Abstract

This study examined the role of ratio analysis in business decision. the study

specifically examined the effect of ratio analysis in understanding

information contained in the financial statements, effect of ratio analysis on

business decisior, the techniques used in ration analysis and the usefulness

of financial ratios. The taro yamçne techniques was used to select a sample

size of 25 staff form union bank plc Umuahia, Abia state, Nigeria. A wcll

structured questionnaire was used to elicit the data from the respopdents.

likert scale and chi-squire was used to analyze the data and test the

hypothesis of the study. The chis-quare test of the responses suggest the

acceptance of the null hypothesis that ratio analysis has no significant effect

in business decision, but the ratio analysis was observed to be important in

understanding financial reports and predicting the mature of business

performance. Based on the it was recommended that ratio should be

computed to enhance the understanding of financial statements and predict

business performance.