CONTRIBUTION OF FINANCIAL STATEMENTS ANALYSIS ON INVESTMENT DECISION MAKING OF COMMERCIAL BANKS

Abstract

his study titled the contribution of financial statement analysis on investment decision making in commercial banks. a case of Bank of Kigali PLC. Bank of Kigali limited (BK PLC) is a commercial bank in the republic of Rwanda., to provide commercial banking services to individuals, small businesses and large corporations, the bank was 52% owned by bank beglories, before the government of Rwanda purchased that shareholding subsequently ,the government of Rwanda sold minority shareholding to other corporate entities. The general objective is to know the contribution of financial statements analysis on investment decision making at commercial banks in Rwanda. The specific objectives were to find out the effectiveness between financial statement analysis and investment decision making in commercial banks, to analyze the contribution of financial statement analysis applied in commercial banks on investment decision made at bank of Kigali. The research study was of paramount to the researcher, BK plc, other researcher and Kigali Independent University. The research design was descriptive. Both qualitative and quantitative methods were used. Secondary data were also used. In this research, to collect the information, documentary analysis has been used, the data was analyzed through descriptive. The data were presented using Tables and Figures. table researcher have found out that in 2020 up to 2021 had increase of credits distribution of 14.05% ,in 2021 up to 2022 credit distribution were decreased by 12.7% and from 2022 up to 2023, loans decreased up to 9.7%. Credits are main source of income institution like Bank of Kigali plc which receive deposits of customers and offers loans to its customers who are in need of fund to carry out their economic activity. information related to the relationship between financial statement analysis and investment decision making, with the data analysis after analysis the two variables of the studies the correlations were 0.912which are in high correlation it mean that there are relationship between financial statement analysis and investment decision making. the study recommended that financial statement analysis on time must have interdependent relationships that management needs to perform its activities. It also recommended that BK should use comparative analysis using comparison with others in the commercial bank. It also recommended that bk to give make new thing in this company as cash discount or trade discount in order to motivate the customers to pay on cash and to buy a high quantity of products.