Business and Financial Analysis

Topics: Financial ratios, Gross profit margin, Profit margin Pages: 3 (748 words) Published: April 26, 2012

2.5.4 Benchmarking
Benchmarking is a performance measurement tool used in conjunction with improvement initiatives. It measures comparative operating performance of organisations and identifies the best practices (Czarnecki, 1999). The parameters typically measured are revenue, profit, cost, service quality, etc. Historical benchmarking, industrial/sector benchmarking, best-in-class benchmarking are three types of benchmarking that differ on the target for comparison (Johnson, Scholes and Whittington, 2008). Industrial benchmarking is used for this RAP in charpter3. By employing the benchmarking an organisation successfully evaluates its strategic capability against other organisations. Benchmarking can thus be regarded as a process that stimulates the improvement and change.

3.4 Benchmarking
Benchmarking is used as a way of understanding how CapitaLand’s strategic capability compares with City Developments Limited (CDL). The analysis provides the pros and cons of CapitaLand against CDL.

As one of Singapore’s property pioneers since 1963, CDL is a listed international property and hotel conglomerate in the fields of real estate, hotel facilities management and hospitality. CDL has more than 300 subsidiaries and associated companies under its wings. It also constitutes 5 companies listed on stock exchanges in New Zealand, Hong Kong, London and Philippines. The Group currently owns and manages a strong portfolio of residential, hotel and investment properties across Asia,Europe, North America and Oceania (City Developments Limited, 2011).

Table 17 –Financial Ratios Comparison between CapitaLand and CDL Source: CapitaLand, 2010b and City Developments Limited, 2010b Financial Year Ended 31st December 2010| CapitaLand| CDL| Revenue increased / (decrease)| 14.38%| (4.4%)|

Gross profit margin (GPM)| 37.73%| 52.9%|
Net Profit Margin (NPM)| 49.37%| 26.54%|
Return on Capital Employed (ROCE)| 8.59%| 9.10%|
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