ANALYSIS OF FINANCIAL STATEMENTS AS AN AID TO MEANINGFUL INVESTMENT DECISION MAKING (A CASE STUDY OF INVESTMENT FIRMS IN ENUGU STATE)

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ANALYSIS OF FINANCIAL STATEMENTS AS AN AID TO MEANINGFUL INVESTMENT DECISION MAKING (A CASE STUDY OF INVESTMENT FIRMS IN ENUGU STATE) (STATISTICS PROJECT TOPICS AND MATERIALS)

 

1.0 INTRODUCTION

Decision making is not the core of every investment activity. A decision is a choice between two or more alternatives. The implementation of meaningful decision gives way for achievement of investment goals and objectives while implementation of wrong decision positively give rise to investment failure. The ultimate objectives for investment are profit maximization and growth thus it becomes necessary that capital decision have to be made and implemented so as to achieve the aforementioned objectives. For a meaningful decision that will be used in these objective for an investment to be made available, analysed and studied and through what is derived, decision is made and implemented wither for action, execution or corrective measures where necessary. One of the important information needed about investment is concerned with financial aspect and the record that contains the financial aspect of an investment is what is referred to as analysis of financial statement referred to as analysis of financial statement analysis. According to financial statement analysis and interpretation for alert investors by C. Chinelo Ikoku, financial statement components are as follows:

1. The chairman board of directors report

2. The auditor’s report

3. Graphs and figures.

4. Table of accounting date. Financial analysis via ratios hence it is sometimes referred to as ratio analysis or accounting ratios analysis interpreting investigation into financial statement. The ratios derived from financial statements are used in three different ways namely:

1. Structural analysis

2. Time series analysis

3. Cross sectional analysis. For investment executions, decision such as buy, certain or sell are necessary. Equally, decision for evaluating management performance, as well as current and future level of risk and profitability is all important. Meaningful decision in all the above mentioned areas will help for a good choice among available portfolio of assets, dividend yield, total return as well as liquidity. In this project study, concentration will be based on such financial ratio as:

a. Profitability ratio

b. Liquidity ratio

c. Asset management ratio

d. Market value ratio

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ANALYSIS OF FINANCIAL STATEMENTS AS AN AID TO MEANINGFUL INVESTMENT DECISION MAKING (A CASE STUDY OF INVESTMENT FIRMS IN ENUGU STATE) (STATISTICS PROJECT TOPICS AND MATERIALS)

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