Monday, 1 August 2016

Profitability As A Measure Of Organizational Performance

The extent of which corporate objective are achieved depends on the quantum and quality of resources as its disposal.  We all know that resources are not only scare relative to the demand for them but also waiting assets.  For example, plants become absolute, land loses it fertility, money get spends and executives (men) get old.  The scenario implies that resources must be constantly aquired used efficiency and replaced” (Asien, 2000).

The fact that activities mentioned above cost money implies that the survival of the firm depends on the profit realized by it.  Profit can therefore be defined as the excess of income over expenditure.

Title page                                                                         
Table of content                                                       

1.1 Background of the study                                  
1.2 Statement of the problem                                
1.3 Objective of the study                                      
1.4 Research Question                                           
1.5 Significant of the study                                      
1.6 Scope and Limitation of the study                   
1.7 Research Method                                             
1.8 Definition of Terms                                          

2.1  Literature Review                                             
2.2 Need for Financial Analysis                             
2.2.1 Financial Ratio Analysis                              
2.2.2 Uses of Financial Ratio                                        
2.3   Profitability Analysis                                        
2.4   Types of Profitability Ratio                                       
2.5   Uses of Standard in Ratio Analysis                  
2.6   Limitation of Financial Ratio                           

3.1 Historical Background of United                      
Bank for Africa Plc
3.2 Mission and Vision of the Bank                          
3.3 Accounting Policies Operated by the Bank              
3.4 Data Specification                                            
3.5 Research Instrument                                       
3.6 Techniques of Investment                                        
3.7 Personal Interview                                           
3.8 Data Analysis                                                   
3.9 Limitation of Methodology                                       

4.1Presentation and Analysis of Data                   
4.2Summary of Financial Statement for the                 
part five years of UBA Plc.
4.3 UBA Plc Trend Analysis Table                          

5.1 Summary of Finding                                        
5.2 Recommendations                                           
5.4 Appendix                                                                 
5.5 Journals                                                          
5.6 Bibliography                                                    

The definition of profit depends on the information needs of the company.  If the underlying profitability of the business the objective review a company’s, result, then it is an operating profit. i.e gross profit less expenses.

According to Ellis (1993) says that “Financial reporting of profit provides a key measure of the performance outcome, associate with performance outcome associated with an organization strategy”.  This means that before the performance of a business can be evaluated a proper profit measure approach must be operated by the organization.  Therefore, the function of financial manager is to include profit planning.

The term profit planning refers to the operating decision in the area of pricing, costs, volumes of out pout and the firms selection of product brings.  Profit planning is therefore a pre-requisite for optimizing investment and financing decisions (Mao and James 1969).     

The major aim of establishing a business is to make profit unless adequate (net profit) are generated and used for the replacement of resources, the firm will eventually be run down.,  profit analysis in business have the following advantages:-
i.) It helps to increase the equity control of shareholders through retained earning.
ii.)It also helps to raise the loss absorptive capacity of the organization.
iii.)The ability of the companies to pay its dividends depends on the size of its profits.

A company should earn profits to survive and grow other a long period of time.  Profits are essential, but it would be wrong to assume that every action initiated by management of company should be earned at maximizing profits, irrespective of social consequences. 

Although, profits is the ultimate output of a company, and it will have no future say if it fails to make sufficient for a firm and the reporting of its in the financial statement is not just sufficient but to show the weak and strength of a real accounting system that is in the usefulness of its application rather than information or data gathering processing aspect (Paul et al, 1972).
In this view, the financial manager, should, continuously evaluate the efficient of its company as to achieve its targeted goal i.e profits.  Financial statement of companies are tools which produces a means through which this evaluation can be carried out.  Meaning that financial statement should be used to examine the statement of success of the business over the period.  


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