RELEVANCE OF FINANCIAL RATIO IN THE APPRAISAL OF SMALL SCALE BUSINESS
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BACKGROUND OF STUDY
Financial ratio analysis assumes that there is a relationship between certainaspects of the activities of the firm as revealed in the income statements, Accounting figures reported in the financial statement do not provideProfit and loss accountand the balance sheet, which established a pattern of behaviour. The information contained in the financial statement of a company isconnected with the financial well being and performance of the reporting entity, organized to enable users of financial statement to draw a conclusionmeaningful understanding of the performance of the financial position of a firm, except the figure are analyzed with other relevant information throughthe use of financial ratio analysis. Having established the fact that a ratio is useful and reliable in measuring the relationship between two things, this then gives rise to the need to study the relevance of the financial ratio in the appraisal of small scale business.
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