THE ROLE OF RATIO ANALYSIS IN BUSINESS DECISIONS A CASE STUDY OF O. JACO BROS. ENT. (NIG.) LTD., ABA, ABIA STATE

TABLE OF CONTENTS

Title Page i

Dedication ii

Certification iii

Acknowledgements iv

Table of Contents v

Abstract vi

CHAPTER ONE

INTRODUCTION

1.1 Background Information 1

1.2 Statement of Problem 2

1.3 Objectives of the Study 5

1.4 Research Question 6

1.5 Significance of the Study 6

1.6 Scope of the Study 7

1.7 Limitation of Study 8

1.8 Definition of Terms used in the Study 9

1.9 Brief Historical Background of O. Jaco Bros.

Ent. Nig. Ltd, Aba, Abia State. 11

Reference 13

CHAPTER TWO

REVIEW OF RELATED LITERATURE

2.1 Introduction 15

2.2 Financial Statement Analysis 15

2.3 Parties Interested in Financial Statement Analysis 16

2.4 Objectives of Financial Statement analysis 17

2.5 Sources of Information for financial

Statement Analysis 18

2.6 Tools and Techniques of Financial

Statement Analysis 19

2.7 Uses and Objectives of Ratio Analysis 28

2.8 Types of Ratio Analysis 29

2.8.1 Univariate Ratio Analysis 29

2.8.2 Multivariate Ratio Analysis 62

2.9 Limitations of Ratio Analysis 67

Reference 71

CHAPTER THREE

RESEARCH METHODOLOGY

3.1 Introduction 72

3.2 Research Design 72

3.3 Data Collection Technique 72

3.4 Population 73

3.5 Sample Size and Sampling Technique 74

3.6 Instrument for Data Collection 75

3.7 Questionnaires Administration 75

Reference 76

CHAPTER FOUR

PRESENTATION, ANALYSIS AND INTERPRETATION OF DATA

4.1 Introduction 77

4.2 Data presentation and Analysis 77

CHAPTER FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

5.1 Introduction 86

5.2 Summary and Discussion of Findings 86

5.3 Recommendations 88

5.4 Conclusion 89

Reference 91

BIBLIOGRAPHY 91

APPENDICES

Appendix 1 Research Questionnaire to the

Management and Staff of O. Jaco Bros. Ent.

Nig. Ltd., Aba. 94

ABSTRACT

Accounting information provided by means of financial statements The income statement and the Balance Sheet are often in summarized form. Viewed on the surface, the truths about the results and the financial position of a business hidden in them remain veiled. To be of optimal benefit and as well enable the users make well informed decisions, financial statements need to be analyzed by means of ratios. Therefore, in order to establish the role of ratio analysis in business decisions, this research is carried out, using O. Jaco Bros. Ent. Nig. LTD., Aba Abia State as the Case study. The researcher made use of both primary and secondary sources of data collection. However, for the former, questionnaires were administered, whereas for the later, relevant were received. The data Collected via the primary data sources were analyzed using simple averages and percentages. After ratios analysis conducted on the chapter four, mode at 95 level of confidence 5 level of significance. Finally, it was established that ratios analysis evils business decision.