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Role Of Financial Statement In Investment Decision Making.
[A CASE STUDY OF FIRST BANK OF NIGERIAN PLC]
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1.3 OBJECTIVE OF THE STUDY
The general objective is to ascertain the
role of financial statement in investment decision making. The specific
objective is as follows;
i. To examine how a set of analytical tools
will aid prospective investors in assessing the financial position of
the corporate organization.
ii. To evaluate the performance of a company for investment decision making.
iii. To determine the profitability of the company.
iv.
To appraise the fundamental use of financial statement information,
this is to provide information for investment decision making.
1.4 RESEARCH HYPOTHESE
Hypothesis
according to the English dictionary is an unproved theory, proposition
sent forth as an explanation of something, often as the basis for
further investigation. Hypothesis is the guides for the investigators in
the entire process of research endeavor and they keep the researcher on
the main line of the study, in this research, the following hypothesis
are formulated for the study;
Ho; financial statements are not used to be relied upon in investment decision making in a company.
H1; financial statement are used to be relied upon in investment decision making in a company.
Ho; financial statements are not useful for forecasting company’s performance.
H2; financial statements are useful for forecasting company’s performance.
Ho; financial statement does not determine the profitability of a company.
H3; financial statement determines the profitability of a company.
Ho; financial statement does not project new investors.
H4; new investors are projected by financial statement.
1.4 RESEARCH QUESTIONS
According
to Uzoagulu [1998; 96], research questions guide the researcher in
constructing the questionnaires. Therefore the researcher raised the
following research questions to guide her in constructing her
questionnaire which are instruments in the study. The questions are as follows;
i. To what extent is financial statements used in the investment decision making in a company?
ii. Are financial statements useful for forecasting company’s performance?
iii. Do financial statements determine the profitability of an organization?
iv. Do financial statement projects new investors?
1.6 SIGNIFICANCE OF THE STUDY
This
study will be of immense benefit to banks by improving the banking
performance financial analysts, investors, companies and financial
organizations. This is because the study intends to help these
stockholders in decision making. The study will help in widening
knowledge financial statement in investment decision making, it will
also make the organization to appreciate the importance of sound
financial statement in the provision of information necessary for
decision making. It will review the improvement in the organization
handling the financial statement and show equally the ways through which
improvement could be accomplished finally this research will equally
serve as a reference to students in this noble institution and other
school who may be interested to embark on a further research study of
this nature and above all, report of this study shall definitely add to
existing knowledge in research methodology.
1.7 SCOPE OF THE STUDY
This
study will be limited to a geographical entity known as Nigeria and
specifically first bank plc. Anyigba branch, kogi state of Nigeria.
1.8 LIMITATION OF THE STUDY
There
are some limitations encountered by the researcher in the process of
this research which limited the scope to only first bank plc. Anyigba
branch, some of the limitations are as follows;
i. Uncooperative
attitudes of the respondents; the researcher could not get some
necessary information from the respondents because of their negative
attitude in their response to the oral interview with the bank officials
and the questionnaires.
ii. Time constraints; despite the time
provided, it was not still enough for the researcher to go all the
relevant places like banks and company etc to get relevant information
and due to the combination of project and academics work.
iii.
Financial constraints; financial constraints is also another factor that
limited the researcher to go to many branches of first bank and even
other banks and organizations. The researcher lacked finance for
transportation, electronic library etc. and as such was limited to only
Anyigba branch of first bank plc.
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ABSRACT - [ Total Page(s): 1 ]ABSTRACTCorporate organizations owe a duty to fully disclose matters concerning their operations so as to aid investors in making investment decisions because Investment decision makers rely on information obtained from financial statements to predict future rates of return. Without the financial statement, there will be a problem of how to determine the profit of a company, and evaluation of performance of a company. The general objective is to ascertain the role of financial statement in inves ... Continue reading---
