Relevance Of Accounting Ratio On The Interpretation Of Corporate Performance (A Study Of Unilever Plc, Lagos)

ABSTRACT

The interpretation of final accounts and its components as regards the business is a very important accounting function. This function is made easy through the computation and interpretation of financial ratios. The aim of this study is to evaluate the relevance of accounting ratio on the interpretation of corporate performance. The researcher computed some financial ratios from the published financial statement of Diamond bank Nig. Plc. These ratios formed the data for the study and simple regression method of analysis was used to examine the relationship between the variables. The variables that were considered are accounting ratios and corporate performance. The study found out there is a significant relationship between liquidity ratio and corporate performance interpretation. Also it was gathered that there is a significant relationship between leverage ratio and corporate performance interpretation. Finally it was concluded by the study that there is a significant relationship between profitability ratio and corporate performance interpretation. Based on the above the study recommends that accounting ratios analysis should be properly appraised in banks in order for the management to identify the strength and weaknesses inherent in the system as they serve as performance indicator.