This study examined the effects of
performance evaluation through the analysis of financial statement on
investment decision, using Longman Nigeria Plc as the case study. Based on the
set objectives of the study, structured questionnaire consisting of eighteen
(18) close-ended questions and one (1) open-ended questions were developed and
administered on one hundred (100) respondents of the aforementioned company,
but a total of ninety-four (94) questionnaires were completely filled and
returned. Hence, the study employed primary and secondary data (i.e.
questionnaire method, interview method, and data sourced from established
publications). Data collected were analysed with the aid of chi-square
statistical technique. Findings from the study shows that Performance
Evaluation should be in line with achieving Corporate Objectives and moreover,
analyses of financial analysis has helped in identifying the weakness in
company’s operation. The study recommended that management should ensure that
performance evaluation in line with corporate objectives.
to the Study
of the company
of the Problem
of the Study
and Limitation of the Study
of the Research Method
TWO: LITERATURE REVIEW
of Performance Evaluation
Aspects of Performance Evaluation
2.11 Alternative means of Analysis
THREE: RESEARCH METHODOLOGY
and Sampling Technique
Study: Validity and Reliability
of Data Analysis
for using Chi-square method
FOUR: DATA ANALYSIS AND INTERPRETATION
FIVE: SUMMARY, CONCLUSION AND RECOMMENDATIONS
for Further Studies
1.1 BACKGROUND TO THE STUDY
Financial analysis involves the
assessment of a firm's past, present and anticipated future financial
condition. The objective is to identify any weakness in the firm's financial
health that could lead to the future problems and to determine any strength
that the fine might capitalize upon.
The need for financial accounting
statement is becoming increasingly indispensable. This is due to the increased
complexity of the economy and the massive growth of corporate organization.
1.2 HISTORY OF THE COMPANY
Longman Nigeria was incorporated on the
10'' August, 1961 as a subsidiary of Longman group Ltd. A renowned British
Publishing Company founded in 1724. Although, Longman, Green and Company, as
this company was then known had since 1947 had a representation in Nigeria, it
had operated as a mere trading out post of the U.K. parent company
concentrating on the importation and distribution of education books produced
primarily for the British school system.
A study of the progress of Longman
Nigeria Plc. over the past thirty-three years has shown various successful
project that have had powerful influence on the direction and development of
publishing industry and indeed education in Nigeria. The blue-print of
Longman's text development and list building strategies are largely
attributable to its crop of pioneer employees.
1.3 STATEMENT OF THE PROBLEM
Extent to which the company is able to
influence its overall performance.
to meet its financial obligation in form of dividends to investors.
to meet debt payment on due dates by having sufficient cash available.
1.4 OBJECTIVES OF THE STUDY
The objective of this study is to:
the performance of organizations (with particular reference to Longman Nig. Plc.),
in order to ascertain its level of performance.
to what extent investors' decision are influenced by the analysis of the
iii. Finally interpret and advices where
necessary on appropriate actions to take in order to improve the performance of
Financial ratios give the previous
year's performance and average performance in the industry meaningful
comparison of a firm's financial data at different points in time and with
other firms. It provides the basis for answering some relevant questions
concerning the well-being of the firm.
liquid is the firm?
management generating sufficient profit from the firm's assets?
does the firm's management finance its investment?
common stakeholders recovering sufficient returns on their investment?
Top executives must know that the
effectiveness with which accounting information satisfies the organization's
wider goals depends on to relevance, time lines and accuracy and the way it is
used by member of the organization.
evaluation should be in line with achieving corporate objectives
evaluation should not be in line with achieving corporate objectives
1.7 SIGNIFICANCE OF STUDY
This research will be useful to
management of up and coming companies. It is aimed at helping organizations in
their bid to improve growth and to allow more investing public. Significantly,
this study will be of benefit in the following areas:
study will guide the company in its future planning and growth formation
will also guide the company to more purposeful areas investment.
1.8 SCOPE AND LIMITATION OF THE STUDY
The scope of this study will be based
manually on the financial statements of Longman Nigeria Plc. as presented in
its annual reports which would be used to evaluate its performance. The scope
of the research shall cover a period of four years. The balance sheet and
income statement contained in the annual reports shall be analyzed using ratios
to highlight the company's operating performance.
The research will be limited to the
publishing industry to which Longman belongs. This research would also be
limited to the performance of Longman Nigeria Plc in relation to that of its
competitors; care would be taken not to delve into inter-firm comparison but
the general performance of the company. The personnel function, administrative
and such other functions not financially oriented will not be dealt with.
OF DATA COLLECTION
The researcher made use of primary and
secondary data as supported with the aid of Annual
Reports of the company (Longman Nigeria Plc.) and that of its competitors in
the publishing industry.
1.10 LIMITATIONS OF THE RESEARCH METHOD
The main tool of this research was the
annual reports of the companies under review and the use of ratio analysis to
interpret the information contained in the reports. Hence, the primary data is
also used to elicit information for the study.
With reference to the Annual reports,
the information contained therein were arrived at, in line with the historical
cost concept, they are not perfect indicators of future and may not represent
the presents the naira worth.
DEFINITION OF TERMS
refers to the evaluation of the operating performance of the company. Thus it
refers to the evaluation of the profitability and efficiency of its operation.
is the collective name for the items in the company's annual report i.e.
balance sheet and income statement. Those statements represent the final output
of the accounting process.
analysis: This is the
comparison of relationship between two items for a useful interpretation of
Profitability: this is profit in relation to
investment that generated it.
company: This refers to
Longman Nigeria. Plc
M. A. (2002): Financial: Theory and practice with Nineteen Accounting
A. R. and Bierman, H (1982): Managerial Accounting An Introduction - 3rd
J. (1982): Financial Accounting: Principles and Practice Graham Burn Publisher.
J. (1986): Management Accounting. English Language Book Society - 4th Editor.
L. M. (1967) financial Management Vikas Publishing House.
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