Accounting Ratios As A Veritable Tool For Corporate Investment Decisions: A Study of Selected Organizations In Delta State
This study was carried out to investigate accounting ratios as a veritable tool for corporate investment decisions: A study of selected organizations in Delta State. A set of structured questionnaire was used as the instrument for data collection and administered on eighty (80) respondents of the organizations under study in Delta State randomly selected using Taro-Yemane formula, the sample size from a population of 100 is 80 respondents at 95% confidence level. Data analysis was made using simple percentage tables and hypotheses were tested using the pearson product moment correlation co-efficient and the t-test at 0.05% level of significance. The result showed that positive and significant relationship exists between accounting ratios and the study of liquidity position of an organization. The result also showed that positive and significant relationship exist between accounting ratios in providing avenue for examining the operational efficiency of management in an organization. It was concluded that accounting ratios are necessary for the performance and survival of an organization. The study, however, recommended that organizations should never base conclusion on ratio, non-recurring and extra-ordinary items whether profit or loss should be eliminated when computing ratios, interpretation of results according to the general business conditions and a host of others for effective application of accounting ratios for proper investment decisions in corporate organizations.