THE ROLE OF ACCOUNTING RATIO ANALYSIS IN MEASURING FINANCIAL PERFORMANCE OF A FIRM AND AIDING INVESTMENT


THE ROLE OF ACCOUNTING RATIO ANALYSIS IN MEASURING FINANCIAL PERFORMANCE OF A FIRM AND AIDING INVESTMENT

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THE ROLE OF ACCOUNTING RATIO ANALYSIS IN MEASURING FINANCIAL PERFORMANCE OF A FIRM AND AIDING INVESTMENT

CHAPTER ONE

1.1 Background to The Study

The financial statement of the firm at the end of the annual year provides a more significant tool of analyzing information to facilitate in making useful business and investment decision. This can be achieved through the use of accounting ratio analysis. Accounting ratios facilitates the determination of the efficiency and profitability of a firm which is fundamental for investment decisions based on the firm’s financial reports. Accounting ratio facilitate the comparison of two aspects of a financial statement. Some example of accounting   ratios include the dividend ratio, gross margin ratio, debt-to-equity ratio, and operating margin ratio. The relevance of this ratio for investment decisions depends on the currency of the data in the financial statement. The statement used for accounting ratio analysis is the annual financial report of a firm which consists of   three financial statements: the balance sheet, income statement and cash flow statement. The analysis conducted in each of this statement provides the vital information required regarding the financial performance of the firm for making sound investment decisions. Analysts therefor depend on the use of   the financial statements to provide the data needed to update accounting ratios. According to Igben (1999:423), “Accounting {or financial} ratio consist of the fraction, proportion or percentage which compare the relationship between one variable item in a set financial statements with another item in the financial statements. Consequently, Accounting ratios are vital for the analysis and interpretation of financial statements”.
The research therefore seeks to investigate the role of accounting ratio analysis in measuring financial performance of a firm and aiding investment

 

 

 

 

 

 

 



1.2 Statement of the Problem

The need to determine the financial performance of the firm is crucial for making informed decisions concerning the further deployment of resources and investment decisions. This can only be done through accounting ratio analysis. Eventually this is not often an easy task to undertake as many investors and business owners lack the understanding and skill to perform accounting ratio analysis. Accounting ratios facilitates the determination of the efficiency and profitability of a firm which is fundamental for investment decisions based on the firm’s financial reports. Accounting ratio facilitate the comparison of two aspects of a financial statement. Some example of accounting   ratios include the dividend ratio, gross margin ratio, debt-to-equity ratio, and operating margin ratio. The relevance of this ratio for investment decisions depends on the currency of the data in the financial statement. The statement used for accounting ratio analysis is the annual financial report of a firm which consists of   three financial statements: the balance sheet, income statement and cash flow statement. The analysis conducted in each of this statement provides the vital information required regarding the financial performance of the firm for making sound investment decisions. Analysts therefor depend on the use of   the financial statements to provide the data needed to update accounting ratios. According to Igben (1999:423), “Accounting {or financial} ratio consist of the fraction, proportion or percentage which compare the relationship between one variable item in a set financial statements with another item in the financial statements. Consequently, Accounting ratios are vital for the analysis and interpretation of financial statements”.
Therefore, the problem confronting the research is the role of accounting ratio analysis in measuring financial performance of a firm and aiding investment

 

 

 

1.3 Objectives of the Study

1.     To determine the role of accounting ratio analysis in measuring financial performance of a firm and aiding investment.

2.     To examine the relevance of accounting ratio analysis in the determination of financial performance of a firm and investment decision.

THE ROLE OF ACCOUNTING RATIO ANALYSIS IN MEASURING FINANCIAL PERFORMANCE OF A FIRM AND AIDING INVESTMENT

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A Research proposal for the role of accounting ratio analysis in measuring financial performance of a firm and aiding investment:
A Review on the role of accounting ratio analysis in measuring financial performance of a firm and aiding investment, role, accounting, ratio project topics, researchcub.info, project topic, list of project topics, research project topics, journals, books, Academic writer.
The financial statement of the firm at the end of the annual year provides a more significant tool of analyzing information to facilitate in making useful business and investment decision. This can be achieved through the use of accounting ratio analysis. Accounting ratios facilitates the determination of the efficiency and profitability of a firm which is fundamental for investment decisions based on the firm’s financial reports. Accounting ratio facilitate the comparison of two aspects of a financial statement. Some example of accounting ratios include the dividend ratio, gross margin ratio, debt-to-equity ratio, and operating margin ratio. The relevance of this ratio for investment decisions depends on the currency of the data in the financial statement... accounting project topics

THE ROLE OF ACCOUNTING RATIO ANALYSIS IN MEASURING FINANCIAL PERFORMANCE OF A FIRM AND AIDING INVESTMENT

Project Information

  • CATEGORY : ACCOUNTING
  • TYPE : PROJECT MATERIAL
  • FORMAT : MICROSOFT WORD
  • ATTRIBUTE : Documentation Only
  • PAGES : 75 Pages
  • CHAPTERS : 1 - 5
  • PRICE : ₦ 3,000.00

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