Thursday, 30 June 2016

The Impact Of Ratio Analysis On Managmenet Decision Making In And Organization



In every organization irrespective of its size, ownership, structure, impact of ratio analysis on management decision making occupy a crucial position. However, given the centrality it can be said that behind every successful organization, the process in which the management arrive at decision making is very important as far as financial management is concerned in the private sector of the economy and specially in a banking institution like united bank for Africa (UBA) in a nut shell, the impact of ratio analysis on management decision making which is the most pre-occupation of this research work is referred to the manner through which the management of organization takes decision suitable for profits as possible , future planning, controlling current performance and future development through liquidity analysis, leverage analysis and activity analysis.


TABLE OF CONTENT
Title page
Certification
Dedication
Acknowledgement
Table of Content

CHAPTER ONE
1.1 Background of the Study
1.2 Statement of the Study
1.3 Research of the Study
1.4 objective of the Study
1.5 Research Hypothesis
1.6 Significance of the Study
1.7 Scope and Limitation of the Study
1.8 Definition of the Terms
1.9 Organization Planning

CHAPTER TWO
2.1 Literature Review
2.2 Historical Background of the case Study
2.3 Conceptual Frame Work of Ratio Analysis
2.4 Approaches to Use of Ratios
2.5 Classification or Types of Ratios
2.6 Place of ratio Analysis in an Organization or Financial Institution
2.7 Expected role of Managers in Relation to ratio Analysis
2.8 Contribution of Investors to Administrative Performance in Terms of Financial Ratio Analysis
2.9 Contribution of Ratio Analysis in Decision Making in an Organization

CHAPTER THREE
3.1 Research Methodology
3.2 Population Size
3.3 Source of Data
3.4 Research Instrument
3.5 Data analysis Procedure

CHAPTER FOUR
4.1 Introduction
4.2 Presentation and Analysis of Data
4.2.2 Distribution of Respondent by Sex
4.2.3 Distribution of Respondent by Age
4.2.4 Distribution of Respondent by Marital Status
4.2.5 Distribution of Respondent by Education Qualification
4.2.6 Distribution of Respondent of Management

CHAPTER FIVE
5.1 Summary
5.2 Conclusion
5.3 Recommendations
      References
 
CHAPTER ONE
1.1 BACKGROUND OF THE STUDY
     
Significance change has taken place recent years in the size and complexity of both private organization and public organization because of this management is faced with evaluation in technical social political and economic forces. As a result the methods of arriving at the decision as become more difficult to management especially account activity of the organization/ this research is devoted to examination of some major impact of ratio analysis in financial institution (united bank of African).

1.2 STATEMENT OF THE PROBLEM
1. Problem of ratio Analysis: Whether ratio analysis can be used to ascertain the strength, weakness, opportunity and treat of the organization and whether ratio analysis can be used to determine the trend of development and performance of the organization over time.

2. Problem of Management: Whether management relies on ratio analysis for decision making.

3. Problem of decision Making: the organization depends on the decision making.

1.3 RESEARCH QUESTIONS
For the purpose of this study, the following question is raised to enable the researcher find possible solution to the identified problem if properly answered.
       How is the application of ratio analysis useful when it comes to decision making in the organization
         In what way is the application of ratio analysis useful in evaluating the financial performance of the organization.
         How do interest parties in united bank for Africa apply and use ratio analysis in evaluating the bank before taking their decision.
         How is ratio analysis of importance when it comes to granting of loan and advances to customer?
         To what extent does ratio analysis help the chief executive of the bank in decision making?
       
How is ratio analysis of importance to the balance sheet of the bank?

1.4 OBJECTIVE OF THE STUDY
To find out how efficient and effective the management evaluates its financial position.
         
To find out the performance of the institution with regards to the financial analysis or ratio analysis in making a quantitative judgment about the institution financial position and its achievement.
         To find out the effective implementation of the traditional function of banking acceptance of deposit to find lending.
          To find out efficient financial resource mobilization without inflationary money supply expansion for economic development especially when external borrowing is viewed as a last resort.
           To find out the commitment and identification on the institutional and its good by institution a design and activities of people and adopting a participating or democratic style of management maintaining accountability of assets.

1.5 RESEARCH HYPOTHESIS
Ho-Ratio analysis does not have a positive impact on decision making in the banking industry.
Hi-Ratio analysis has a positive impact on decision making the banking industry.

1.5 SIGNIFICANCE OF THE STUDY
The significance of impact of ratio analysis in financial institution cannot be over emphasis. it is therefore expected that this research work is bound to be beneficial to the following:

  • Management: Most management decision are based on information from ratio analysis. Management planning is also support by vital information from ratio analysis.

  • Share Holders: For share holders to determine their wealth maximization, the rely on information from ratio analysis such as stability ratio and leverage ratio.

  • Potential Investors: For potential investors to embark on investment in an organization, the need to know how reliable the organization is and for them to know or ascertain the viability the organization is based on vital information from ratio analysis.

  • Employees: the interest of employees in the organization is on how their welfare can be improve . they are able to obtain information for the agitation for improvement on their welfare through ratio analysis such as profitability ratio.

  • Student : It is expected that students mostly undergraduates stand to benefit from this research work because it will serve as a source of ratio analysis.

  • Government : Government also rely on information from ratio analysis in the in the assessment of the organization for tax purpose such as profitability and liquidity ratios.

1.7.1 SCOPE OF THE STUDY
The scope of this research work will be specially to UNITED BANK FOR AFRICA PLC ILORIN branch; with regards to its accounting ratio which will help in :
i.The assessment of profitability
ii.Assessment of liquidity
iii.Assessment of activity
iv.Assessment of failure.

 
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