The role of financial statements in investment decisions

 

Table Of Contents


  • <p> </p><p>Approval page ii<br>Dedication iii<br>Acknowledgement iv<br>Abstract vi</p><p>

Chapter ONE

INTRODUCTION

  • </p><p>
  • 1.1Background of the Study 1<br>
  • 1.2Statement of the Problems 3<br>
  • 1.3Objective of the Study 4<br>
  • 1.4Research Questions 5<br>
  • 1.5Hypotheses of the Study 5<br>
  • 1.6Significance of the Study 6<br>
  • 1.7Scope and Limitation of the Study 6<br>
  • 1.8Definition of terms 7<br>References 9</p><p>

Chapter TWO

LITERATURE REVIEW

  • </p><p>
  • 2.0INTRODUCTION 10<br>
  • 2.1Historical Development of Business Financial State Analysis<br>and Financial Ratios 12<br>
  • 2.2Accounting Information Tools 14<br>2.
  • 2.1The Balance Sheet 15<br>2.
  • 2.2The Profit and loss Account (Income Statement) 15<br>2.
  • 2.3Statement of Accounting Policies 16<br>2.
  • 2.4Director Report 16<br>2.
  • 2.5The value Added Statement 17<br>2.
  • 2.6The five year financial summary 17<br>2.
  • 2.7The Auditor’s Report 17<br>2.
  • 2.8Notes on the Accounts 17<br>2.
  • 2.9A Cash Flow Statement 17<br>
  • 2.3Quantitative Characteristic of Accounting Information 18<br>10<br>
  • 2.4Use of Accounting Information by decision makers 21<br>
  • 2.5Objective of Accounting Information 22<br>
  • 2.6Importance of Accounting Information 24<br>
  • 2.7Users of Accounting Information and their Objective 25<br>
  • 2.8Financial Ratio Analysis 27<br>References 36</p><p>

Chapter THREE

RESEARCH METHODOLOGY

  • RESEARCH DESIGN AND METHODOLOGY</p><p>
  • 3.1Research Design 37<br>
  • 3.2Sources of Data 37<br>
  • 3.3Research Instruments 38<br>
  • 3.4Reliability / Validity of research Instrument 39<br>
  • 3.5Population of Study 39<br>
  • 3.6Sample and Sampling Technique 40<br>
  • 3.7Administration of Research Instruments 44<br>
  • 3.8Method of Data Analysis 45<br>
  • 3.9Decision Criterion for Validation of hypothesis 46<br>References 47</p><p>

Chapter FOUR

DATA PRESENTATION AND ANALYSIS

  • AND ANALYSIS</p><p>
  • 4.1Data Presentation 48<br>
  • 4.2Data Analysis 49</p><p>

Chapter FIVE

SUMMARY, CONCLUSION AND RECOMMENDATIONS

  • OF FINDINGS, CONCLUSION, RECOMMENDATION</p><p>
  • 5.1Summary of Findings 74<br>
  • 5.2Conclusion 75<br>
  • 5.3Recommendations 77<br>Bibliography 79<br>Appendices 81</p> <br><p></p>

Project Abstract

<p> The research topic of this study is <em><strong>“The role of financial statement in investment decisions”</strong></em>&nbsp;– a study of selected banks in Enugu metropolis. The purpose is to identify the relationship between financial statement and investment decisions, and the impact of financial statement in investment decision making and also to know if investment decisions depends solely on financial statement. The study population is 125 persons who are the member of staff of the five major selected banks. Using the Yaro Yamani formula, the sample size calculated gave (95). The formulated hypotheses were tested using Z test with statistical technique at 5% level of significance. The researcher also made use of primary methods of data collection which included questionnaires and personal interviews. Also the secondary methods of data collection used are library research of relevant materials and existing documents from the selected banks. The researcher recommends that banks in Enugu metropolis should consult the financial statement before making investment decisions, and also it is recommends that all interested parties to financial statement should used required financial ratio analysis for decision making. <br></p>

Project Overview

<p> </p><p><strong>INTRODUCTION</strong></p><p><strong>1.1 BACKGROUND OF THE STUDY</strong></p><p>Every business prepares profit and loss Account or income statement to ascertain the net result of financial working of the business whether it has earned some income or profit or sustained any loss. It also prepare balance sheet to find out the financial position of the business. Profit and loss account or income statement, retained earnings statement and balance sheet are known as financial statements.<br>Gautam (2005) sees financial statement as financial information which is the information relating to the financial position of any firm; when presented in a concise and capsule form. Besides profit and loss account and balance sheet, some other statements are also prepared for deriving certain conclusions. A schedule of current assets and current liabilities of two years may be prepared to know the changes in working capital. Similarly a fund flow statement and cash flow statement may also be prepared to ascertain the future estimate of cash receipt and payment. Thus, financial statement include: profit and loss Account, income statement and balance sheet along with certain schedules and statement.</p> <br><p></p>

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