Ratio Analysis As A Tool For In Vestment Decision Making In The Banking Industry (A Study Of Some Selected Banks)

ABSTRACT

The study investigated on the ratio analysis as a tool for investment decision making in the banking industry. The objective of the study are to determine the extent to which ratio analysis can contribute to capital investment decisions, the application of ratio analysis to determine the strengths and weakness of the companies and to ascertain the importance of ratio analysis in capital budgeting. To achieve the objectives of the study, ex post facto research design was adopted. The researcher adopted secondary data in getting the required information. In testing the hypothesis ordinary Least Square regression Analysis was used. The findings revealed that there is relationship between investment decision making and ratio analysis using (ROA). The findings also revealed that ratio analysis through return on equity can be relied upon for investment decision making. The researcher recommends that financial ratios analysis should lie properly appraised in banks in order for the management to identify the strength and weakness inherent in the system as they serves as performance indicator.