BACKGROUND OF THE STUDY
Change and organizational implication of change are very much in minds of modern/managers. And managers as become increasingly aware of the need and for a better information technique and process to cope with risk and uncertainties that are the future of change. management assignments of the likely, impact of constantly concurring economic social and technological change necessitate the need to carryout vigorous process of anticipating change, plotting it course and shaping the change for intended organization purpose, this is done through designing of strategies and plans to cope with aid of strategies and plans to cope with the problem and opportunities obtained from proper analysis of financial data.
Financial analysis involves the use of financial statement such as balance sheet, which gives a numerical view of the assets and liabilities of a firm at a particular time and income statement well known as profit and loss of the firm for particular period.
Financial analysis is the process of identifying the financial strengths and weakness of a firm as property confirming relationship between items of the balance sheet and profit and loss.[PANDEY 1979].
Financial statement are also the instrument of a business enterprises, it constitute a report on a management performance affecting to managerial success or failure and indicating warning signal of impending difficulties. To interpret data appearing in financial statement. One most understand the inner working of the accounting system and significance of various relationship.
The analysis and interpretation of financial statement endeavor to provide information in respect to organization to which the respect are prepared this analysis can be undertaken to aid management decision making process and planning [viscous 1987] page 1.
Apart from the management who make the use of financial statement interpretation and analysis, it may also be at a great interest to others to other user of financial statement in the society this group can be classified as internal users and external users. They are: -
a.Share holders [owners of company]
f.Government [for tax purpose by inland revenue department].
g.Financial journalist [ harns and hazard 1994].
More so each party concerned have divergent reasons for their interest in financial statement analysis and it must follow a given principles and rules of the accounting standards. This will allow a full appreciation of facts revealed by the accounts
Analysis and interpretation of financial statement of the an organization can be carried out through the use of.
Ratio analysis is at of the tools used when making financial analysis, they are yardsticks to evaluate the firms’ financial condition and performance and it deals with relating two financial data to each other.
Ratio are used to greater extent by the higher cadre of management who are responsible for maximizing profit and making strategic plan for the survival and growth of the company, it may be use to assets the efficiency of the management and in achievement of either organization within the same industry.
Fund flow statement is also used in analyzing the performance of the business organization by comparing the balance sheet as two different data and to relate change that occur in the financial structure to profit and loss made in the period under consideration.
This is useful in making strategies plans because of the information revealed about the business organization activities and policy’s
TABLE OF CONTENTS
TITLE PAGE II
TABLE OF CONTENTSVII
1.1 BACK GROUND OF THE STUDY1
1.2STATEMENT OF THE PROBLEM4
1.3PURPOSE OF THE STUDY 5
2.1OBJECTIVE AND USES OF
2.2RATIO ANALYSIS TECHNIQUES9
3.0SUMMARY OF FINDINGS, CONCLUSION OF RECOMMENDATION19
3.1SUMMARY OF FINDINGS 19
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