Abstract:
This study titled the Effect of financial statement analysis on investment decision making in commercial banks. A case of I&M Bank. I&M Bank is a commercial bank in the republic of Rwanda., to provide commercial banking services to individuals, small bmeinesses and large corporations, The general objective is to know the effect of financial statements analysis on investment decision making at commercial banks in Rwanda. The specific objective was To analyze the financial statement analysis as new investors in commercial banks at I&M Bank. and to determine the effectiveness of in investment decision of the mee financial statement and its benefits for commercial banks I&M Bank. , most commercial banks in Rwanda mee financial statements to determine their financial position and earning capacity. However, they often do not apply the insights gained from these statements when making investment decisions. This disconnect indicates that while financial statements are utilized for assessing performance and stability The research study was of paramount to the researcher, I&M Bank, other researcher and Kigali Independent University. The research design was descriptive. Both qualitative and quantitative methods were need. Secondary data were also meed. In this research, to collect the information, documentary analysis has been meed; the data was analyzed through descriptive. Current ratio of I &M BANK LIMITED meets the requirement compared to standard of central bank which ensures that firm is able to cover its short term obligations. Aratioequaltoornear2:1isconsideredasastandardornormalorsatisfactory. However, the rule of 2:1 should not be blindly meed while-making interpretation of this ratio. Firms having less than 2 : 1 ratio may be having a better liquidity than even firms having more than 2 : 1 ratio. This is becamee of the reason that current ratio measures the quantity of the current assets and not the quality of the current assets. If a firm's current assets include debtors which are not recoverable or stocks which are slow-moving or obsolete, the current ratio may be high but it does not represent a good liquidity position, 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 0.912 which are in high correlation it mean that there are relationship between financial statement analysis and investment decision making It also recommended that I&M Bank 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.
