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Financial Statement Analysis: A Study of Shareholders’ Investment Decisions in Nigerian Deposit Money Banks

Okeke, Nneka Maureen PhD, Ubani Iheanacho George PhD

Abstract

The study determined the effect of financial statement analysis on shareholders’ investment decision in deposit money banks in Nigeria. Firm profitability and liquidity was used as the independent variables. Multiple regressions were used to test the two hypotheses. The study revealed that deposit money banks with higher profitability, as measured by return on equity have significant effect on shareholders’ investment decision. Also, liquidity analysis has significant effect on shareholders’ investment decision among listed deposit money banks in Nigeria. The effective effect of profitability analysis on shareholders’ funding selection stems from buyers looking for banks with sustainable and robust profitability. Higher earnings no longer best offer dividends but additionally indicate effective control and a sturdy market role. Banks demonstrating steady profitability are probably to draw buyers aiming for long-term capital appreciation, consequently definitely influencing equity shareholding. In end, liquidity, and profitability analyses play pivotal roles in shaping shareholders' investment decisions among listed DMBs in Nigeria. Based on the findings, the study recommended among others, that to attract and maintain investors, banks have to focus on enhancing operational effectiveness, discovering revenue diversification, and transparently communicating profitability drivers, making sure a sustained and resilient financial overall performance that aligns with shareholder expectations.

Keywords

Financial statement analysisShareholders’ investment decisionProfitability and

References

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