Investment Decisions and Financial Statements Analysis Tools in Tanzania’s Commercial Banks

Abstract

The paper examined Financial Statement Analysis tools (FSTs) and its effect on potential investors’ investment decision in banking industry country wide. Specifically, it established the influence of horizontal analysis, ratio analysis and vertical analysis on investment decision. In this study descriptive research design was adopted and employed to draw subject matter conclusion. Data (Secondary) were collected from five listed {Dar es salaam Stock Exchange (DSE)} commercial banks in the country from 2012 to 2021.  Data analysis was computed via Statistical Package for the Social Science (SPSS) 25. Positive and significant relationship was found to exist in this study between ratio analysis, horizontal analysis, vertical analysis and the Investment decision.  Since financial statement analysis have a huge impact on investment decision the study recommends timely and adequately provision of financial statement by banks and a continuous training on financial statement analysis by investors in order to reduce risks associated with investment.

Keywords: Investment Decisions, Financial Statements Analysis Tools