CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF THE STUDY
Business enterprises are in operation basically to provide goods and services which will satisfy the needs and desires of customers at a lower cost and in return will maximize their profit effectively on the services rendered by them. It is the responsibility of the management of a business enterprise to make sure that the activities being carried out by their enterprises are properly and documented. The recording of the business operation should be prepared in monetary term in a manner that the various interested party to the company’s financial statement will have the opportunities to determine whether the business is performing well in its functions or otherwise. The management is totally responsible for the” planning, organizing, coordinating as well as controlling and making corrective decision that seeks to the progress and advancement of the business organization. Decision making is a managerial function. It requires the assessment or analytical study of past, present operation future prospects and the probable outcome of decision which could be made. One important instrument which has helped business over the years in this area is the financial ratio analysis. Financial statement in order to gain insight into the financial position and performance of a business enterprise. It is the relationship between financial data in the financial statement to aid in the evaluation of the business strength and weaknesses. It also provide us with information that is useful for investment decisions such as “should we acquire ABC corporation or otherwise? It encompasses a variety of accounting ratios that reflect on a particular events, results or existing conditions. The financial statement is an accounting statement showing the profit and loss account of a business firm for a particular year, also the balance sheet, showing the financial position of the company. Various users include specific interest and needs. The users include the following bodies such as; the management, shareholders, creditors, government employees, customers, financial analysts and advisers as well as This research work therefore, intends to find out the impact of financial ratio analysis on investment decision in a multinational organization, using GUINNESS NIGERIA PIc located in Ikeja as a case study.