ABSTRACT
This study set out to study
the Impact of Financial Statement on Investment Decision. Financial statement
provide the base statement its investment decision it is therefore critical
that it should provide a reliable permanent history of the financial activities
of organization record in archeological diary of measured event presented in
orderly and systematically manner. It readily communicate primarily financial
information in nature investors and other practice who make effective use of
the information for an investment decision posited by (Onukwu 2018) in regard
to financial liquidity, profitability and ability of an entity, is an
indication that these information posited to be presented in publications are
the balance sheet, profit and loss account and cash flow statements in which
case presented in an accounting manner and ethics. Financial statement in
accounting formation is an information needed by varieties of uses classified
into internal and external users as posited by American Institute of Chartered
Public Accounting (AICPA) is an evident which reveal the relative importance of
such information to government present and potential direct financial interest
as posited to ‘Peter” indicated the statement report shall use all disclosure,
materiality, consistency, conservation, and formation according to Paul (2019).
Guiding the financial statement analysis instituting comparativeness is the
legal frame work defining its requirement disclosure to the consumption of its
users.
CHAPTER ONE
1.1 BACKGROUND OF
THE STUDY
Corporate organizations owe a duty to fully disclose matters
concerning their operations so as to aid investors in making investment
decisions. Both large and small organizations in addition to satisfying the
legislating requirement tend. to retain existing investors and to attract
potential ones through the publication of their financial statements where the
capital stock of a corporation is widely held and its affairs are of interest
to general public. The discussions and illustrations of the study will be
centered on the financial statement presented to shareholders and also
available for potential investors, bond holders and trade creditors as a tool
of information for investment decision. Financial statement based on result on
past activities are analyzed and interpreted as a basis for predicting future
rate of returns and assessment of risk. Financial statement provides important
information for a wide variety of decision, investors draw information from the
statement of the firm in whose security they contemplate investing. Decision
makers who contemplate acquiring total or partial ownership of an enterprise
expect to secure returns on their investment such as dividends and increase in
the value of their investment [capital gain]. Both dividends and increase in
the value of shares of company depends on the future profitability of the
enterprise. So investors are interested in future profitability. Past income
(dividend) data are used to forecast returns for future investment and increase
in share prices.
Managers are responsible for
the overall performance of the firm they make or take decision in relations to
available information; therefore they need relevant information readily made
available to make an effective decision for the purpose of this research.
1.2 STATEMENT OF THE RESEARCH
PROBLEM
The problem confronting most
business organization and investors are in the area of the area of evaluation
of financial ratio is often negelected until a problem occurs. The basic
analytical tools for the comparative income statement, profit and loss account
and balance sheet. It is observed that both investors and manager are either
not aware of the relevance or otherwise issue it source? In addition to lack of
adequate valuation statement “Fact information” from business to investors
there is the lack of analytical intellect on the part of the investors to
access the reliability of financial statement. Also the intention of the study
the financial statement and trend to future timely present figures and the
figure only have meaning in relation to when compared with other fact. However,
these problems observed in the preceding paragraph tend to scare away the both
existing and potential investor who rather prefer to hold liquidity than
investing in business organization that are surrounded by bond of uncertainty
until a specific techniques are developed to mean sure liquidly, profitability,
solvency etc. The interest of this study will be clustered around the financial
statements presented to the shareholders, investors, bond holder, and trade
creditor, as important information for investment decision. Finally it is
beyond the scope of this study to adequately look into the entire above
mentioned problem and to suggest possible solution will reveal key factors
responsible for under capacity utilization of financial statement in corporate
investment and the relevance of the financial statement in inducing on
effective decision making in business of all kinds.
Chapters: 1 - 5
Delivery: Email
Delivery: Email
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