THE CRITICAL EVALUATION OF THE USES F FINANCIAL RATIONS IN FINANCIAL STATEMENT ANALYSIS

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ABSTRACT

Financial ratios provide managers with insights into the existing strengths and weakness and equally disclose warning indicators of impending failures. Mangers primary objective now is to plan against the flows and improve for the future prospect of the enterprises.

There are many aids to intelligent analysis of statement but financial ratio is an important analytical procedure at the mangers disposal in the bid for planning financial ratios are wildly used as a basis for predication especially in the aspects of solvency determination and profitability evaluation. Above all, financial analysts want to assess future earning and dividend paying prospects.

If analysts are investigating senior securities they are concerned with the adequacy with which earning cover, interest payment and related annual cash requirement short-term creditors are less interested in long –run earning powers. Their concern is to know the urgent out look of smooth payment and earnings per-share seems to be the single number that get wide attention as a measure of company performance.

TABLE OF CONTENT

TITLE PAGEII

APPROVAL/CERTIFICATION III

DEDICATION IV

ACKNOWLEDGEMENT V

ABSTRACTVI

TABLE OF CONTENT VII

CHAPTER ONE

1.1BACKGROUND OF THE STUDY 1

1.2BRIEF HISTORY OF AFRIBANK NIG. PLC3

1.3STATEMENT OF THE PROBLEM5

1.4OBJECTIVE OF THE STUDY5

1.5RESEARCH QUESTION6

1.6RESEARCH HYPOTHESIS6

1.7SCOPE OF STUDY7

CHAPTER TWO

2.0REVIEW OF RELATED LITERATURE 8

2.1DIFFERENT TYPES OF FINANCIAL RATIOS9

2.2LIQUIDITY RATIOS9

2.3LEVERAGE RATIOS11

2.4ACTIVITIES RATIOS11

2.5 PROFITABILITY11

2.6MOTIVATIONS FOR USING RATION ANALYSIS13

2.7TECHNIQUES AND PROBLEMS IN RATIO ANALYSIS14

2.8SIGNIFICANT OF RATIO ANALYSIS15

2.9BASIC FINANCIAL STATEMENT18

2.10OBJECTIVES OF FINANCIAL STATEMENT ANALYSIS19

2.11BRIEF DESCRIPTION OF FINAL ACCOUNT 20

2.12DATA PRESENTATION AND ANALYSIS21

2.13QUESTIONNAIRE ADMINISTRATION 21

2.14TESTING OF HYPOTHESIS 22

CHAPTER THREE

3.0FINDINGS, RECOMMENDATION AND CONCLUSION 33

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THE CRITICAL EVALUATION OF THE USES F FINANCIAL RATIONS IN FINANCIAL STATEMENT ANALYSIS

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