Abstract:
This study investigates the contribution of financial statement analysis to decision-making within
commercial banks in Rwanda, with a focus on Bank of Kigali PLC. The research aims to analyze
the effectiveness of financial statement analysis and its impact on the bank’s decision-making
processes. Utilizing horizontal, vertical, and ratio analyses, the study evaluates the financial
performance of Bank of Kigali PLC from 2021 to 2023. Key findings reveal a significant increase
in net profit, from 51,894,970 Rwf in 2021 to 74,817,679 Rwf in 2023, demonstrating robust
financial growth. The net profit margin improved from 28.80% to 33.35%, the return on equity
(ROE) increased from 18.16% to 20.42%, and the return on assets (ROA) rose from 3.26% to
3.53% over the same period, indicating enhanced profitability and efficient asset utilization.
Additionally, the debt-to-equity ratio remained stable, fluctuating between 4.57 and 4.79, and the
current ratio improved from 1.23 to 1.26, reflecting effective management of liabilities and
liquidity. These positive trends underscore the importance of financial statement analysis in
informing strategic decisions, managing costs, and leveraging assets efficiently. The study
recommends enhancing financial reporting, focusing on cost management, leveraging technology,
strengthening risk management, diversifying revenue streams, investing in employee training, and
enhancing customer-centric strategies. By implementing these recommendations, Bank of Kigali
PLC can sustain its financial performance and maintain a competitive edge in the market. The
study supports the hypothesis that effective financial statement analysis significantly contributes
to informed decision-making and improved financial performance in commercial ban
