Description
Critical evaluation of financial analysis as a basic for checking corporate performance (a study of Nigerian Air Liquid Nig Plc Jos, Plateau State).
Abstract
Financial performance deals with measuring in monetary form the result of an organization’s operations. These results are reflected in the financial statements of the organization which are usually prepared regularly. The financial performance of the cooperatives is a very good basis for decision-making on the part of the members, the management, the government and the general public. The main purpose of this research is to analyze the financial performance of credit and multi-purpose cooperatives in the Ifugao province, registered with the Cooperative Development Authority. Eight multi-purpose cooperatives with duly audited financial statements three years back were included in the study. This study used selected financial analysis tools such as liquidity ratios, leverage, profitability ratios and operating efficiency ratio. The result of the financial performance analysis showed that the liquidity and leverage position of the multi-purpose cooperatives is not sound enough and they are all at a high financial risk because most of the capital of these cooperatives came from external sources. There is a need then for these cooperatives to lower their debt by fully utilizing their equity before resorting to credit. As illustrated in the study, two of the multipurpose cooperatives have generated unsatisfactory profits during the study period, this suggests that there is a need for these two cooperatives to improve their profitability by minimizing their operating and administrative expenditures.
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