Effect Of The Financial Statements Contents On Investment Decision Making Of Oil And Gas Companies In Nigeria

ABSTRACT

This work titled effects of the contents of financial statements on investment decision making of oil and gas companies in Nigeria examines the contents of financial statements that affects the investors decision making in Oil and Gas companies in Nigeria. Data used were obtained from the (listed oil and gas companies in Nigeria Stock Exchange) published annual financial reports from the year 2010 - 2014. The financial ratios computed from the annual reports were analyzed using panel regression model. The analyses were done with eview 7.0 statistical software. The independent variables used are leverage ratio, liquidity ratio, market value ratio and turnover ratio.  The dependent variables Return on Assets (ROA), Return on Equity(ROE), and Return on Revenue (ROR) were proxied by investment decision making. The analyses shows that ROE and ROR have statistical significant effect on investment decision making, and ROA were not significant. The study recommends adequate care and due diligence should be maintained in preparation of the financial statements to avoid faulty investment decision which could lead to loss of funds and possible litigation. Also the financial statements should be used as bedrock for investment decision making.