Financial Analysis of Small Scale Cattle Fattening Enterprise in Bama Local Government Area of Borno State, Nigeria

Abstract

This study was conducted to determine the financial analysis of Small-Scale beef Cattle enterprise in Bama Local Government Area of Borno. Purposive method of sampling was use to select the two districts based on the prevalence of Cattle Fattening Enterprise. The second stage sampling involved random selection of 45 fatteners from a sampling frame of 450 sample frame. The data was collected through the use of structured questionnaire. The data collected include information on the output and the inputs used and their prices using the questionnaire method of data collection. The data collected were analysed using the Net farm income analysis, gross profit margin ratio, current ration and debt/asset ratio. The result of the Net farm income analysis showed ?208,310.00 per head of cattle fattened. The result of the gross profit margin ration revealed a ratio of 0.43:1, implying that for everyone naira invested in the fattening enterprise, 43 kobo will be realized. Similarly, the result of the current ration revealed a ratio of 172:1, implying that the current assets can more than pay for the current liabilities in the event of bankruptcy. And the debt/asset ratio indicates the ratio of 6032:1, implying high solvency. Therefore, the study revealed that the small-scale cattle fattening enterprise is profitable and viable venture. The main constrain militating against the smooth operation of the enterprises is the lack of access to formal credit facilities. This implies that the small fattening enterprises have no access to any formal credit institutions in the study area.

Keywords: Financial analysis, profit ratio, cattle fattening enterprise.