1.

8 Limitations of the Research

During research, the researcher met some problems. However, he tried to minimize the

effects of those problems that culminate the success of this study. Below are some of the limitations

encountered and how they were controlled: Mostly, the financial statements are prepared on the

concept of historical costs. They do not reflect the values in terms of current costs. Such

information might cause misunderstandings. The financial statements were as interim reports and

not final because of preparation of one year or sometimes half yearly. While the actual profit or

loss could only be known when the business is closed. To overcome of these limitations the

researcher did all possible to minimize the consequences that may result from them. He tried to

minimize cost and find other resources from family and relatives and over worked day and night.

1.9 Definition of Keys Terms

Ratios analysis has been used to assess company performance for almost as long as modern share

markets have been around.

Business performance: is a set of management and analytic processes that enables the

management of an organization's performance to achieve one or more pre-selected goals.

Liquidity: is the ability of a firm to meet its short-term obligations.

Profitability: is a measure of the amount by which a firms revenues exceeds its relevant expenses.

Leverage ratios provide an indication of a companys long-term solvency.

Activity ratios are used to measure the relative efficiency of a firm based on its use of its assets,

leverage or other such balance sheet items.