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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THIS RESEARCH WORK IS ON

Analysis And Interpretation Of Financial Statement As A Managerial Tool For Decision Making (a Case Study Of Nwokeji Urban Planning And Architectural Studio [nupas]

Abstract
Financial  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  opportunities.    The  main  objective  of  this  project  is therefore,  was  to determine  how  firms  could  use  financial  statement analysis and interpretation to aid management decisions and to avert the  problems  highlighted  above.    Primary  and  secondary  data are employed  to  broaden  the  scope  of  this  study.    Primary  data  are sourced  from  questionnaire  responses.    This  provided  data  for  the validation  of  the  hypotheses  tested  with  the  use  of  chi-square  (X2).
The  test  revealed  as  follows:  (1) Significant  difference  between  the returns of the financial statement in Analysis and Interpretation based on management  decision. (2)  Organizational  profitability  has relationship with financial statement analysis and interpretation based management  decision  but  not  significantly.    The  project  concludes that  companies  should  pay  great  attention  to  the  use  of  financial statement  analysis  so  as  to  properly  equip  themselves  with  this invaluable  tool.    The  researcher  recommends  the  following:  (a)
Accountants or financial analysts should not be rushed in collection,preparation,  analysis  and  interpretation  off  financial  statements.  (b) Financial  statements  should  be  made  to  reflect  current  cost accounting  to  eliminate  or  reduce  the  effects  to  historical  cost principle  and  inflation  risk  element.  (c)  A  combination  of  different ratios  should  be  used  in  analyzing  a  company’s  financial  and/or operating  performance.  Proper  use  of  financial  statement  analysis
should  be  made  not  only  in  investment  but  also  in  other  areas  of decision making.

 

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