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Analysis And Interpretation Of Financial Statement As A Managerial Tool For Decision Making
[A CASE STUDY OF NWOKEJI URBAN PLANNING AND ARCHITECTURAL STUDIO [NUPAS]]
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1.6 Significance of the Study
The study of
the use of financial statement analysis and interpretation in management
decision is meant to contribute immensely to sustained business
operations in selected firms south south region and general growth in
business, be it private or public. The study shall be beneficial in the
following ways:
i) It will redirect management on the need for the
use of financial statement analysis and interpretation of rational
investment decision.
ii) It will inform management on the possible
and available investment ratio, their functions and uses for a greater
evaluation of a company’s capabilities and profitability.
iii) The
work will also serve as a reference material to other persons who will
conduct studies in similar areas both within and outside the university.
1.7 Scope of the Study
The study is conducted to cover selected firms both in South- South region.
However,
this study is conducted to cover the use of financial statement which
includes; (Balance sheet, income statement, statement of cash flow and
statement of retained earnings) analysis civil interpretation management
decision.
1.8 Limitation of the Study
The research work has some
limitations due to some problems encountered from the sources of
collecting useful materials also some unforeseen circumstances which
posted as a threat during preparation of this research project includes:
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TIME: A research of this kind would require enough time to cover many
areas of activity effectively, but since the researcher is a student
with other classroom works to do, the time allocated for the study was
limited.
- FINANCE: During the course of this research, another
stumbling block. Judgment financial resources was encountered. The
researcher has to make due with little financial provision available to
achieve a qualitative and acceptable research finding.
- Health was
also a limiting factor, for instance, the researcher falling ill in the
cause of the study, which stopped the research for some time.
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TRANSPORATION: The source of collecting useful material or information
is far and the transport logistics expensive, in some cases, the journey
was fruitless if the staff was not available.
1.9 Definition of Terms
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RATIOS: A ratio is the relationship between two amounts that results
from dividing one by the other. It is an accounting term used to
describe the financial index which compares two financial variables such
as current assets and current liabilities.
Examples of ratios are quick ratio, and test etc.
* ACCOUNTING RATIOS: “they are the relationship between figures expressed as ratiosâ€
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INVESTMENT DECISIONS: This relates to allocation of capital and
involves decisions to commit funds to long term assets, which will yield
benefits in future.
* RATIO ANALYSIS:
It is an analytical tool designed to identify significant relationships between two financial statement amounts.
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SECURITY: Security is a financial asset which earns a fixed and/or
variable periodic income till terminal maturity period if any.
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ABSRACT - [ Total Page(s): 1 ]AbstractFinancial Statement Analysis and Interpretation is a very vital instrument of good management decision-making in business enterprise. Good decisions ensure business survival, profitability and growth. Without financial statement analysis in investment decisions, an enterprise is likely to make decisions, which could spell its doom. Poor or lack of qualitative financial statement analysis could lead to investment returns, low profitability and even inability to identify viable investment ... Continue reading---
