1.1 BACKGROUND OF THE STUDY
Recent researchers have been shown that one of the main causes of indigenous business failure in this country is failure to maintain proper financial records. Many business have been operated with merely a single entry memorandum record of transactions and others with no records whatever, except possible cheque stubs. As a result, business decisions are based on quesses and intruition. Ola (1985).
In todays economy information and accountability have assumed a larger role in our society. This is why it is statutory company and allied matte decree (1990), for all registered companies in the country to prepare and present financial statements in accordance to the relevant accounting regulations.
Business organizations have to analyze their financial statements or accounts by way of interpretation, simplification and transaction of facts and data contained in the financial statement.
The essence of this is to draw relevant conclusions, make inference as to the business operations financial positions and future prospects of the organizations.
In the assessment of the performance of an organization, an imfortant area of management control is post factor assessment of financial results of the organization as a whole, that is the examination in retrospect of the financial effects of earlier decisions to invest. Management must reoularly commit resources for both long term and short term purposes and because the commitment will always involve risk, or cargul assessment of the anticipated results of any project on the financial position should be made before a decision is taken, and before resources are irrevocably committed.
A periodic evaluation is needed, after resources have been invested, to report what has been achieved, to examine amount of the profit, or the extent of the loss, and to consider the effect of implementing the plan on the financial statement of the business, in particular to note whether financial stability has been maintained or alternatively the extent to which it has been impaired. Information on all these aspect of the finances of the business is needed to permit management to assist the quality of past decisions at strategic level and the effectiveness with which they have been implemented. Finally, it is important that informed base of financial knowledge should be developed from which future activities can be planned.
An important purpose of the appraisal of results is to confirm whether or not the project has produced the expected cash flow.
The main function of the financial account of a business however is to measure the results in terms of profitability and it is on the basis of success or failure measured in these terms that management will be juged.
In carrying out an analysis of accounts, a number of issues must be considered and conclusion formed thereon.
1. Profitability of the business operation, particularly in relation to the capital employed.
2. Solvency of the firm: the ability of the business to pay its creditors, the adequacy of its working capital and the current liabilities.
Can't find what you are looking for?
Call (+234) 07030248044.
OTHER SIMILAR ACCOUNTING PROJECTS AND MATERIALS
AN APPRAISAL OF THE IMPLICATION OF ELECTRONIC BANKING IN NIGERIA BANKS (A CASE STUDY OF ACCESS BANK)
CHAPTER TWO REVIEW OF RELATED LITERATURE Electronic banking in Nigeria has overtime been viewed by many especially economists as having a lot of implications on the economy of Nigeria and especially...Continue reading »
A CRITICAL ANALYSIS OF THE USE OF FINANCIAL STATEMENTS IN ASSESSING THE PERFORMANCE OF AN ORGANIZATION (A CASE STUDY OF FIRST BANK NIGERIA)
ABSTRACT The study was carried out to analyse how an organization performs making use of the financial statements with First Bank of Nigeria Plc serving as the case study. the study disclosed that th...Continue reading »
AN EVALUATION OF THE PERFORMANCE OF NIGERIAN STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIA ( A CASE STUDY OF NIGERIAN STOCK EXCHANGE)
HISTORICAL BACKGROUND OF THE NIGERIA STOCK EXCHANGE IN THE ECONOMIC DEVELOPMENT OF NIGERIAN. The nigeria stock excahnge denoted by NSE is a government establishment where stocks are traded on a daill...Continue reading »
APPLICATION OF BUDGETS AND BUDGETARY CONTROL MEASURES IN A NON-PROFIT ORGANIZATION: A CASE STUDY OF APOSTOLIC CHURCH, DELTA
2.1 CONCEPTUAL FRAMEWORK A budget is can be defined by accountants as “a planned outcome to be generated and for the expenditure to ensure during that period and the capital to be employed to a...Continue reading »
ASSESSING BOOK-KEEPING PRACTICES OF SMALL AND MEDIUM SCALE ENTERPRISES IN CALABAR LOCAL GOVERNMENT AREA
ABSTRACT The economy of Nigeria cannot function properly or thrive without the micro, small and medium scale enterprises (SMEs). These small scale enterprises cannot function properly if they are not ...Continue reading »
ASSESSMENT OF ADEQUATE RISK RECOGNITION AND MANAGEMENT IN NIGERIAN INSURANCE COMPANIES (A CASE STUDY OF UNION ASSURANCE COMPANY, UYO)
THE CONCEPT OF RISK Risk has been the subject of study by different scholars over the years with several meaning and definitions. But the most accepted definitions are that of J.E Banister and P.A Baw...Continue reading »
What are looking for today?
THE IMPACT OF HUMAN RESOURCE PLANNING ON ORGANIZATIONAL PERFORMANCE
65,820 people found this useful
THE EFFECT OF SOCIAL MEDIA ON STUDENTS PERFORMANCE IN LEARNING LISTENING COMPREHENSION
50,061 people found this useful
TAX ADMINISTRATION IN NIGERIA: CHALLENGES AND PROSPECTS, A CASE STUDY OF LAGOS STATE BOARD OF INTERN...
44,471 people found this useful
THE EFFECT OF TREASURY SINGLE ACCOUNT ON THE ECONOMY OF NIGERIA
43,127 people found this useful
IMPACT OF SOCIAL MEDIA ON CONSUMER BEHAVIOR
42,930 people found this useful
CAUSES AND EFFECTS OF COMMUNICATION BREAKDOWN IN AN ORGANIZATION (A case study of champions’ brewe...
41,200 people found this useful