ABSTRACT

The need for the continuous evaluation of the performance of management in assessing the financial position of a firm brings about the question of which tool or method of analysis will be used to make such assessment or evaluation of the various dimensions of the business and financial operations of the firm in question 0neôf such method or tools of analysis is accounting ratios. This project aims at assessing the reliability and validity of accounting ratios in evaluating management performance using Nigerian Breweries Plc Enugu as a case study. In order to achieve this, the works of various authors were looked at in order to get their viewpoint on the subject Also, a field work was conducted in which questionnaires were distributed among respondents made up of accounting staff' of Nigeria Breweries Plc Enugu in which questions bordering on the topic were asked and answers given. A sample size of 67 was derived from a population of 80 staff of the accounting department of Nigeria Breweries Plc Enugu using Taro Yamane. Some findings made from the research are that ratios helps the analyst to make qualitative judgments regarding the financial position and performance of the firm and that liquidity ratios measure the ability of the firm to meet its obligations. 'It was also recommended that accounting ratios should be used as a performance indicator by management as it outscores other tools of financial analysis such as fund flow statements and straight forward criticism. Also, it was also suggested .that management should maintain a reasonable level of liquidity to enable it meet its obligations promptly.