| dc.description.abstract | Financial ratios are tools for analyzing and interpreting financial statements,
these ratios are categorized into five sections if it were a for profit enterprise. In not for-profit institutions, four sections of ratios can be used to analyze financial
statements. These are liquidity ratios, solvency ratios, asset turnover ratios,
surplus/profitability and equity ratios. The researcher observed that in the Seventh-day Adventist institutions in Zimbabwe only three ratios were used: the two liquidity
ratios and self-support ratio which are unique to the church. It is therefore against this
background that the researcher investigated the usefulness of the additional ratios in
the analysis of the institutions’ financial statements.The study examined the respondents’ perceptions on the usefulness of the
additional ratios and also intended to suggest additional ratios that would be
considered by the institutions under study in the analysis and interpretation of the
financial statements to enhance the effectiveness in determining the financial
performance of the selected Seventh-day Adventist institutions in Zimbabwe.
The survey research strategy was used to collect data and the research was a
cross sectional study which sought to identify ratios which can be used in analyzing
and performance measurement of the financial statements. The study utilized both
descriptive and inferential statistics to examine the usefulness of adopting additional
ratios.
Results from the study showed that liquidity ratios, solvency ratios, asset
turnover and profitability ratios were equally important for adoption in the Seventh-day Adventist institutions. In addition, there are significant relationships between
liquidity, solvency as well as profitability ratios and financial performance
measurement. However, only profitability/surplus ratios are significant predictors of
financial performance measurement.
The study therefore concludes that there is need for the Seventh-day Adventist
institutions in Zimbabwe, in particular Zimbabwe Union Conference and its entities to
adopt the additional ratios for use in the analysis and interpretation of the financial
statements. These additional ratios being proposed include solvency, asset turnover
and especially profitability. Besides, in faith-based institutions such as the Seventh-day Adventist institutions in Zimbabwe, surpluses are key to financial sustainability. | en_US |
