TREND ANALYISIS OF LIQUIDITY IN OMO MICROFINANCE INSTITUTION

Abstract

Liquidity analysis is one of the most important contents in institutions financial analysis. Many institutions worldwide lack a formal and suitable financial policy on the administration and management of liquidity. For financial institutions experiencing fast paced growth like OMO microfinance institution, the establishment of norms and policies to administer liquidity is nonetheless crucial for the institutional viability as much in the short term as in the long term. Liquidity position is commonly measured by financial ratios that are conventional ratios (based on balance sheet and income statement) and cash flow ratios. The management and formulation of policies in liquidity becomes relevant. Data for the study will from secondary sources and various ratios and indicators will be used to measure the liquidity performance of the OMO MFIs.Nine years data from 2006 to 2014 would used to see the trend analysis of liquidity. In connection with liquidity, OMO MFIs lack strong position to effect immediate obligations. In this study, an attempt has been made to fill in the existing knowledge gap by trend analysis of liquidity in OMO micro finance institution.