Ratio Analysis: Tools for Performance Evaluation in Companies
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TABLE OF CONTENT
TITLE PAGE i
CERTIFICATION ii
DEDICATION iii
ACKNOWLEDGEMENT iv
ABSTRACT v
CHAPTER ONE INTRODUCTION
1.1 BACKGROUND OF THE STUDY 1
1.2 STATEMENT OF THE STUDY 2
1.3 OBJECTIVE OF THE STUDY 3
1.4 RESEARCH QUESTIONS 3
1.5 HYPOTHESIS OF THE STUDY 4
1.6 SIGNIFICANCE OF THE STUDY 5
1.7 SCOPE OF THE STUDY 5
1.8 HISTORICAL BACKGROUND OF THE STUDY 6
1.9 DEFINITION OF TERMS 6
CHAPTER TWO LITERATURE REVIEW
2.0 INTRODUCTION 7
2.1 CONCEPTUAL FRAMEWORK 7
2.1.2 DEFINITION OF RATIO ANALYSIS 7
2.1.3 SIGNIFICANT OF FINANCIAL RATIOS 8
2.1.4 TYPES AND CLASSIFICATION OF FINANCIAL RATIOS 10
2.1.5 PROFITABILITY RATIOS 11
2.2 THEORETICAL FRAMEWORK 16
2.2.2 LIMITATIONS OF RATIO ANALYSIS 18
2.2.3 ADVANTAGES AND DISADVANTAGE OF RATION ANALYSIS
2.2.4 FINANCIAL STATEMENT 20
CHAPTER THREE
3.0 RESEARCH METHODOLOGY 28
3.1 POPULATION SIZE 28
3.2 METHOD OF DATA COLLECTION 29
3.3 SAMPLING AND SAMPLING PROCEDURE 30
3.4 DATA COLLECTIONS INSTRUMENT 31
3.5 PROCEDURE FOR DATA ANALYSIS 31
CHAPTER FOUR
4.0 DATA ANALYSIS AND PRESENTATION OF RESULT 32
4.1 INTRODUCTION 32
4.2 PRESENTATION OF DATA 32
4.3 ANALYSIS OF RESPONSE 33
4.4 HYPOTHESIS TESTING 36
CHAPTER FIVE
5.0 SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 SUMMARY 42
5.2 CONCLUSION 42
5.3 RECOMMENDATION 44
REFERENCES 46
QUESTIONNAIRE 47
INTRODUCTION
Financial analysis has become paramount importance in today’s changing business environment. The world has witnessed a dramatic evolution from the archaic trade by barter to the modern complex structure of business and companies.
Every organization, whether public or private prepares financial statements. The information contained in these statements is used to form judgment about the operating performance and financial position of the firm.
The stakeholders in a business-concern will be interested in knowing how well the company’s management team has utilized the company’s assets.
To obtain answers to this and many more questions, users of financial statements must properly analyze the information provided by these statements in order to have better insight into the strength and weakness of the firm for the purpose of making effective business decision.
For effective decision-making, the information presented in the financial statements must be devoid of errors or material mis-statements.
Since the early 90’s, the accounting profession has exporting. Accounting standards were criticized because they were prepared without reference to an acceptable theoretical framework.
REFERENCES
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Aburime, T.U. “Company-Level Determinants of Bank Profitability in Nigeria.” Lagos Journal of Banking, Finance & Economic Issues, (2008), 2(1). Adeniji A. A. (2004); An Insight into Management Accounting, Lagos, Value Chain Analysis Consult.
Afolabi, J.A. and Oluyemi, S.A. “An Assessment of the Impact of Inflation on Financial Intermediation in the Nigerian Banking Sector”. NDIC Quarterly, (1995).
Akintoye, I R (2004): Financial Management: Concepts, Analysis and Management, Lagos, Value Chain Analysis A1-Hashimi, A. “Determinants of Bank Spreads in Sub-Saharan Africa,’ draft, (2007).
Altman, E.I (1968), Financial Ratios Discriminant. Analysis and the prediction o Corporate Bankruptcy Journal of Finance.
American Economic Review, 4(21), (1998). Rose, J.T. And Rose, P.S.”The Burden of Federal Reserve System Membership, Journal of Banking and Finance 16, (1979).Tsiko, S. “Africa: Two Zim Commercial Banks Ranked among Africa’s Top 100,” (2006).
