days

13 days

18 days

11 days

Cash Conversion Cycle

133days

120days

115 days

137 days

Fixed Assets Turnover

2.1

3.4

1.9

4.1

Total Asset Turnover

1.8

2.5

1.6

1.7

Long-term Debt Paying Ability

LT Debt to Total Capitalization

41%

43%

39%

35%

Cash Flow Coverage Ratio

0.56

0.61

0.2

2

Profitability

Gross Margin

34.5%

32%

29%

32%

Operating Profit Margin

13.4%

16%

12%

16%

Net Profit Margin

8%

7%

5.12%

10%

ROA

17.6%

11.4%

1.2%

17%

ROE

23%

17%

6%

28%