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.
