FINANCIAL RATIOS AND THE PERFORMANCE OF BANKS IN NIGERIA

FINANCIAL RATIOS AND THE PERFORMANCE OF BANKS IN NIGERIA

Project Details

FINANCIAL RATIOS AND THE PERFORMANCE OF BANKS IN NIGERIA



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Description

The broad objective of this study was to examine financial ratios and performance of banks in Nigeria. This is imperative because the separation of ownership from control has necessitated management running the affairs of the firm for their self-interest. Financial ratios presented by management tend to be deceptive. The demise of high profile firms like Afribank Plc, Union bank Plc, Cadbury Plc in Nigeria have shown incidence of deceptive financial ratio fraud as their ratios were robustly dressed. In order to achieve the broad objective of this study, three (3) hypotheses were raised for validation. The data for the analysis were collected from the published annual report and statement of account of the banks. The Ordinary least regression method was adopted for the analysis and the result of the estimation was facilitated using the statistical package for social and management sciences (SPSS). The result established that the ratio of loans to assets (CR) has a significant positive impact on bank performance (ROA). The ratio of cash plus demand deposit (CLTAR) was also found to have a significant positive impact on bank performance (ROA). Finally, the study found out that, the ratio of earning assets to total assets (TCATAR) has a significant positive impact on bank performance (ROA). Among others, the study recommends that, banks should ensure that information provided by financial ratios be used for decision making, planning and control.
TABLE OF CONTENTS
CHAPTER ONE – INTRODUCTION
1.1 Background of the Study
1.2 Statement of the Problem
1.3 Objectives of the Study
1.4 Research Questions
1.5 Research Hypothesis
1.6 Scope of the Study
1.7 Justification of the Study
1.8 Operational Definition of Terms
CHAPTER TWO – LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 The Concept of Financial Ratios
2.1.2 Classification of Ratios
2.1.3 The Need for Financial Ratios in Firms
2.1.4 Financial Ratios and Planning
2.1.5. Financial Ratio Analysis Techniques in Organizations
2.1.6 Limitations of Accounting Ratios
2.1.7 Performance, Measurement and Financial statement
2.2 Theoretical Literature
2.2.1 The value maximization
2.2.2 Capita Needs Theory
2.2.3 Signaling Theory
2.3 Empirical Literature
CHAPTER THREE – RESEARCH METHODOLOGY
3.1 Introduction
3.2 Research Design
3.3 Study Area
3.4 Population of the Study
3.5 Sample Size and Sampling method
3.6 Data Type and Instrument for Collecting data
3.7 Validity and reliability of research Instrument
3.8 Description of the variable
3.9 Method of Data Analysis
CHAPTER FOUR – PRESENTATION AND ANALYSIS OF DATA
4.1 Presentation of Data
4.2 Presentation of Result
4.3 Interpretation of Result
4.4 Discussion of Findings
CHAPTER FIVE: SUMMARY OF FINDINGS, CONCLUSION, AND RECOMMENDATIONS
5.1 Summary of Findings
5.2 Conclusion
5.3 Recommendations
REFERENCES

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