ABSRACT
This study seeks to determine the role of financial ratios on business decisions of money deposit banks listed on the Nigeria Stock Exchange (NSE) from 2005-2013. There were three ratios used which were selected based on CAMEL ratio. Capital adequacy ratio was the dependent variable. The explanatory variables are liquidity ratio and profitability ratio. Liquidity ratio includes; cash & cash equivalent/ Total Liabilities, Loan and Advances/Total Assets, Loan and Advances/ Total Deposits while profitability ratio includes; Return on Assets, Return on Equity and Net interest income / Loan and Advances. Descriptive methodology, correlation and regression analysis were applied to data obtained from the financial statement of the banks using the Statistical Package for Social Student (SPSS). The result showed a weak and negative relationship among when ratios are considered in isolation but a strong relationship was exhibited when all the ratios were analysed in aggregate. The studies thus conclude that financial ratios can be useful for business decision making when other intervening factors are incorporated.