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Financial Reporting As A Tool For Management Decision Making In An Economy

Download complete project materials on financial reporting as a tool for management decision making in an economy chapternone to five.

This particular chapter is an introduction to the topic “financial reporting as a tool for management decision in an economy” and taking management decision in an economy” and taking reynold construction plc, Ibadan as a case study.

To make rational, decision towards achieving the objectives of the firm, the financial managers needs to have certain analytical tools, one of such tools is financial data. Every business firm Prepare financial statement that must at least include the balance sheets and the profit and loss account. The balance sheet the profit and loss account.

The balance sheet shows the result of operations over a particular period. Financial reporting makes use of financial data in the balance sheet and profit and loss accounts to enable users of financial statements gain insight into better understanding of the financial statements.


Title page




Table of contents


1.0 Introduction

1.1 Background of the study

1.2 Statement of the study

1.3 Statement of the problem

1.4 Research question

1.5 Significance of the study

1.6 Definition of terms


2.0 Literature review

2.1 Introduction

2.2 Organizational aims and objectives

2.3 Analysis of financial statement

2.4 Profit and loss account

2.5 Balance sheet

2.6 Financial ratio

2.7 Types of ratio


3.0  Research methodology

3.1  Research design

3.2  Population

3.3  Sample and sampling techniques.

3.4  Instrumentation procedure

3.5  Validation of instrument

3.6  Procedure of data collection

3.7  Data analysis and scoring


4.0 Analysis of data evaluation and interpretation of result

4.1 Introduction

4.2 Questionnaire verification and conclusion

4.3 Test hypothesis


5.0 Discussion, Findings and Recommendations

5.2 Summary







Financial statements can be defined as the total financial information come day to day and periodic transacton of an organization the financial statement of a company represent its certificate of health which share the company’s annual rate of affair by giving the number of the company is engaged and proposed creditor and other third party with whom the company is engaged in transactions, the opportunity of knowing the true position of the company

From the petty cash book, stock inventory, Bank\cash book, income and outgoing cheques registrers, trial balance debtors, schechile profit and loss account and balance sheet etc.

Through the financial statement is always in summary form, the above are some of the source of data or books through which the sourced of data or book through which the financial information are gathered.

As said earlier, the financial statements of a company represent its certificate of health, the past, the present, the future of the company could appraise. In other words, the financial statement mirrors the performance of any organization financially.

In the olden days the nerchant  handles their money themselves when entrepreneurship was still the order of business, only few out of many that has many business use to put a trust worthy member of his family in charge of their business to manage for them.

The case today has taken a different direction entirely. Business owner in most case are not participating in the running of business while some prefer employment other to take good and proper control of their business for them. Reynold construction company plc, Ibadan is one of those company owned by participating and non-participating shareholders.

The individual companies’ government value accountable and financial statements are just at that. Among the first set of companies set up by the Nigeria government in 1951 is a public accounting committee to see how the wealth created by the nation could be generated and managed.

Hence, the importance of financial statement s cannot be over emphasized. We can equally say that if there were no financial statements there wouldn’t be any need of calling of any general meeting.

Financial statements include the following:-

1 Statement of accounting policies

2 The balance sheet\statement of assets and liabilities

3 A profit and loss or income and expenditure account

4 Note of the account

5 The auditor’s reports

6 Cash flow statement

7 Value added statement

8 The director’s report

9 Five years financial summary

10 Group income statement and balance sheet in case holding company.

11 Audit committee reports.

The statement of accounting policies should comply with the statement of accounting polices (SAP) and provision will contain the method of vahing stock (i.e whether FIFO, LIFO, averagerate, market value or replacement value)

Method of charging depreciation (i.e whether straight line, Diminishing balancing or revaluation method) the percentage of ratio used for depreciation/. The balance sheet wil show the assets. Liabilities and owner interest. It must also show the true and fair view of its state of affairs. The profit and loss account or in the case of a company not traching profit and income and expenditure account of a company for the years



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