Sample Thesis Paper

Banks have faced the dilemma that no single criterion exists for performance evaluation. There have been two fields of research in the evaluation of performance of the banks. They are efficiency measures and financial ratios (Lacewell 2003). Elyasiani et al (1994) were also among the pioneers to test the nature of ‘the relationship between financial performance, measured by accounting-based ratios, and production performance proxy by efficiency indices’ (p. 55-59). Their research suggested that there was enough of a relationship between “financial ratios and bank efficiency” and recommended that financial ratio analysis was the more useful of the two whereas efficiency analysis should also be deployed but in an auxiliary fashion in tandem with financial ratio analysis by government departments that are in charge of rules and regulations for the banks and also by the managers within the bank.

Summary

The above literature review highlights some of the major methods of financial analysis and evaluation that are used by both business managers and independent investors. These techniques include financial statement analysis, trend analysis, descriptive analysis and most importantly ratio analysis. Ratio analysis is reviewed in detail as it is the subject of this dissertation. Different ratios are defined and analyzed such as the current ratio, the total debt to total asset ratio and the debt to equity ratio and how these ratios are interpreted and compared for a company. The analysis involves either another company or different year data for the same company. The idea is that ratios in themselves are meaningless unless a point of comparison exists between these ratios to be related to.

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