Investment Decision Making Essay

CHAPTER FIVE

SUMMARY, CONCLUSIONS, ANDRECOMMENDATIONS

Introduction

This chapter summarizes findings for the study, draws conclusions, and makes interesting recommendations.

Summary of Findings

This study set out to study the role of financial statement in investment decision making. (A case study of First Bank of Nigerian plc.). From the test of hypotheses, we discovered the following; 1. Financial statement is used to be relied upon in investment decision making. 2. Financial statements are useful for forecasting company’s performance. 3. There is a positive and significant relationship between financial statement and investment decision making. 4. Financial statements provide various facts of a business such as, accurate records of its income

1. Every financial institution should ensure that all material facts as regard the assets and equity of the organization should be reflected in their yearly financial statement. As such, the financial institutions should adhere to the demand of subjecting their financial statement to statutory audit as a way of authenticating their contents. 2. The financial statement should be prepared using such a language and terms a layman can understand because the technical terms do not mean much to the investors. These should be prompt provision of the financial statement at the end of each financial year and the profit after tax should be reported precisely and correctly with actual figures and avoid use of percentage to enable any layman make good investment decision. 3. Investment decision should not be on a vacuum or rule of thumb rather, the financial statement should be used as the bedrock and the volume of liabilities acquired by financial institutions should be minimal and invested wisely to avoid its negative effect on the profit of the bank which will discourage prospective investors. No investment decisions on a financial institution should be taken without the consideration of a company’s financial statement. 4. Banks and companies should carry out educational enlightenment programme from time to time to enable investors understand the financial report fully. Investors should attach much importance to the annual reports so that banks and companies can really know the extent of their responsibility in preparing the financial statement. 5. Banks and companies should sponsor research into the information needs of their investors and how best to communicate this information to them. There should be a review of annual report of banks and companies by the authority concerned, in