CHAPTER ONE
1.2 STATEMENT OF THE PROBLEM
The manufacturing industry today is an integral part of the Ghanaian economy. The manufacturing industry has gone through some transitions to its current state. The industry over a number of decades now has experienced great decline and as a result most of the organizations have closed down due to poor performances. In this light, successive governments have made great stride to improve this industry by way of reviving some of the dead organizations. Moreover, the continued growth of an institution may depend on its ability to generate adequate resources from its day to day operations. Financial performance measurement or assessment is therefore imperative in assessing the growth and progress of a business. Assessing the financial position of a company in a likewise manner requires examination of its past and current performance in order to predict its future prospects. By using financial performance measures, a company’s performance can be linked more closely to shareholder’s value and wealth. Attention can, thus, be directed to ways in which companies can create more value for shareholders. Therefore, this study seeks to adopt ratio analysis as a key financial performance appraisal method to examine, evaluate and interpret the growth trend of Unilever Company Limited.
1.3. RESEARCH OBJECTIVES
The purpose of the study is to assess the financial performance of manufacturing organizations for the period, 2008, 2009 and 2010 using Unilever Company Limited as a case study. The objectives of the study include:
1. To measure the liquidity position of Unilever Company Limited.
2. To find out the profitability trend of the organization given its level of investment and turnover.
3. To find out the level of gearing and investment ratios of the organization.
4. To assess the performance measurement policy within Unilever Company Limited.
1.4. RESEARCH QUESTIONS
1. What is the liquidity position of Unilever Company Limited?
2. Given their level of investment turnover, what is the profitability trend of the organization?
3. What is the ratio between the levels of gearing and investment of the organization?
4. What performance measurement policy is adapted within the organization?
1.5 SIGNIFICANCE OF THE STUDY
This study gives insight into the various ways or techniques that will help improve organizations performance and how the financial performance of organizations in Ghana can be properly assessed. The study will also go a long way in showing the various accounting techniques that managers can adopt in measuring financial performances, and its implications on the financial position of organizations. The findings and recommendations of the researcher will help in building a strong and better accounting practices that will help in the assessment of organizations performance in Ghana, if taken seriously by government and the general public. It may serve as a reference to other researchers who may want to research into the field.
1.6 SCOPE OF THE STUDY
The overall scope of the study is to assess the financial performances of Unilever Company Limited for the periods 2008, 2009 and 2010. Unilever Company Limited was chosen because it is near to the researcher and gathering of information also becomes very easy. The above periods were also chosen because; the researcher wants to assess the more recent financial performance of the company under study. With the assessment of the financial performance, the researcher will adopt the concept of ratio analysis tools and techniques. The scope in terms of location can be found in the Eastern Religion, Koforidua. This region was selected because of proximity to the researcher.
1.7 LIMITATIONS OF THE STUDY
Notwithstanding the concern for efficient, effective and dependable findings, there were few limitations encountered in the course of carrying out the study. Among these include:
1) Limited funds available to undertake the study.
2) Attitude of Respondents: there was a poor response from respondents to interviews which brings diiculty in compiling and analyzing available data.
3) Availability of Data: There was also the problem of getting data from the selected organizations. That is, there was delay in getting the data needed from the organizations .or not getting it at all.
1.8 ORGANIZATION OF THE STUDY
This research paper is organized into chapters, with the chapters being organized as below:
Chapter one – this chapter includes the general introduction, background information about the study, statement of the problem, objectives of the study, research questions, scope of the study, significance of the study, and the limitation of the study.
Chapter Two – this chapter reviews the related literature on the topic-Assessing the financial performance of Unilever Company Limited for the periods 2008, 2009 and 2010. This chapter considers both the empirical and theoretical literature available on the subject matter.
Chapter Three – this chapter deals with methodology of the research. That is the various methods that the researcher adopted in carrying out the research. This chapter includes the study site, research design, data collection methods, data analysis and limitations.
Chapter Four – this chapter is concerned with the discussion of Data, analysis of data and the interpretation of the data collected. That is, how the data was processed, presented, arranged etc. to bring out the meaning in them so to help achieve the objectives of the study. The chapter is made of absolute figures, charts, tables etc in analyzing the data collected.
Chapter Five – Summary of findings, Conclusion and Recommendations. This chapter deals with presentation of findings, making conclusions from the findings of the study and its implication. It considers recommendations and suggestions based on the findings of the study.