Financial Performance Management Analysis Using Balanced Scorecard

QUESTION 1 (30%):
Select an international organization (of your choice – company A) and identify its closest competitor (company B). Present the two organizations and the criteria used for the identification of the competitor. Use the ratio analysis technique to evaluate the financial performance of the two organizations; draw a comparative evaluation and critically discuss the findings. You need to access the annual financial statements of at least the last two years and provide details of the ratio calculations.

QUESTION 2 (30%):
With reference to relevant literature, critically evaluate Kaplan and Norton’s Balanced Scorecard as a Strategic Management System. Develop a proposed Balanced Scorecard to include critical success factors (CSF’s) for your selected organisation (company A).

QUESTION 3 (30%):
Provide a critical analysis of the benefits and challenges of adopting Integrated Reporting (IR) for your selected organization (company A). Use academic literature and refer to the International Integrated Reporting framework to support your discussion.

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Expert Answers on Above Financial Performance Analysis

Organisation selected for the purpose of analysis is Singapore Airlines and the competitor selected is Qantas airline.

Ratio analysis and comparative financial evaluation

Company and competitor identification: Singapore Airlines is the flagship carrier of Singapore and its major activities includes passenger air transport and cargo. The company is listed on Singapore Stock Exchange. The competitor selected is Qantas Airways which is the flag carrier of Australia. The core activities of the airline includes domestic and international passenger transportation and freight management. Qantas is listed in the Australian Stock Exchange.

Justification for the competitor selection: There are many factors that lead to the selection of Qantas for the purpose of analysis and this includes the same industry, operates across long haul Asia Pacific routes and it is on comparable scales with that of Singapore Airlines.
The financial data analysis indicates that Singapore Airlines has a revenue of SGD19.54 billion in 2024/25 and the company has a net profit of SGD2.78 billion. The return on equity is 17.4%, return on assets is 6.4% and price to book value ratio is 1.29. In respect to Qantas, its revenue was AUD23.82 billion in 2024/25, and the net profit was AUD1.605 billion. The calculation of ratio analysis indicates that the profitability performance as reflected by net profit margin indicates that Singapore Airlines has a net profit margin of 14.2% whereas Qantas Airlines has 6.7%. The return on equity is also significantly higher for Singapore Airlines compared to Qantas. This shows that Singapore Airlines is better in terms of performance compared to Qantas.

Kaplan & Norton Balanced Scorecard

The balancing scorecard is an important tool to analyse the financial performance using four important perspectives including financial, customer, internal process and learning and growth. This tool is highly effective as it links strategy to measurable objectives and integrates both the financial and non financial metrics. However it is criticized for insufficient consideration of ESG integration and digital transformation is not fully considered.

SIA Strategy and Vision: The vision of Singapore Airlines to become a premium global carrier providing world class service and operational excellence. Its strategic pillars are therefore based on service differentiation, operational efficiency, network expansion and sustainability leadership.

Proposed balanced scorecard for SIA

From the financial point of view, the objective is to improve return on equity, and maintain investment grade credit rating. The measures to analyse its financial performance includes net profit margin, free cash flow etc. From a customer perspective point of view, the objectives include premium customer satisfaction and achieving growth in low quality. The measures are market share in Asia Pacific and net promoter score. The objectives from an internal process perspective are to achieve operational efficiency and on time performance whereas the learning and growth perspective emphasizes on digital innovation and talent excellence.

Integrated reporting analysis

Integrated reporting tax into consideration the financial performance, ESG metrics, strategy, governance and future Outlook.
Benefits for Singapore Airlines: The benefits for Singapore Airlines is that IR allows for efficient management and evaluation with respect to carbon transition risk, long term value creation and achieving balance between stakeholders. However the challenges are in the form of measurement complexities, increased disclosure risk and higher cost of implementation.

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