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The rapid growth in international , and globalization of financial markets and businesses, makes financial reports prepared
in accordance with national accounting standards (Local-GAAP) no longer satisfy the requirements to make international comparison by

As a result of this reality, accounting regulating authorities came out with a solution for the need to harmonized financial statements in a
single set of high quality and comparable transaction in the preparation and presentation of an entities financial statement. These would
have wider acceptance among investors, regulators, auditors, policy makers and financial analysts in both national and international scope

need of high quality financial reporting, International Accounting Standards (IASs) issued and published by International Accounting
Standards Board (IASB) in 2001, and subsequently replaced with international financial reporting standards
(IFRSs) which is poised as universal accounting language required to be adopted by companies regardless of their place of domicile across

Financial reports apart from stating the financial position of an organization , provides other information such as the value added, changes
in equity if any and cash flows of the enterprise within a defined period time to which it relates (Iyoha and Fabode, 2011). It involves a
process of formally recording the company's financial activities with the use of financial reports or statements, which includes all the
relevant financial information.
On the 28th of July , the Nigerian Federal Executive Council accepted the recommendation of the committee on the roadmap to the
International Financial Reporting Standards (IFRS) In Nigeria. In that it will be in the interest of the Nigerian economy for reporting entities
in Nigeria to adopt globally accepted, high quality accounting standards by fully adopting the International Financial Reporting Standards
(IFRS) in a phased transition.
Moreover, these standards have the problem of automatic by all countries on account of dierences in background and tradition of
countries, dierences in the needs of various economic environment and the perceived challenges to sovereignty of States in making and
enforcing standards (Fantl,1971). A number of African countries including Nigeria, Ghana, Sierra Leone, South Africa, Kenya, Zimbabwe
among others have adopted or declared intentions to adopt the standard. This development is welcomed considering the fact that the
quality of financial reporting is indispensable to the need of users who requires them for investment and other decision making purposes.
To prepare and audit financial statements, some standards have been put in place by appropriate bodies set up for the purpose of
encouraging uniformity and reliability. It also reduces the cost of preparing different version of financial statements where an organization is
a multi-national. Accounting standards ensures that important matters regarding preparation and presentation of financial statements as
well as auditing same are not left to whim of the preparers and auditors.
Financial reports can only be regarded as useful if it represents ‘economic substance' of an organization in terms of relevance, reliability and
comparability (Penman, 1984). The implementation of IFRS would reduce information irregularity and strengthens the communication link
between all stakeholders (Bushman and Smith, 2001). It also reduces the cost of preparing different version of financial statements where
an organization is a multi-national (Healy and Palepu, 2001). Accounting standards ensures that important matters regarding preparation
and presentation of financial statements as well as auditing same are not left to whim of the preparers and auditors. Most companies have
significant international operations, multiple regulatory and capital market considerations, complex organizational structures (often
including multiple subsidiaries and joint venture relationships), and global competitors who already are reporting under IFRS. Also, some of
these companies are listed on other stock exchange markets outside Nigeria which requires reporting under IFRS. The companies in these
circumstances have discovered compelling reasons to adopt IFRS even before it was mandated, more so when one considers the huge
impact made by the income from foreign activities. Before IFRS era, most countries had their own standards with local bodies responsible
for developing and issuance. The Nigerian Accounting Standards Board (NASB) was responsible for developing and issuing standards
known as Statements of Accounting Standards (SAS) and in the new dispensation, the body was renamed Financial Reporting Council (FRC)
of Nigeria as the regulatory body overseeing the implementation IFRS.


Each person like every business requires some measures of both financial position and financial performance in assessing his financial
conditions. The financial position depicts one's wealth at certain point in time while one's financial performance describes once.
Financial statements according to Illoumezie (2006:33) are like compasses “which navigators use to locate their bearing and find direction”.
People use them to gauge their financial positions at various points in their lives in order to judge their progress towards their financial
Financial statements according to meigs and meigs (1981:28) refers to reports which summarize the financial position and operating results
of a business (balance sheet and income statements). It referred to as general purpose that satisfy the need of many groups generally called
stakeholders. These groups are particularly concerned with the risk inherent in and returns provided by their investments, and who require
accounting information to enable them assess the ability whether they should buy, hold and sell their investments.
According to Anayaogu (2002:14) financial accounting provides information to eternal decision makes such as shareholders government,
creditors, employees etc, these are people with whom or from whom money is ultimately paid or received. Anayaogu (2002:20) also states
that records of financial accounting includes various ledges accounts, profits and loss accounts, balance sheet and other financial records.
These records are intended to show the strength, progress, portability, management effectiveness and stewardship.
Financial statement are the means of communicating to interested partners information or the resource, obligation and performance of the
reporting enterprise in a simple, clear and understandable form to all its user with such attributer of relevance to decision reliability,
consistency and comparability materiality efficiency and understandability.

the first step in accounting process. At the close of financial period, the stakeholders such as investors of a company naturally desires to
ascertain the following:
(a) The result of the company's operations for the period.
(b) The resources and hostilities of the company over the period in question.
(c) Wealth created by the company and how it has been distributed.
(d) Financial resources acquired and how they have been expanded.
Thus, published financial statement prepared under companies and allied matter decree (CAMA) 1990 supplies information about the
above. As a matter of fact, shareholders of any corporation would require annual corporate report published about the entity and which
must be relevant, sufficient and reliable.
One of the tools for the analysis of financial statements is the ratio analysis. This analysis describes a particular relationship between
elements of one with the other elements in a financial report. Financial statements referred to is the balance sheet and income statement.
Balance sheet shows assets, debt and the company's capital at a given time. Income statement reflects the results achieved by the company
within a certain period (usually one year).
An accountant interpret the financial statement so as to evaluate the financial soundness and stability, the liquidity position and the
profitability or the earning capacity of borrowing concern. Analysis of financial statement is necessary because it helps in depicting the
financial position on the basis of past and current records. Analysis of financial statement helps in making the future decision and strategies.
Therefore, it is very necessary for every manufacturing companies to make financial statement and to analyze it. Finally, once the
financial decisions have been made, accounting tools are used to evaluate the success or failure of those decisions.
Income Statement
The most common and o-used financial statement is the income statement, which is a fairly simple notion on the surface. It begins with
revenues, or all raw cash inflows, the firm generated over a period of time. Then, once all costs associated with those sales are removed, the
so-called bottom line is obtained. This latter figure is most often labeled net income. Therefore, the income statement attempts to obtain a
reasonable estimate of how much of the company's revenues were retained as income throughout the accounting period.
Balance Sheet
Anyone who has seen a balance sheet can quickly understand the meaning of the name. There are two sides and, well, they must balance.
Each side must sum to an equal value. The variables on the le-hand side take many forms but are all some type of asset. An asset is
anything the firm owns, likely in hopes of using it to generate revenue.


The analysis of the financial statements and interpretations of financial results of a particular period of operations with the help of ‘ratio' is
termed as “ratio analysis.” Ratio analysis used to determine the financial soundness of a business concern. Alexander Wall designed a
system of ratio analysis and presented it in useful form in the year 1909.
Liquidity Ratio
The liquidity of a company is measured with the use of some financial ratios refers to as liquidity ratio. These groups of ratios measured the
ability of the firms to meet its current obligations (liabilities).
Profitability Ratio
Profitability is the ability to make profit from all the business activities of an organization, company, firms, or an enterprise. It measures
management efficiency in the use of organizational resources in adding value to the business.
Manufacturing company refers to those companies which involve in the manufacturing and processing of items and indulge in either
creation of new commodities or in value addition. The manufacturing companies accounts for significant share of the industrial sector in
developed countries. The final product can either serve as finished good for sale to customers or as intermediate goods used in the
production process.
Activities basically fall into four different categories, known as the manufacturing cost hierarchy. These categories are generally accepted
today but were first identified by Cooper (1990). The categories of activities help to determine the type of activity cost driver required.
The categories of activities are:

Unit level activities. The costs of some activities (mainly primary activities) are strongly correlated to the number of units produced. For
example, the use of indirect /consumables tends to increase in proportion to the number of units produced.
Another example of a unit level activity is the inspection or testing of every item produced, if this was deemed necessary or, perhaps more
likely, every 100th item produced.Batch level activities. The cost of some activities (mainly manufacturing support activities) are driven by the number of batches of units
produced. Examples of this are :
• Material ordering–where an order is placed for every batch of production
• Machine set-up costs–where machines need resetting between each different batch of production
• Inspection of –where the first item in every batch is inspected rather than every 100th item quoted above.Product level activities. The costs of some activities (often once only activities) are driven by the creation of a new product line and its
maintenance, for example, designing the product, producing parts specifications and keeping technical drawings of products up to date.
Advertising costs fall into this category if individual products are advertised rather than the company's name.Facility level activities. Some costs cannot be related to a particular product line, instead they are related to maintaining the buildings
and facilities. Examples are the maintenance of buildings, plant security, business rates, etc. Also included in this category are salaries, such
as the production manager's. Advertising campaigns that promote the organization would also be included.
Indeed, Solid mineral is a sector that has been virtually neglected and could, if properly managed, bail out the country from its present
economic strait jacket.
It is no longer news that the price of crude oil is going down in the world market. The advanced countries that happen to be major buyers
are discovering the best alternatives to energy instead of petroleum products.
Some of the challenges confronting the Nigerian mining sector include the quality of the data available to determine the size of what
Nigeria has and how Nigeria can use bankable data for potentials investors. There is need for the legal and regulatory authorities to have
effective monitoring mechanisms to effectively monitor what is available and how they are being exported.
Successful governments have talked about the diversification of the economy, but they obviously lack the political will and necessary plan
to implement any concrete plan of action in this regard
Revenue from the oil export was high and this led to increase in oil exploration and exploitation. A consequence of this was neglect of solid
mineral sub sector leading to decrease in solid mineral production.
The objective of financial statements is to provide information about the financial position, performance and changes in financial position
of an enterprise that is useful to a wide range of users in making economic decisions. Owners and managers require financial statements to
make important business decisions that affect its continued operations. Financial analysis which measure financial performance is then
performed on these statements to provide management with a more detailed understanding of the figures. Furthermore, the rationale of
financial analysis is to diagnose the information contained in financial statement so as to judge the future earning, ability to pay interest,
debt maturities, profitability and sound dividend policy.
the incentives and government assistance to solid mineral companies in Nigeria.
To analyze the financial performance of manufacturing companies in the Nigerian solid mineral sector.
To investigate the source of finance of manufacturing companies operating in the solid mineral sector.
In consideration of the problems identified above, the objective of this research include.
What are the incentives and Government assistance to the solid minerals companies in Nigeria?
What is the financial performance of manufacturing companies in the Nigerian solid mineral sector?
What source of finance are the manufacturing companies operating on, in the solid mineral sector?
The significance of this study is that on its completion, the following benefits will be derived:
The study will help manufacturing companies in the solid mineral sector and others to know how ratio analysis can help them understand
the financial contained in financial statements and enhance their firm's decision.
The findings of the research and the supportive reference materials will be of immense help to students and other researchers to investigate further in the area of study.
The study will encourage businessmen, investors, managers, and government authorities to appreciate quantitative techniques like
financial ratios.
The study is on analyses of financial statement of manufacturing companies in the solid mineral sector in Nigeria. The study focuses on the
financial performance of solid mineral in Nigeria, government incentives and assistance to solid mineral sector in Nigeria, the source of
finance manufacturing companies are operating on. Limitations of the study are hindrances or obstacles witnessed by the researcher in the
course of the study.
In view of the impossibility of covering every type of financial statement, this study is therefore restricted to the analysis of the income
statement and the Balance Sheet by means of financial ratios. However, other analytical techniques such as liquidity ratio, profitability ratio
and termed ratios would also be explained and illustrated.
Accounting: The process of recording, summarizing, analysis and interpreting financial (money-related) activities to permit individuals and
organizations to make informed judgments and decisions. Dansby (2000).
Balance Sheet: A financial statement containing assets, liabilities, and owner's equity or capital at a particular data or at the end of a
particular period, to show the financial position of a organization. Akpakpan, (2002).
Financial Ratio: A proportion, fraction, or percentage expressing the relationship between one item of financial statements and another
item in the same financial statements. Igben, ().
Financial Statement: Quantitative information on the economic activities of an organization prepared to show the result and the financial
position of the entity, oen presented in terms of Z Balance Sheet, Income Statement, Funds flow statement, and so on.
Income Statement: A financial statement oen referred to as the trading and profit loss account, matching revenues against expense to
show the profitability or operational results of an enterprise over a period of time, such as a month or year. Hermanson (1992).
Ratio Analysis: A systematic review of accounting data by establishing relationships among various figures on the financial statements



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