ABSTRACT

 This study titled "Impact of Inflation on financial statement of manufacturing firm (A study of Guinness Plc) is aimed at achieving the following objectives; calculating inflation adjusted values of the components of Guinness Plc balance sheet, Access whether there is significant difference between historical cost and inflation adjusted values of Guinness Pie balance sheet components, calculate the impact of inflation on valuation of assets in the balance sheet, findings out if financial statements prepared using historical cost accounting convention reflect true state of affairs of the business, Determine whether profits declared during inflationary period aic accurate, Access the effect of inflation on capital invested in manufacturing firms. In other to successfully accomplish these objectives, the following research questions were drawn; Does inflation affect capital invested in manufacturing firms? Does financial statements prepared using historical cost accounting convention reflect true state of affairs of the business? Do profits declared during inflationary period accurate? Does inflationary trend have effect on the preparation and presentation of financial statements? The population of this study consists of forty staff of Guinness Plc which is the study area. data were collected mainly from primary sources. The method of data analysis is t-test, descriptive i.e. use of mean, frequency count, standard deviation. The findings include; reveals that inflation does not affect capital invested in manufacturing finns, frequency count rating on how financial statement prepared using historical cost accounting convention reflect true state of affairs of the business, frequency count rating of profit been declared during inflationary periods accurate, and inflationary trend effect on the preparation and presentation of financial statement.