Strategic Decesion Making and the Importance of Financial and Non-Finacial Information
STRATEGIC DECESION MAKING AND THE IMPORTANCE OF FINANCIAL AND NON-FINACIAL INFORMATION
Contents
Executive Summary 1
1 Introduction to John Keells and its Leisure Business 2
1.1 Leisure Sector Financial profile for the financial year 2011/2012 4
1.2 Nonfinancial information 5
2 Literature Review 8
3 Financial Analysis and Strategic Decision Making Process 11
3.1 Strategic Decision making process and Analysis involved 11
3.2 The financial and non-financial analysis of JKH Leisure sector 12
4 Evaluation and Synthesis of Decision Making Process 16
5 Conclusions and Recommendations 18
6 Post Report Reflection 19
References 20
Annexures 21
Executive Summary John Keells Holdings PLC (JKH) is Sri Lanka’s largest listed conglomerate in terms of market capitalization. Company has been able to mark its presence in all major industry spheres it operates including Transportation, Leisure, Property, Consumer Foods & Retail, Financial Services and Information Technology, among others. The objective of this report is to critically discuss whether financial information is likely to give a better indication of the likely future success of the business than non financial information. The objective will be achieved through a detailed study starting from identifying the strategic planning, controlling and decision making process of JKH Leisure sector, managed through John Keells Hotels (Pvt) Limited and, analyzing the extent of the use of financial and nonfinancial indicators, tools and information within the process. The analysis will be supported by the published literature on the use of financial and nonfinancial information in decision making with related examples. Related data will be gathered from the company web site, annual reports and the internal sources. Upon completion of the analysis areas to be improved will be highlighted with appropriate recommendations. The whole process is
Contents
Executive Summary 1
1 Introduction to John Keells and its Leisure Business 2
1.1 Leisure Sector Financial profile for the financial year 2011/2012 4
1.2 Nonfinancial information 5
2 Literature Review 8
3 Financial Analysis and Strategic Decision Making Process 11
3.1 Strategic Decision making process and Analysis involved 11
3.2 The financial and non-financial analysis of JKH Leisure sector 12
4 Evaluation and Synthesis of Decision Making Process 16
5 Conclusions and Recommendations 18
6 Post Report Reflection 19
References 20
Annexures 21
Executive Summary John Keells Holdings PLC (JKH) is Sri Lanka’s largest listed conglomerate in terms of market capitalization. Company has been able to mark its presence in all major industry spheres it operates including Transportation, Leisure, Property, Consumer Foods & Retail, Financial Services and Information Technology, among others. The objective of this report is to critically discuss whether financial information is likely to give a better indication of the likely future success of the business than non financial information. The objective will be achieved through a detailed study starting from identifying the strategic planning, controlling and decision making process of JKH Leisure sector, managed through John Keells Hotels (Pvt) Limited and, analyzing the extent of the use of financial and nonfinancial indicators, tools and information within the process. The analysis will be supported by the published literature on the use of financial and nonfinancial information in decision making with related examples. Related data will be gathered from the company web site, annual reports and the internal sources. Upon completion of the analysis areas to be improved will be highlighted with appropriate recommendations. The whole process is
References: • Epstein, M.J., & Palepu, K.G. (1999). What financial analysts want. Strategic Finance, (April), 42-52. • Healy, P. M., & Palepu, K. G. (2001). Information asymmetry, corporate disclosure, and the capital markets: a review of the empirical disclosure literature. Journal of Accounting and Economics, 31 (1-3) (September), 405-440. • Healy, P. M., & Palepu, K. G. (2003). The Fall of Enron, Journal of Economics Perspectives, Volume 17, Number 2. (Spring 2003), pp. 3-26 • Litan, R • Ahn, H. (2001). Applying the Balanced Scorecard concept: An experience report. Long Range Planning, 34(4), 441-461. • Butler, A., Letza, S. R., & Neale, B. (1997). Linking the Balanced Scorecard to strategy. Long Range Planning, 30(2), 242-253. • Malmi, T. (2001). Balanced Scorecards in Finnish Companies: a research note. Management Accounting Research, 12(2), 207-220. • Drucker, Peter F., "The Practice of Management", 1954. ISBN 0-06-011095-3 • http://www.balancedscorecard.org