Reference code: C094
ABSTRACT
Ratios are highly essential profit tools in financial analysis that helps financial analysts implement plans that improve profitability, liquidity, financial structure, reordering, leverage and interest coverage. Although ratios report mostly on past performances, they can predict too, and provide lead indications of potential problem areas. In this research work, relevance of accounting ratios and decision making in Nigeria manufacturing company ; a case study of Nigerian breweries plc. The researcher considered in chapter one, the introduction of the study which will in turn consider the following topics. The background of the study, the statement of problem, research questions, objectives of study, hypothesis, scope of study, significance of the study. The main objective of this study is therefore to evaluate the relevance of Accounting Ratios and Decision Making in Nigeria. Amongst the specific objective of this study was the determination of the effects of Relevance of Accounting Ratios and Decision Making In Nigeria Manufacturing companies. The study shows that Accounting ratio and Decision Making has helped to provide the knowledge of financial analysis techniques and interpretation of the available data for managerial purpose which makes it necessary for managers to rely strongly on Ratios for Decision Making. Chapter two focuses on the literature review; this chapter is where the researcher extracts materials from various books, magazines, newspapers and internet resources. In chapter three, the researcher deals on research methodology which consists of Research Design, population, sample and sample techniques, types and sources of data, instrument of data collection, validation and reliability of research instrument, data analysis technique and method of data presentation and analysis. The population of this study consists of the staff of the finance and account department of nig breweries plc. T test analysis was used to test the model formulated to support the hypothesis based on the study and that of the tested hypothesis while chapter four is data analysis and interpretation and based on the review and data analysis carried out it was said that financial ratio is a relevant tool in organization decision making, accounting ratio is significant in management decision making of firms, managers rely on ratios for their decision making and ratio analysis can be used to monitor profit trend and yearly performance of organization. Chapter five consists of summary of findings, conclusion and recommendation, and it was concluded that the current appropriate use of ratio analysis in Nigeria breweries has helped to highlighting areas where organizations are having problem as regards financial management.
BACKGROUND TO THE STUDY
............. In consequences, managers had to look for the means of discharging their stewardship responsibility; this can be obtained through the use of accounting ratios. The use of accounting ratios is a time-tested method of analyzing a business. Wall Street investment firms, bank loan officers and knowledgeable business owners use accounting ratio analysis to learn more about a company's current financial health as well as its potential (Vernmmen, 2006). Ratios analysis simplified, summarizes, and systematizes a long array of accounting figures. Its main contribution lies in bringing out the inter-relationship which exists between various segments of business. Ratios are more of a diagnostic tool that helps to identify problem areas and opportunities within a company.
1.2 Brief Historical Background of Nigerian Breweries Plc
Nigerian Breweries Plc, the pioneer and largest brewing company in Nigeria, was incorporated in 1946. In June 1949, the company recorded a landmark when the first bottle of STAR lager beer rolled off its Lagos Brewery bottling lines. This first brewery in Lagos has undergone several optimization processes and as at today boasts of the most modern brew house in the country ...................
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION1.1. Background to Study 1
1.2. Brief Historical Background 2
1.3. Statement of The Problem 3
1.4. Research Question 4
1.5. Objectives of the Study 4
1.6. Hypothesis 5
1.7. Scope of the Study 5
1.8. Significance of the Study 5
1.9. Organization of the Study 6
1.10. References 7
CHAPTER TWO: LITERATURE REVIEW
2.1. Financial Statement 8
2.2. Accounting Ratios and Decisions makings 12
2.2.1. Analyzing of Liquidity 12
2.2.2. Asset Equity Ratio or Leverage Ratios 14
2.2.3. Analyzing Sales and Profitability 14
2.2.4. Analyzing Efficiency 15
2.3. Classifications of Ratios 15
2.4. Uses/Users of Financial Ratios 16
2.5. Ratio Analysis 20
2.6. Usefulness of Financial Ratio 21
2.7. Financial Analysis 22
2.7.1 Types of Financial Analysis 24
2.7.1.1. Intra company Analysis 24
2.7.1.2. Inter Company Analysis 25
2.8. Importance of Financial Information 26
2.9. Classification of Ratios 26
2.9.1. Profitability Ratio 27
2.9.2. Liquidity Ratio 29
2.9.3. Leverage Ratio 31
2.9.4. Activity Ratio 33
2.10. Limitations of Ratios 38
2.10.1. Dealing with the problems 45
2.11. References 47
CHAPTER THREE: RESEARCH METHODOLOGY
Introduction 50
3.0. Research Design 50
3.1. population, Sample and Sample Technique 50
3.2. Types and sources of Data 50
3.3. Instruments of Data Collection 51
3.4. Validity and Reliability of Instruments 51
3.5. Data Analysis Techniques and Presentation 52
3.4. Method of Data Presentation and Analysis 52
3.5. References 54
CHAPTER FOUR: DATA PRESENTATION AND ANALYSIS
4.0. Introduction 55
4.1. Data Presentation and Analysis 55
4.1.1. Presentation and Analysis of Secondary Data collected 55
4.1.2. Presentation and Analysis of Primary Data Collected 57
4.1.2.1 Presentation and Analysis of Respondents Bio-Data 57
4.1.2.1 Presentation and Analysis of Data Related to the Study 63
4.2 Hypothesis Testing 68
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION AND RECOMMENDATION
5.1. Summary of Findings 71
5.2. Conclusion 73
5.3. Recommendation 74
BIBLIOGRAPHY 75
APPENDIX 79
Reference code: C094
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Reference code: C094
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