FINANCIAL ACCOUNTING RATIOS AS A TOOL FOR THE EVALUATION OF MANAGEMENT OF MILLS COMPANY
Journal Title: WUKARI INTERNATIONAL STUDIES JOURNAL - Year 2024, Vol 8, Issue 3
Abstract
This study investigated the financial accounting ratios as a tool for the evaluation of management of Mills Company. To achieve this, a sample of audited financial statement from the selected company was used for the computation of relevant ratios, where analysis and the interpretation of the result becomes possible. An extensive empirical and conceptual literature review were carried out based on the variables of the study. Research question was posed for a guide to the computation of the relevant ratios. The population of the study comprised all registered Mills companies within the areas of the study. The sampling techniques used was a two-stage sampling technique which are purposeful and a simple random sampling technique. Primary data collected were from the audited financial statement of the selected mills company which the data were used for the computation of the major ratios. The analysis and interpretation of financial performance of the mills company were carried out. The study revealed that the financial performance and the returns from investment was encouraging, the efficiency with which inventory, receivables and trade payable were managed was good, the selected company was having a poor liquidity control measures and its debt capacity was high but not excessively high beyond control. The study suggests that financial accounting ratios stands as a powerful tool in forecasting the poor and the good performance of a company. Based on the findings, it was recommended amongst others that business managers of mills company should appreciate the important of frequently subjecting their financial statement to ratio analysis to determine the financial health of the company, users of financial statement are highly advised to use financial ratios to analysis their financial statement of a company for a better financial decision.
Authors and Affiliations
EGU USANG INAH, AGIM, DAVID AGIABEKONG, IYANG GODWIN USHIE
Keywords
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