THE ROLE OF FINANCIAL STATEMENT AS BASIS FOR MANAGEMENT DECISION (A STUDY OF CHAMPION BREWERIES, UYO)
TABLE OF CONTENTS
Title page – – – – – – – – –
Certification – – – – – – – – i
Dedication – – – – – – – – – ii
Acknowledgment – – – – – – – – iii
Abstract – – – – – – – – – iv
Table of contents – – – – – – – – v
CHAPTER ONE: INTRODUCTION
1.1 Background of the study – – – – 1
1.2 Statement of the problem – – – – – 3
1.3 Objectives of the study – – – – 4
1.4 Research questions – — – – – 5
1.5 Research hypotheses – – – – – 6
1.6 Significance of the study – – – – – 6
1.7 Scope of the study – – – – – 7
1.8 Limitation of the study – – – – 7
1.9 Definition of terms – – – – – – 8
CHAPTER TWO: REVIEW OF RELATED LITERATURE
2.1 Introduction – – – – – – – 10
2.2 Nature of accounting – – – – – 12
2.3 Nature of financial report – – – – – 15
2.4 Element of financial statement – – – – 16
2.5 The Manipulation of financial statement – – 17
2.6 Decision Making – – – – – – 21
2.7 Stages of Decision Making – – – – – 22
2.8 Factors affecting the survival and growth of SMES 26
2.9.1 Usefulness of funds Accounting Information and effect on Decision Making – – – – – – 24
CHAPTER THREE: RESEARCH METHODOLOGY
3.1 Introduction – – – – – – 26
3.2 Area of the study – – – – – – – 26
3.3 Population of Study – – – – 26
3.4 Sample determination and sample technique- – – 27
3.5 Source of data – – – – – – 28
3.6 Method of Data Collection – – – – – 29
3.6 Data presentation and Analysis – – – 30
CHAPTER FOUR: PRESENTAITON, ANALYSIS AND INTERPRETATION OF DATA
4.1 Introduction – – – – – – 31
4.2 Data analysis and results – – – – 31
4.3 Test of Hypothesis – – – – – – 35
4.4 Discussion of findings – – – – 40
CHAPTER FIVE: SUMMARY, CONCLUSION AND RECOMMENDATION
5.1 Introduction – – – – – – 41
5.2 Summary – – – – – – – 41
5.3 Conclusion – – – – – – 43
5.4 Recommendations – – – – – – 44 REFERENCES
APPENDIXES
CHAPTER ONE
INTRODUCTION
1.1 Background of the study
Even business prepares profit or loss account or income statement to ascertain the net result of financial working of the business whether it has earned some income or profit or sustained any loss. It also prepares statement of financial position to fine out the financial position of the business. Profit and loss account or income statements and statement of financial position are known as financial statements.
Gautam (2007), sees financial statement as financial information relating to the financial position of any firm; when presented in a concise and capsule form. Beside profit and loss account and balance sheet, some other statements are also prepared for driving certain conclusions. A schedule of current assets and liabilities of two years may be prepared to know the change in working capital. Similarly a fund flow statement and cash flow statement may also be prepared to ascertain the future estimate of cash receipt and payment.
Thus, financial statement include: profit and loss account, income statement and balance sheet along with certain schedules and statements. Ezeamama (2010) is of the opinion that rational decisions have to be taken to manage modern business successfully and for this rational decision to be taken in line with the firms objectives. Some analytical tools ought to be available and used based on the strength and weakness of the firm are revealed in its financial statements. The nature of financial statement is that financial statements always relates to a past period and hence there are called historical documents. Financial statement expressed in monetary terms and it indicates profit abilities of the business through statement of financial position.
Financial statement are analyzed in other to use the information in financial statement to ascertain the profitability and financial soundness of the firm, to judge the managerial efficiency for inter form comparison of similar nature and to make valuable for lost.
According to Romi Aborede (2006), financial statement need to be interpreted for better understanding and analysis and it can thus be interpreted using individual items contained in financial statement or/and using ratios computed from items contain in the financial statement (ratio analysis). It can therefore be seen that financial information is very effective and essential in making investment decisions in an organisation be it public or private.
1.2 Statement of Problems
Several investment decision tools are used in financial statement of firms and these has been used for several investment decision, which most often pays off bearing in mind the definition of what a financial statement is. It is important to note the various roles it plays in making decision.
However, the problems encountered by these investors include, whether these financial statement represent a true and fair view of what it expected to represents enterprises, which can convenience a person that deductions made base on the financial statement is not mis-leading. Who are taking decision on a daily basis? Position of the corporate organization.
1.3 Objective of the study
The objectives of this work or study are as follows:
- To identify the relationship between financial statement and management decision
- To identify factors influencing management decision on financial statement.
- To highlight the various tools used in management decision on financial statement
- To evaluate the impact of financial statement in management decision making
- To highlight the problems associated with financial statement in management decision
1.4 Research questions
The following research questions were administered:
- Does statement of financial position have anything to do with management decision?
- Is there any tools used in management decision on financial statement?
- Is there any problem associated with management decision on financial statement?
- Does financial statement have any relationship with management in making decision?
1.5 Research Hypothesis
Ho: Statement of financial position does not work hand in hand with management decision.
Hi: Statement of financial position work hand in hand in management decision
Ho: They is no problems associated with financial statement on management decision.
Hi: There are problems associated with financial statement on management decision making.
1.6 Significance of the study
This study will be of great help to the prospective investors and other interested parties of the general public so as to know how to study the financial report of a business firm in order to make a decision a to whether or not to invest in such firms.
It will help the government to determine the taxation when due and as well as to determine if all the company’s income has been included in the computation of taxes. By doing this they will be an improvement in the overall assets and liabilities management and the management will also upgrade assets quality and lower cost of funds.
1.7 Scope of the study
