Moon and Bates (1993) developed an approach of measuring the competitor performance. They came up with four main stages of analysis commonly referred to as the CORE analysis. CORE is an acronym name which refers to context, overview, ratios and evaluation. The strategic management accounting plays a very significant role in providing financial information about the main sources of gaining competitive advantage of a company. It involves two main aspects. The computation of the key internal financial ratios of the company is the first main issue. The second issue involves assessment of the external information that may pose a threat to the competitive capability of the firm. The breast cancer survival rate in United Kingdom lags behind than other countries in Europe .
The context analysis involves both internal and external performance. It involves analyzing the strategic objectives of the firm and the success critical factors. The Breakthrough Breast Cancer operates in an environment with high competition. The main competitor is Breast Cancer Research Centre. In addition, the cancer treatment centre operates in a very dynamic environment. This involves innovations and inventions in finding the perfect cure for the breast cancer. Since the establishment of the firm in 1991, the researchers have continuously been involved in discovering a treatment for breast cancer. The firm has discovered new clinical trials such as new drugs, a new treatment in the case where the disease is hereditary and ways of reducing the growth of the cancer cells. The main objective of Breakthrough is to improve the breast cancer survival rates in United Kingdom. Dedicated and competent staff helps to improve the performance of Breakthrough Breast Cancer Research Center.
The overview involves review of the financial performance of the firm using the published financial statements. The performance of Breakthrough Cancer Research Center has been declining. From the published financial statements, the net income declined from 2011. There was a loss in 2012 amounting to £1.224 million, compared to a gain in the previous year of £1.047 million. The net expenditure is attributable to the increase in the amount of total charitable expenditure in 2012 as compared to the previous financial period. The amount of the incoming resources also declined significantly in 2012. However, there was an increase in the amount of voluntary income from the stakeholders from £19.910million in 2011 to £14.010million in 2012. The cost of generating funds increased. The trends of the financial performance of Breakthrough Cancer firm are different from those observed in the financial statements of Breast Cancer Firm, its main competitor .
The statement of financial position of Breakthrough Cancer firm shows a decrease in the total assets of the firm in 2012. The total net assets in 2012 amounted to £16.779million compared to £18.224 million in 2011. This is due to the decrease in the total investments, both short term and long term investments.
In measuring the financial performance of Breakthrough Breast Cancer, financial ratios will be computed for the past two financial periods. The financial ratios will be compared with those of the Breast Cancer Campaign. The ratios are summarized in the following table. The liquidity ratios, profitability ratios and activity ratios for the competitor, Breast Cancer Campaign, will be used in the evaluation stage, in CORE analysis. The comparison of the ratios of both Breast Cancer Centers is done in the evaluation stage. The productivity ratios include the average settlement period for debtors, average turnover period and fixed assets turnover period. The summary of the ratios is shown in the following table.
The evaluation stage involves analyzing the financial performance of Breakthrough Breast Cancer and its main competitor, Breast Cancer Campaign, through comparison of the financial ratios. Breast Cancer Campaign was founded in 1988 with the aim of improving the breast cancer research in United Kingdom and Australia. The firm only finances the breast cancer research centers.
The activity ratios for Breakthrough Breast Cancer show an increasing trend. However, the average settlement period for debtors is increasing. The ratio shows efficiency with respect to both current and fixed assets. The efficiency ratio for Breast Cancer Campaign shows an increasing trend except the average inventory turnover period ratio. The firm is also efficient in utilization of assets to generate revenue. However, the efficiency ratios for Breakthrough Breast Cancer are more favorable than those of Breast Cancer Campaign. Hence, Breakthrough Breast Cancer is more efficient than Breast Cancer Campaign .
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