
ABSTRACT
This research work examines the
analysis and acceptability of financial ratios as a major tool to ascertain
performance, strength and limitations with popular reference to Nestle Nigeria
Plc and Cadbury Nigeria Plc portraying the significant ratio needed. The management of any organisation among other
tools concentrates more on comparative evaluation a bit to ensure proper
control and high level of performance efficiency of an organization’s this
effect, this study was undergone to evaluate company performance, strength and
limitations using financial ratios as a major tool.
analysis and acceptability of financial ratios as a major tool to ascertain
performance, strength and limitations with popular reference to Nestle Nigeria
Plc and Cadbury Nigeria Plc portraying the significant ratio needed. The management of any organisation among other
tools concentrates more on comparative evaluation a bit to ensure proper
control and high level of performance efficiency of an organization’s this
effect, this study was undergone to evaluate company performance, strength and
limitations using financial ratios as a major tool.
The efficiency of company’s
operations in recording, analyzing, summarizing and interpreting of the
financial statement to derive generalization and conclusion is a function of
ratio analysis.
operations in recording, analyzing, summarizing and interpreting of the
financial statement to derive generalization and conclusion is a function of
ratio analysis.
Some
literature used, helped in determining the concept of financial ratio as an
indication of performance evaluation classification of financial ratios, impact
of ratio analysis trend analysis, common seize analysis and also the strength
and limitation of financial ratio usage in organisations.
literature used, helped in determining the concept of financial ratio as an
indication of performance evaluation classification of financial ratios, impact
of ratio analysis trend analysis, common seize analysis and also the strength
and limitation of financial ratio usage in organisations.
The mode of research design and methodology was based on
primary and secondary data; the former which uses questionnaire as the means of
collection and chi –square (X2 ) for analyzing the
hypothesis to ascertain corrections and justification of the study.
primary and secondary data; the former which uses questionnaire as the means of
collection and chi –square (X2 ) for analyzing the
hypothesis to ascertain corrections and justification of the study.
The companies used are also based on their 2011 annual
report and accounts for quantitative results, though, financial ratio is not an
end but a means to an end, the findings indicates that financial ratio is a
significant weapon of decision marketing and a good yardstick for measuring the
performance of organisations.
report and accounts for quantitative results, though, financial ratio is not an
end but a means to an end, the findings indicates that financial ratio is a
significant weapon of decision marketing and a good yardstick for measuring the
performance of organisations.
TABLE OF CONTENTS
Title i
Certification ii
Dedication iii
Acknowledgements iv
Abstract vii
Table of Content ix
CHAPTER ONE
1.0 Introduction
1
1
1.1 Background
of Study 1
of Study 1
1.2 Objectives
of the Study 4
of the Study 4
1.3. Statement
of Research Hypothesis 5
of Research Hypothesis 5
1.4 Statement
of the Problem 5
of the Problem 5
1.5 Research
Questions 6
Questions 6
1.6 Scope
and Limitation of the Study 7
and Limitation of the Study 7
1.7 Significant
of the Study 9
of the Study 9
1.8 Organization
of the Study 9
of the Study 9
End Chapter References 11
CHAPTER TWO
2.0 Literature Review 12
2.1.1 Reasons for the Use of Ratios 15
2.1.2 Limitation
of Accounting Ratios 16
of Accounting Ratios 16
2.1.3 Ratio
Analysis Approaches 17
Analysis Approaches 17
2.1.4 Historical Background Of
Nestle Nigeria Plc 18
Nestle Nigeria Plc 18
2.1.5 Historical
Background Of Cadbury Nigeria Plc 20
Background Of Cadbury Nigeria Plc 20
2.2 Conceptual Explanations 22
2.2.1 Types of Financial Ratio
Activities 26
Activities 26
2.2.2 Liquidity Ratio 30
2.2.3 Long Term Solvency or Debt Ratio 33
2.2.4 Activity Ratio 35
2.2.5 Users of Financial Ratios 37
2.2.6 Objectives of Ratio Analysis
to Manufacturing Company 39
to Manufacturing Company 39
End
of Chapter References 66
of Chapter References 66
CHAPTER THREE
3.0 Research Methodology 68
3.1 Introduction
68
68
3.2 Method
of Data Collection 70
of Data Collection 70
3.3 Source
of Data Collection 70
of Data Collection 70
3.4 Method
of Analysis 71
of Analysis 71
3.5 Research
Instrument 71
Instrument 71
3.6 Description of the
Population And Sample of the Study 72
Population And Sample of the Study 72
3.7 Re
– Statement of Research Questions 73
– Statement of Research Questions 73
3.8 Restatement
of Research Hypothesis 74
of Research Hypothesis 74
3.9 Description
of Questionnaire 74
of Questionnaire 74
3.10 Method
of Data Analysis And Description of Tools of
of Data Analysis And Description of Tools of
Analysis 75
End
of Chapter References 77
of Chapter References 77
CHAPTER FOUR
4.0 Data
Analysis Interpretation And Discussion Or Findings 78
Analysis Interpretation And Discussion Or Findings 78
4.1 Interpretation
of Items 78
of Items 78
4.2 Analysis
of Data 79
of Data 79
4.3 Test
of Hypothesis 97
of Hypothesis 97
End
of Chapter References 103
of Chapter References 103
CHAPTER FIVE
5.0 Summary, Conclusion,
Recommendation and Suggestions
Recommendation and Suggestions
For Further Studies 104
5.1 Summary 104
5.2
Conclusion 105
Conclusion 105
5.3
Recommendations 107
Recommendations 107
5.4
Suggestions
For Further Studies 109
Suggestions
For Further Studies 109
Bibliography 110
Internet 111
Appendix
Questionnaire
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