INTRODUCTION
Ratio has been most important tools for the effective development of manufacturing companies and industries, the major uses of ratio is to access the profitability, gearing, liquidity and asset turnover of the company. The introduction of ratio analysis in manufacturing company has brought about a turn around in many industry and companies.
The important of ratio analysis in the running of any manufacturing cannot be over emphasizes, it is this significant role that led to the believe. That ratio is the life blood of every manufacturing companies and industries.
TABLE OF CONTENT
INTRODUCTION
1.0INTRODUCTION
1.1BACKGROUND TO THE STUDY
1.2STATEMENT OF THE PROBLEM
1.3OBJECTIVE OF THE STUDY
1.4RESEARCH HYPOTHESIS
1.5SIGNIFICANCE OF THE STUDY
1.6SCOPE OF THE STUDY
1.7HISTORICAL BACKGROUND OF THE CASE STUDY
1.8DEFINITION OF KEY TERMS
CHAPTER TWO
LITERATURE REVIEW
2.1HISTORICAL DEVELOPMENT OF RATIO ANALYSIS
2.2INTERPRETATION OF ACCOUNTING RATIOS
2.3THE CONCEPT OF FINANCIAL RATIO ANALYSIS
2.4THE FINANCIAL STATEMENT
2.4.1THE INCOME STATEMENT
2.4.2THE BALANCE SHEET
2.5ANALYSIS OF FINANCAL STATEMENT
2.5.1TYPES OF FINANCIAL STATEMENT
2.5.2PROCEDURE IN FINANCIAL ANALYSIS
2.6THE ROLE OF COMPARISON IN FINANCIAL ANALYSIS
2.6.1STANDARD FOR COMPARISON
2.7PARTIES INTERESTED IN THE FINANCIAL RATIOS
2.8USES OF FINANCIAL RATIOS
2.9CLASSIFICATION OF RATIO
2.9.1LIQUIDITY AND SOLVENCY
2.9.2ACID TEST (OR QIUCK) RATIO
2.9.3PROFITABILITY
2.9.4GEARING/LEVERAGE
2.9.4.1GEARING RATIO
2.9.5EFFICIENCY
2.9.5.1ASSET TURNOVER
2.9.5.2 STOCK TURNOVER
2.9.6INVESTMENT
2.9.6.1 DIVIDEND PER SHARE
2.9.6.2DIVIDEND PAYOUT RATIO
2.9.6.3DIVIDEND YIELD RATIO
2.9.6.4EARNING PER SHARES
2.9.6.5OPERATING CASH FLOW PER SHARE
2.9.6.6PRICE EARNING RATIO (PIE RATIO)
2.10LIMITATION OF RATIO ANALYSIS
CHAPTER THREE
RESEARCH METHODOLOGY
3.0INTRODUCTION
3.1RESEARCH METHOD
3.2POPULATION OF THE STUDY
3.3SAMPLE TECHNIQUE
3.4METHOD OF DATA COLLECTION
3.4.1 OBSERVATION
3.4.2 PERSONAL INTERVIEWS
3.5METHOD OF DATA ANALYSIS
CHAPTER FOUR
ANALYSIS AND INTERPRETATION OF DATA
4.0INTRODUCTION
4.1PRESENTATIONS AND ANALYSIS OF DATA
4.2LIQUIDITY
4.2.1CURRENT RATIO
4.2.2ACID TEST RATIO
4.3PROFITABILITY
4.3.1NET PROFIT MARGIN
4.3.2GROSS PROFIT MARGIN
4.3.3RETURN ON OWNER’S EQUITY
4.3.4RETURN ON CAPITAL EMPLOYED (ROCE)
4.4GEARING/LEVERAGE
4.4.1GEARING RATIO
4.4.2INTEREST COVER RATIO
4.5EFFICIENCY
4.5.1AVERAGE STOCK TURNOVER PERIOD
4.5.2STOCK TURNOVER
4.5.3ASSET TURNOVER RATIO
4.5.4SALES PER EMPLOYER
4.6INVESTMENT
4.6.1DIVIDEND PER SHARE
4.6.2DIVIDEND PAYOUT RATIO
4.6.3DIVIDEND YIELD RATIO
4.6.5OPERATING CASH FLOW PER SHARE
4.6.4EARNINGS PER SHARE
4.6.6PRICE EARNING RATIO
4.2INTERPRETATION OF RESULTS
CHAPTER FIVE
SUMMARY OF FINDING, CONCLUSION AND RECOMMENDATIONS.
5.0INTRODUCTION
5.1SUMMARY
5.2CONCLUSION
5.3RECOMMENDATION
5.3.1 LIQUIDITY
5.3.2 PROFITABILITY
5.3.3 GEARING/LEVERAGE
5.3.4GENERAL RECOMMENDATION
5.4LIMITATION OF STUDY
REFERENCE
APPENDIX I
APPENDIX
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