FINANCIAL RATIOS AS MEASURE Of CORPORATE PERFORMANCE
FINANCIAL RATIOS AS MEASURE Of CORPORATE PERFORMANCE
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Date
1990
Authors
SAMAILA, ALHAJI ABDULLAHI
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Abstract
ABSTRACT
Financial Ratios as measures of corporate performance and
profitability is to determine how financial ratio analysis as an
analytical tool can be used in analysing and evaluating the
performance as well as the profitability of selected banks with a
particular reference to commercial banks during the period under
review 1993 to 1997.
The ability to resolve and predict performance and profitability is
very important to any business either in public or private sector.
Measuring performance of banks is useful and important to the
management, investors, shareholders, creditors, government and
workers in order to take preventive measures, such as changing
operation policies and reorganising the financial structure.
The study will cover only the major four areas of ratio Analysis,
that is, Liquidity ratios, activity ratios, leverage ratios and
profitability ratios.
(1) Liquid ratio: This measures the banks ability to meat it's
maturing short term obligations.
(2) Activity ratio: Measures how effectively the banks employs
the resources at it's disposal. The activity ratio presumes that a
proper balance should exist between gross earnings and various
assets accounts i.e. stocks, trades,debts and fixed assets.
(3) Leverage ratio- This measures the debt position of the
commercial banks indicating the amount other people's money
that is being used in attempting to generate profit.
(4) Profitability ratio- Measures the relationship between a banks
total earning and it's assets or it's Equity...Attention is centred
around the banks profitability, since in order to stay in existence
it must be profitable.
Ratios analysis can be used to identify financial strengths and
weaknesses of a bank, by properly determining and establishing
relationship between the items of the balance sheet and the profit
and loss accounts.
Description
IN PARTIAL FULFILLMENT FOR THE AWARD
OF DEGREE OF MASTERS IN BUSINESS ADMINISTRATION (M.B.A)
Keywords
FINANCIAL,, RATIOS,, MEASURE,, CORPORATE,, PERFORMANCE,, PROFITABILITY.