A CRITICAL ANALYSIS OF THE USE OF ACCOUNTING RATIOS TO MEASURE FINANCIAL PERFORMANCE OF ORGANIZATION

A CRITICAL ANALYSIS OF THE USE OF ACCOUNTING RATIOS TO MEASURE FINANCIAL PERFORMANCE OF ORGANIZATION (STUDY OF UNILEVER FINANCIAL STATEMENT FROM 2009 TO 2011)

ABSTRACT

The study critically analyzed the use of accounting ratio to measure the financial performance of an organization. This study was undertaken majorly to analyze the impact of accounting ratio on the financial performance of an organisation. Specific objectives of the study are: To measure the liquidity position of Unilever Company Limited, to find out the profitability trend of the organization given its level of investment and turnover, to find out the level of gearing and investment ratios of the organization and to assess the performance measurement policy within Unilever Company Limited. Concerning methodology for this study, the major instrument used for this study is the secondary data. The company’s financial data and performance were captured and used in the analysis. The surveys research method was used for this study. The survey technique will also allow the researcher to examine several variables and use multi-variant statistics to analyze data. In analyzing the data collected for the purpose of carrying out this research, the statistical tool known as the Pearson Product Moment Correlation (PPC) and the statistics were used. The use of sample percentage was also employed. Tables were used in presenting the data for the purpose of the simplicity and clarity. The overall aim of this project is to assess the financial performance of manufacturing organizations for the period, 2009, 2010 and 2011 using Unilever Company Limited as a case study.