Full Project-ANALYSIS OF FINANCIAL RATIOS AS AN AID TO ECONOMIC ANALYSIS
Management should be particularly interested in knowing the financial strengths of the firm to make their best use and to be able to spot out the financial weakness of the firm to take suitable corrective actions. Thus, Economic analysis is the starting point for making plans, before using any sophisticated forecasting and budgeting procedures. The strength and weakness of the firm need to be understood, so that the firm will be at equilibrium through the use of the strengths. To proper advantage and taking corrective actions against any weakness observed or reigned. Although, emphasis is focused on outsider users such as creditors and owners, management is aware that their performance will be received by these external parties and for other reasons. For example the basic financial statements are used to assess the effectiveness of management in planning and controlling operations as well as for decision-making. Management also recognizes that the evaluation of past operation as revealed by the analysis of the basic statements, represent a good starting point in future operations and serves as an important means of assessing past performance, and in forecasting and planning future performance.
Published financial statements are properly oriented towards the long – term earning power. Short-term creditors such as major suppliers or banks are usually more interested in the short-term ability of corporations to satisfy its obligations as they fall due. As regards to union Banks, they use mostly financial ratios to obtain clue as to future performance. This project has been embarked on mainly to give a general idea on how to make use of financial ratios aids in economic analysis. It also hopes to point out certain deficiencies associated with it and the view pints of different people working with union bank of Nigeria PLC Enugu.
In so doing, this project has been divided into different chapters, each discussing vital point or aspects. The first chapter centers mainly on the purpose of the study, its objectives, significance and limitations associated with it. It will help to highlight problems relating to the ratios and it’s use. The next chapter is just a simple discussion on the financial ratios. It is the literature review of this project. It tells us what different authors have said on in relation to this topic and also their points of view on the topic. Chapter three is a belief narration on how the research of this project has been carried out, the difficulties encountered and the type of facts and sampling, I here based this project on. The last two chapters on the other hand is pre – detailed analyzed here are datas gotten from union bank of Nigeria PLC, Enugu. From this, I was able to draw some conclusion and deduced facts which have all been summarize in the last chapter. Various means have embarked on to make this project possible.
1.2 STATEMENT OF PROBLEM
The importance of financial ratios can never be over – emphasized. An efficient use of financial ratios goes a long way in carrying out this function. This fact not withstanding, I find out a lot of people in the banking sector are not even aware of financial ratios. Its functions and how it can aid the analysis and decision of the economy. In an under – developed economy like ours, the need for this ratios is paramount if the economy is expected to be improved upon. Another problem associate with the use of ratios is that ratios do not have much use if they are not analyzed over years. The ratios at a moment may suffer from temporary changes. This problem can be resolved by analyzing the trend of ratios over years. This is a major problem or set back in the economy. It is obvious that utilization of the financial rations is at stake and if nothing is done now. It could gradually be eroded.
1.3 OBJECTIVE OF STUDY
The objectives of this project is to present a through study of the financial ratios and to throw more light on its importance in the business world. Also to show how financial ratios and statement guide the long term investor by providing them with long term earning power of the firm. Again to show how creditors to form depends on financial ratios to know the liquidity margin of the firm.
1.4 RESEARCH QUESTIONS
This question will act as a guide for data collection.
· Can financial ratios be used to analyze the economy?
· How often do individual and firms use ratios as guide to economic decisions?
· What are the significance of financial ratios
· What are the limitations of financial ratios
· What are the solutions to these limitation.
1.5 RESEARCH HYPOTHESIS
This project will produce to test the following hypothesis.
Financial ratios are not widely used as guide to investment decision due to ignorance especially to individuals.
1. Poor knowledge of application of ratios by bank staff.
2. Confidence in the use of ratios in future.
1.6 SIGNIFICANCE OF THE STUDY
This study is useful to bankers and other firms in decision-making. It also helps them take corrective measures where there is deficiency or weakness. Bankers use proper ratio analysis before they grant any short or long term loan. Investors and creditors also benefit from this study since the subject matter of this study gives them the general picture of the firm. They are dealing with and also the capacity of the firm to met its obligations.
With the help of ratios we can determine:
· The ability of the firm to meet its current obligations
· The extent to which the firm has used its long term solvency by borrowing funds. · The efficiency with which the firm utilizes its various assets in generating sales revenue and
· The overall operating efficiency and performance of the firm.
1.7 LIMITATIONS OR SCOPE OF STUDY
This project centers on financial ratios. A very through research on this study is not very possible in that interviews and questionnaires have to be limited since only little sector of the population utilize the ratio.
Time factor is also another notable factor. Nobody seems to have time to even fill use questionnaire due to pressing engagement. Also, combining this project with my other academic work has been very and at times interviews has been put off due to the work load I have and the time available to do it.
Another important factor also arises during the collection of data. You find out that people are not ready to talk on any issue in which bank is involved. They tend to fed that any information given will implicate them in some ways. So most individuals try as much as possible to give a rosy picture of the entire producers even though things do not happen that way.
1.8 DEFINITION OF TERMS
For complete understanding of this project, these terms have been defined.
Ratio – The indicated quotient two / Mathematical expression
Financial ratio – The relationship between two Accounting figures expressed Mathematical.
Economic analysis – identifying the economic Strengths and weaknesses of the Firm.
Liquidity ratios – ability to meet current obligation
Activity ratios – the firms efficiency in utilizing its Assets.
Leverage ratio – The proportions of debt and equity in financing the firm’s assets.
Profitability ratio – The measurement of the overall performance and effectiveness of the Firm.
Get the Complete Project
This is a premium project material and the complete research project plus questionnaires and references can be gotten at an affordable rate of N3,000 for Nigerian clients and $8 for International clients.
You can also check other Research Project here:
- Adult Education
- Agricultural Science
- Banking & Finance
- Biblical Theology & CRS
- Biblical Theology and CRS
- Biology Education
- Business Administration
- Computer Engineering Project
- Computer Science 2
- Criminology Research Project
- Early Childhood Education
- Economic Education
- Education Research Project
- Educational Administration and Planning Research Project
- English Education
- Environmental Sciences Research Project
- Guidance and Counselling Research Project
- History Education
- Human Kinetics and Health Education
- Maritime and Transportation
- Marketing Research Project 2
- Mass Communication
- Mathematics Education
- Medical Biochemistry Project
- Organizational Behaviour
- Other Projects
- Political Science
- Public Administration
- Public Health Research Project
- More Research Project
- Transportation Management
Need a Project Writer for a Different Topic
- MSC PROJECT WRITING SERVICES
- MBA RESEARCH PROJECT WRITING SERVICES
- Research Project Writing Services in Lagos Nigeria (Professional Writers) -Law, MSc, MBA,PhD, Dissertations, Thesis, Assignment, Speech
- Masters Research Project Writer in Lagos Nigeria
- MBA Research Project Writer in Lagos Nigeria
- LOOKING FOR A WRITING SERVICES FOR AN URGENT ASSIGNMENTS OR PROJECT WORK
- PROFESSIONAL WRITING SERVICES IN LAGOS NIGERIA (TERM PAPER, SPEECH WRITING, ASSIGNMENT, THESES, DISSERTATIONS, RESEARCH PROPOSAL, PROJECT WRITING SERVICES etc)
- BUSINESS ADMINISTRATION RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- CONSULT A RESEARCH PROJECT WRITER IN LAGOS NIGERIA (PH.D, MBA, MSC, M.ED, BSC)
- MANAGEMENT RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- Education Research Project Writer in Lagos Nigeria
- Environmental Sciences Research Project Writer in Lagos Nigeria
- Guidance and Counselling Research Project Writer in Lagos Nigeria
- Human Kinetics and Health Education Project Writer in Lagos Nigeria
- Early Childhood Education Research Project Writer in Lagos Nigeria
- Christian Religious Studies(CRS) Research Project Writer in Lagos Nigeria
- Educational Administration and Planning Research Project Writer in Lagos Nigeria
- Political Science Research Project Writer in Lagos Nigeria
- Accounting Research Project Writer in Lagos Nigeria
- Economics Research Project Writer in Lagos Nigeria
- Management Research Project Writer in Lagos Nigeria
- Marketing Research Project Writer in Lagos Nigeria
- Public Administration Research Project Writer in Lagos Nigeria
- MBA Research Project Analysts
- In Need of MBA Research Project Writer in Nigeria
- MBA Dissertation Research Project Writer
- MBA Project writer
- EDUCATION DEPARTMENT PROJECT WRITING SERVICES
- BACHELOR OF SCIENCE (BSC) DEGREE PROJECT WRITING SERVICES(B.ED,B.A,B.SC)
- MASTER OF BUSINESS ADMINISTRATION (MBA) RESEARCH PROJECT WRITING SERVICES
- MASTER OF SCIENCE (MSC) RESEARCH PROJECT WRITING SERVICES
- POST GRADUATE RESEARCH PROJECT WRITER
- POST GRADUATE DIPLOMA (PGD) RESEARCH PROJECT WRITER
- MASTER RESEARCH PROJECT WRITER
- MASTER DEGREE RESEARCH PROJECT WRITING SERVICES
- POSTGRADUATE RESEARCH PROJECT WRITING SERVICES
- MASTERS RESEARCH PROJECT WRITING SERVICES
- RESEARCH PROJECT WRITER
- EXPERT IN RESEARCH PROJECT/THESIS/DISSERTATION WRITING SERVICES IN LAGOS NIGERIA
- HIRE A PROFESSIONAL BSC/HND RESEARCH PROJECT WRITER
- HIRE A PROFESSIONAL MBA/MSC RESEARCH PROJECT WRITER
- HIRE A PROFESSIONAL THESIS WRITER IN LAGOS NIGERIA
- SC/M.SC/MBA/PGD RESEARCH PROJECT WRITER IN LAGOS NIGERIA
- Master Degree Research Project Specialist/Writer in Lagos, Nigeria
- Hire A Research Project Writer in Lagos Nigeria
- Research Project Specialist in Lagos, Nigeria