Neat Usefulness Of Financial Statements In Making Investment Decisions

Financial statements therefore are a formal record of the financial activ-.

Usefulness of financial statements in making investment decisions. They present an accurate picture of the activities of the business over a defined period. FI usefulness refers to information capable of making a difference in the decision-making of users of financial statements because it has confirmatory value predictive value or both Frendy. This study intended to investigate the role of financial statements in investment decision making.

The study questions were to examine how financials aid investors in decision making evaluate the performance of a company for investment decision making and appraise the fundamental use of financial statement information. 11 BACKGROUND OF THE STUDY. The balance sheet income statement cash flow statement and statement of owners equity each offers unique insights.

How much is the profit and loss in their business. 12 STATEMENT OF THE PROBLEMS. They also need it to understand the dividend payout ratio and forecast the future dividends 7 To the Creditors and the Lenders.

Financial statements are useful for forecasting companys performance. Financial statements are useful because Quantitative data are helpful in making rational economic decisions ie in making choices among alternatives so that actions are correctly related to consequences 2 The characteristic of associating the pur-pose and value of accounting information directly with decision-making differs from. Financial statements provide various facts of a business such as accurate records of its income and expenses and also its assets and liabilities.

The research that forms the basis for this report is motivated by. Second to gain an understanding of how and why annual financial statements are decision-useful for investor decision making including the types of information relied upon the authors conducted a series of interviews with investors regulators and practitioners. A companys financial statements are analyzed internally by management and externally by investors and creditors.

Prospective investors use financial statements to perform financial analysis which is the basis of their decision to invest or not in your business. The methods used in analysing this study are simple percentage and chi-square. The usefulness of financial statements to stakeholders is given below thats are.