PERFORMANCE MEASUREMENT SYSTEMS

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Introduction

This report tells about Suncorp Group. The first heading is about the overview of the company which discuss the overview of the company, its functions, and its history. Secondly, the report introduces the idea of the Balanced Scorecard model which is used in Management Accounting. Lastly, the balanced scorecard will be implemented on Suncorp Group.   

Suncorp Group Limited

Suncorp group limited is one of the financial services business which has the headquarter in Brisbane Australia. It’s involved in insurance, finance, and banking services. It is Australia’s one of the mid-size banks according to the combined value of commercial lending and deposits. Moreover, this known for having the largest general insurance in Australia. This company was founded when there was a merger of three companies, namely Suncorp, Metway Bank and Queensland industry development corporation, on First December 1996. During this merger, the Queensland government was the largest shareholder with a stake of 68%. Currently, this company employs over 13000 labor force and it has approximately 9 million customers in both Australia and New Zealand. The worth of this company is $96 billion according to the assets it holds, and it is the Top 50 ASX listed company (Anon., n.d). There is a history regarding Suncorp Group Limited like in 1902 Suncorp starts its operation as a Queensland’s agriculture bank by opening its first branch in the southwest of Queensland. The objective of agriculture banks was to provide loans for communities living in rural areas in order to cover the costs of agriculture activities. Its first general insurance service was started in 1916 with the name of state government insurance office. In 2007, Suncorp Group merged with the Promina group, which was also the general insurance company. Promina approved $8 billion for the merger and it was the largest merger between the financial services industry this century (Anon., 2007).

Return on investment

Suncorp Group is the financial services business, so it doesn’t invest in capital assets like plant and machinery. Actually, the Suncorp group invest in different trading and investment securities which include interest-bearing securities, certificate of deposits and other negotiable deposits, equity securities, and unit trust. Moreover, it lends loans to its customers which is its receivables so that is also part of its total assets as loans and advances. Loan and advances are the major part of total assets for Suncorp Group.  The other assets of Suncorp Group are cash and cash equivalent, receivables which are due from other banks, derivatives, premium outstanding, deferred reinsurance assets and acquisition costs, and intangible assets. The total assets value is $96,235 million and this is the value for a year-end June 30, 2019. The total profit for the year-end June 30, 2019, is $228 million (Anon., 2018-2019). So now the return on investments will be calculated and it is calculated when the return (or gains) from the investment or total assets is divided by the total investment or assets (Anon., n.d). In this case, total profit will be the return that arises from investments in total assets. The return on investment will be:

 (228/96,235) *100 = 0.24%

In order to check whether this return on investment is good for Suncorp Group so the ROI for the annual year 2018 will be calculated and it is as follows:

 (1041/99,333) *100 = 1.05%

The return on investment for the fiscal year 2018 is better than that of 2019. It means currently Suncorp Group couldn’t able to generate a better return on its investments. The reason for the decline in ROI is the decline in the net profit for the company. The rapid decline in net profit was due to the losses arises from discontinued operations where Suncorp Group suffers a major loss on disposal from the sale of assets in discontinued operations.

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