Abstract:
This dissertation investigates the impact of financial statement analysis on decision-making
within commercial banks in Rwanda, focusing specifically on the Bank of Kigali over the period
2021-2023. Given the crucial role of financial health in the banking sector, the study seeks to
understand how financial analysis informs strategic decisions and operational effectiveness. The
primary aim of this study is to evaluate the effectiveness of financial statement analysis in
enhancing decision-making processes at the Bank of Kigali. Specific objectives include assessing
the effectiveness of financial statement analysis at the Bank of Kigali, determining the
relationship between financial statement analysis and decision-making, and identifying key
financial indicators that influence decision-making processes. The research employs a
quantitative methodology, utilizing secondary data sources such as financial statements,
regulatory filings, and industry reports. The study population includes all commercial banks in
Rwanda, with a particular focus on the Bank of Kigali. Analytical and descriptive research
designs were adopted, with data analyzed using Microsoft Excel to identify patterns and
relationships. Key findings showed significant growth in key performance indicators such as net
income, return on equity (ROE), and return on assets (ROA) at the Bank of Kigali, indicating
that financial statement analysis is crucial for effective decision-making. The correlation matrix
revealed strong positive relationships among financial indicators, with net income showing high
correlation with ROE (0.91) and return on assets (0.99), indicating that improvements in
financial performance are closely linked with effective financial analysis. Regression analysis
further confirmed that financial statement analysis significantly impacts decision-making, with
key indicators such as the number of customers, number of assets, and net income growth
strongly influenced by financial performance metrics. In conclusion, the study demonstrates that
financial statement analysis plays a pivotal role in the decision-making processes at the Bank of
Kigali,
leading
to
enhanced
financial
performance
and
strategic
growth.
