Ratio Analysis as a Tool for Performance Appraisal in Nigeria Financial Market (A Case Study of First Bank Nig Plc )

 

TABLE OF CONTENT

TITLE PAGE                                                                       

CERTIFICATION                                                                 

DEDICATION                                                                      

ACKNOWLEDGEMENT                                                       

TABLE OF CONTENT                                                         

CHAPTER ONE      

INTRODUCTION                                                                 1

1.1        Background of the Study                                           1

1.2        Statement of the Problem                                           3

1.3        Justification of the problem                                       4

1.4        Scope of the Study                                                    5

1.5        Limitation of the Study                                              6

1.6        Research  hypothesis                                                 6

1.7        Plan of the Study                                                      7

1.8        Definition of the Study                                              8

 

CHAPTER TWO

2.1        Literature Review                                                      9

2.2        Users of Financial Statement                                     11     

2.3        Management of an Organization                       13     

2.4        Performance Evaluation                                             14

2.5        Management control System                                      15

2.6        Method of Performance Evaluation                             16

2.7        Analysis and Interpretation of

Financial Statement                                                                      16

2.8        Definition and Relevance of Financial Ratio                17

2.9        Classification of Ratio Analysis                                             17

 

CHAPTER THREE

3.0     Research Methodology                                                         23

3.1        Type of Data                                                                        23

3.2        Population and Sample Size                                                 24

3.3        Method of Data Collection                                                    24

3.4        Method of Data Analysis                                                      24

 

CHAPTER FOUR

DATA PRESENTATION AND ANALYSIS

4.0     Introduction                                                                       26

4.1        Socio-Dittographic Characteristic of Respondents       27

4.2        Presentation of Questionnaire Response                     30

4.3        Testing of Hypothesis                                                          33

4.4         Result and Analysis of Liquidity Ratios                      36

 

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATION

5.1        Summary                                                                                      37

5.2        Recommendation                                                                 37

5.3        Conclusion                                                                          39

BIBLIOGRAPHY                                                                   41

 

CHAPTER ONE

INTRODUCTION

1.1         BACKGROUND OF THE STUDY

The amount of proportion of one figure compare to another makes financial statement to be obviously important to enable user have a clear picture of position of organization. It report the liquidity and solvency of the company and the claim of it resources i.e. debt owned, the equity of the owner and present cash position of the company.

It comprises comparative balance sheet, profit and loss account, income statement, cash – flow statement, auditors report and some officer necessary information base on your assessment.

Despite the functions of financial statement many users often fail to comprehend fully on the information it intending to pass across, thus there desire are not met. This is due to ambiguous of the financial statement where by the volume of data figure mislead the user. In this sense, the need for analysis and interpretation of statement are imperative. Financial statement can be converted and interpreted using three techniques.

1.                Vertical or Static Analysis: It examine relationship within a statement, it deals with use of relative percentage value of the statement.

2.                Horizontal or Dynamic Analysis: This involves comparison of financial statement in respect of the two or more years. The weakness of this analysis in that comparison with the past does not afford any basis for evaluation in absolute terms.

3.                Ratio Analysis: Involve the use of two different economic units to ascertain performance. Ratio analysis commonly uses technique in analyzing financial statement. It is obviously paramount since it checks how strong or weak company is. Therefore, its interpretation is easily understood by the user.