Finanancial Analysis and Performance and Position of A Firm

COVER PAGE

DECLARATION ............................................................................................................................ .!

STATEMENT OF APPROVAL. ..................................................................................................... II

TABLE OF CONTENT. ..................................................................................... III

ACKNOWLEDGEMENT ................................................................................... VII

DEDICATION ................................................................................................. VIII

ACRONYMS .................................................................................................................................. IX

LIST OF TABLES ............................................................................................ X

LIST OF FIGURES ............................................................................................. XI

ABSTRACT .................................................................................................... XII

CHAPTER ONE

INTRODUCTION

1.0 Introduction ...................................................................................... 1

1.1 Backgrotmd of the topic ....................................................................... 1

1.2 History and background of Uchumi Supermarket Ltd ............................... 2

1.3 Statement of the problem ...................................................................... 3

1.3 Purpose of the study ............................................................................ 3

1.4 Research objectives ............................................................................ .3

1.5 Research questions .............................................................................. 4

III

1.6 Research hypothesis ............................................................................. 4

1.7 Scope of the study ............................................................................... 4

1.8 Significance of the study ....................................................................... 5

CHAPTER TWO

LITERATURE REVIEW

2.0 Introduction ...................................................................................... 7

2.1 Financial statements ........................................................................... 8

2.2 Ratio Analysis ................................................................................... 12

2.3 Classification of Ratios ......................................................................... 13

2.4 Analysis of ratios ............................................................................... 22

2.6 Summary .......................................................................................... 27

CHAPTER THREE

RESEARCH METHODOLOGY

3.0 Introduction ...................................................................................... 28

3.1Design and location of the study ............................................................ 28

3.2 Study population ............................................................................... 28

3.3 Sampling design ................................................................................ 29

3.4 Types of data .................................................................................... 29

IV

3.5Datacollectionmethods ........................................................................ .30

3.6Analysisand interpretation of data ........................................................ 31

3.7 Limitation of the study ...................................................................... .31

CHAPTER FOUR

DATA ANALYSIS PRESENTATION

4.0 Discussions .......................................................................................... 32

4.1 Data Analysis and Presentation ................................................................... 33

4.2 Presentation of Financial Statements ofUchumi ................................................. 33

4.3 Department charged with Financial Statement Analysis ...................................... 34

4.4 Relevance of Ratio Analysis ................................................................................. 34

4.5 Uchumi' s financial performance in relation to liquidity, gearing, profitability,

and growth and efficiency ratios ....................................................................................... 52

CHAPTER FIVE

CONCLUSION AND RECOMMENDATION

5.0 Introduction .......................................................................................... 53

5.1 Discussions ..................................................................................................... 53

5.2 Conclusions ........................................................................................... 54

5.3 Recommendations ................................................................................... 57

Bibliography .......................................................................................... 58

Appendix 1 : Questionnaire ........................................................................... i

v

Appendix 2: Time Plan ............................................................................... v

Appendix 3: Budget ................................................................................... vi

VI

1.0 Introduction

Globalization and integration of the world's economy has increased complexity and competition, the critical task for the managers is to match or surpass the competition both nationally and globally, as well as managing profitability through better financial performance In many real life situations managers have little time to weigh their business funds sources options and mostly make snap decision based on minimal information, perceptions, past experiences and instincts. In other cases, such as sale of shares, retained earnings, loans from non-banking financial institutions, managers will need to invest time, skills and effort before making a particular choice that could have a major impact on the company's performance and position. Although many organizations attribute their performance to sales, financial statement reports, surveys have indicated that few organizations have institutionalized the tools for analyzing financial and position of the firm.