THE IMPACT OF FINANCIAL STATEMENT ANALYSIS ON PERFORMANCE IN THE BANKING INDUSTRY
CHAPTER ONE
INTRODUCTION
1.1    BACKGROUND OF THE STUDY
With the existence of so many banks and establishment of new ones into the banking industry, the banking environment is becoming more competitive and sophisticated as each bank in effort to better its service and bring new idea.
This has made a lot of bank to be very dynamic so as to capture the element of the changes in the environment in which they operates.
In performing analysis of financial statement, many users choose to apply the technique of ratio analysis. A ratio expressed in the term of another number to show the relationship in between the two numbers. It is useful in the overall operating efficiency and performance of the company.
The advantage of ratio analysis and its implications in the combination of numbers and its equalization of firms of different sizes of the same form at different point in time ratio are useful in performance evaluation.
It is in the light of the numerous benefit afforded by ratio analysis technique in providing simple explanation  of results that is the focus here is use in evaluating the corporate performance of the banking industry. In Nigeria by applying the technique of the ratio analysis, this analysis work is intended to highlight the usefulness of ratio analysis on performance evaluation in the banking industry by using Union Bank of Nigeria Plc sample case study.
1.2    STATEMENT OF PROBLEM
This study has the general problem finding out why banks analyzed their financial statement as a measure of performance evaluation.
This is evident from the limitation of investors and other users of accounting information therefore, the research question which the study hopes to seek answers to are:
1    why are ratios used in analyzing financial statement to determine performance?
2    Does profitability of the bank society determine by its assets bank?
3    How dependent is the gross earning of a bank on its assets employed?
1.3    OBJECTIVE OF THE STUDY
1    since the financial information of most companies, banks, industries, etc can only be reached through the financial statement contained in their annual report published for the sake of interested parties to the affairs statement as a basis of assessing performance.
2    A research of this nature shall always help in providing valuable guide in eliminating the problems associated with those in adequate method of performance evaluation decision
3    Based on this method are often risky and faulty because PRIMA FACIE the information necessary for an informed performance evaluation unless when properly analyzed.
In nutshell, the objective of the study includes the following.
1    To examine the use of ratio analysis with emphasis on profitability, liquidity, leverage and activity ratio as tools for performance evaluations.
2    To suggest criteria through ratio analysis that summarizes the performance of an organization at the bank.
3    To establish a relationship between assets employed and givers earning.
1.4    RESEARCH QUESTION
This research work as some relevant question about the work union bank service, efficient and the consequent to their performance on Ughelli community such as;
1    why is the union bank established where when there are other commercial bank branches in various part of Ughelli community?
2    How is their operation compatible with other financial houses?
3    Is there any co-operate policies oriented?
4    Is the community aware of the existence of these has union bank in various part of the Ughelli community?
5    To what extent has union bank contributed to the economic development of the Ughelli community?
    How Ughelli are management team are, and their nature of control in practice what are the impact of union bank on depressed community.
6    How does it cope with competition from other financial institution and political in 1993 date?
7    What are the financial bases of the union bank in respect to the service render?
8    Is there any motivation or encouragement for public in using of patronizing the bank?
1.5    SIGNIFICANCE OF THE STUDY
One cannot predict the Nigeria economy or business environment in recent times because of the galloping nature of inflation in the country.
Having regard to this investor (Both foreign and local) are apparently teaching to commit their resources to business ventures review. The survival and growth of banks therefore is of great interest to the government, shareholders, bank promoters, potential investors and public. These interest efficiency, profitability and be socially conscious about banking standards in the economy.
This project work would be useful in the following are stated below.
1    Assist managers to implore on the use of the available order to achieve overall operational efficiency and performance.
2    Enable private individual on resources and obligations helping the person to assess his or her financial condition and plan its financial affairs (Rossen Field, 1981).
3    Enable actual potential suppliers as to whether they are likely to stay in business long enough to pay the habitations successfully.
4    Enable management diagnostics purpose with different managers and predicting bankruptcy has changed overtime.
5    Aid customers, particularly rent of banks in assessing the ability of an organization to meeting up with their demands and obligations likely by evaluating the liquidity and current financial position or organization.
1.6    SCOPE OF THE STUDY
This research study because attention on the financial figures reported  and accounts for union bank of Nigeria plc ratios shall be used to analyzed the annual report and accounts for 2003 and 2004 for analyzing their performance.
1.7    LIMITATION OF THE STUDY
1    Equity Fund: Method fined which invest primarily in stocks, usually common stock.
2    Gross Earning: An individual taxable income before any appropriate adjustment.
3    Loans and Advances: Funds given out by the bank to business owners, individuals to be payable at agreed time and terms.
4    Statutory Reserve: This refers, to the reserve to be maintained by all licensed bank under section 16 of the bank and other financial institution decree (BOFID).
5    General Reserve: Application of retarded earning for general purpose rather than for a specific item of future loss or experiences in fact it is a reserve for unspecified possible events.
6    Liquid Assets: Cash checks and easily convertible securities available to meet immediate and emergency needs.
7    Total assets: The sum of current and longer term assets owned by a person company or other entity.
8    Shareholders Funds: Is the amount of capital supplied by the owners to the firm.
9    Capital Employed: it is the tangible asset of the business at the pre-inflation values current liabilities.
10    Debenture / Bank Stock: Stock issued by bank for purpose of raising long term finds usually with pre-determined maturity dates, if redeemable.
11    Five Years Financial Summary: This is a summary of balance sheet and profit and loss accountancy items for a period of five years as required by law.
12    Retained Profit Loss: This is the accumulated balance on the profit and loss account after appropriation.
13    Going Concern: This is an axon that a firm will operate in perpetually.
14    Ratio: Is simply one number to show the relationship between the two numbers.
15    Current Ratio: This is the ratio of current assets to current liabilities.
16    Liquidity Quick Acid Test Rest: This is the ratio of current assets, loss stock to current liabilities.
17    Earning Field: This is the ratio of earning per share to the market value of the share.
18    Dividend Field: This is the ratio of dividend per share to market value of the share.