Performance Measurement in Organizations: Evaluation of British Heart Foundation

Running head: PERFORMANCE MEASUREMENT IN ORGANIZATIONS
Performance Measurement in Organizations
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1PERFORMANCE MEASUREMENT IN ORGANIZATIONS
Question 1
Introduction
The non-profit companies is centered on attaining a special mission as well as balancing
cost efficiency with program efficiency that can facilitate in realizing the most suitable social
returns. “British Heart Foundation (BHF)” is positioned as a UK based charity whose vision is to
maintain a world within which people does not face pre-mature death or suffer from severe ear
disease (Altman, Iwanicz-Drozdowska, Laitinen and Suvas 2015). Without following traditional
profit earning conducts they compete for funding dollars and government grants that ensure they
attains resources to serve their community. The objective of this essay is to provide an evaluation
of the financial and non-financial performance of “British Heart Foundation (BHF)” through
analyzing the annual reports of the company of the recent years. Financial ratios will be
evaluated for analyzing the financial performance and the non-financial analysis of the company
sustainability of BHF will be analyzed through employing Key Performance Indicators (KPI’s)
(Alvarez 2015).
Discussion
Financial Performance
Growth Analysis
The BHF has attained increased growth in its income to £158.9m for the financial year of
2017 that is evidenced with the growth in legacy income. The income has indicated a positive
increase that is depicted through observing that total income for the company in the year 2016
was £156.6m (Block and Landgraf 2016). The company has also observed exceptional growth in

2PERFORMANCE MEASUREMENT IN ORGANIZATIONS
its business being a non-profitable organization that is signified as more than 724 shops all
through UL generated around £25.1 million as profit through gathering, sorting and selling more
than 65,000 tons of healthcare goods each year. BHF has expanded its healthcare operations
through supporting more than 3700 healthcare professionals caring for those suffering from heart
disease and circulatory health issues. Through attaining a steady business growth, this non-profit
organization is attaining ability to invest more than 102.7 million pounds within life-saving
medical research (Coluzzi, Ferrando and Martinez-Carrascal 2015). BHF also continued to offer
considerable breakthroughs that have facilitated the company in changing lives of people all
through the world. All the shops of BHF in UK attained more than 29.1 million pounds through
gathering and selling 66 ton of heart care goods. In addition, people visits in its online stores
have also increased through observing that more than 60 million people visited BHF that resulted
in 19 million sales and 160000 items sold through its online eBay store. Moreover, there has also
been more than 40% in the number of health care professionals that is supported by BHF
(Coluzzi and Martinez-Carrascal 2015). The total number of patient visits has gradually
increased that has facilitated the non-profit organization to expand its healthcare program that
can encourage people to join healthcare at work.
Financial Ratio Analysis
Profitability Ratios:-
Particulars
British Heart
Foundation
2016 2017
Gross margin 79.63% 83.07%

3PERFORMANCE MEASUREMENT IN ORGANIZATIONS
Net margin 4.60% -3.96%
Return on capital employed 2.12% -1.66%
The profitability ratios of BHF indicated that the gross margin of the company increased
in the year 2017 from the year 2016. This is because of the reason that the company is highly
profitable in selling its inventory or the merchandise (Gao, Dong, Ni and Fu 2016). Moreover,
the net margin and return on capital employed of the company is observed to get decreased over
the years from 2016 to 2017. This is because of the reason that the company is not able to sell
most of its assets in generating desirable revenue. A decreasing trend of net margin signifies that
an organization is not that effective in converting sales into real profit. The capital employed by
the company is getting less gradually to enhance its operating profit. It also signifies that the
dollar of profits is decreased for the overall capital employed (Hakoum et al. 2016).
Liquidity Ratios:-
Particulars British Heart Foundation
2016 2017
Current ratio -1.35 -1.37
Quick ratio -1.31 -1.33
The liquidity ratio analysis of BHF indicates that the current as well as the quick ratio of
the company is going to a decreasing trend from the year 2016 to year 2017. This is for the
reason that the company’s capability to pay all its short term debts is getting affected
(Henderson, Jarvis, Clayton, Pocock and Fox 2015). The decreased quick ratio of this non-profit
organization indicates that it is facing difficulties in selling inventory or prepaid assets in case
of an emergency. Moreover, a decreased current ratio of the company indicates that it is not that
efficient to pay all its sort term obligation. BHF is dealing with issues of getting paid on their