The Role of Accounting Ratio Analysis in Measuring Financial Performance of a Film and Aiding Investment Decision

The purpose of this study was to investigate the role of Accounting Ratio analysis in measuring financial performance of Ekiti State Water Cooperation. The study was guided by three research objectives specifically to identify the different forms of ratio used by Ekiti State Water Cooperation, determine the role of accounting ratio analysis in measuring financial performance and identifies the limitations of ratio analysis in measuring performance. The study was covered using a cross sectional and a case study research designs which seemed applicable for the research based on Accounting Ratio Analysis. The study was based on a Self-Administered Questionnaire (SAQs) which were used because they are the most suitable in a survey that involves a large number of respondents. A total of 108 employees were randomly selected, although at last only 74 were retrieved. Data was analyzed using frequency tables and percentages and the study concluded that despite the achievements, gaps between this accounting ratio and performance still exist for example false accounting, comparison is not possible if different firms adopt different accounting policies, Ratio analysis becomes less effective due to price level changes and Lack of proper standards affects the appropriateness of ratio analysis. The study recommends the organization to provide a good proper working condition for accomplishment of the assigned tasks which should be backed by enhancement of employee involvement programs and provision of employee training and refresher programs.