By Omodele Adigun
To get good returns on their investments, investors have been tasked to cultivate the habit of analyzing companies’ financial reports before and after investing in any stock.
According to the Chief Finanicial Officer (CFO) of First Bank of Nigeria Holding(FBNH), Mr Oyewale Ariyibi, the roadmap to good returns on investment (RoI) lies in the financial reports that reflect viability and profitability of any entity.
Giving this advice Thursday at the knowledge-sharing Webinar of the Capital Market Correspondents Association of Nigeria (CAMCAN), Ariyibi counseled both savvy and potential investors, particularly at the capital market, to always seek financial advice to enable them take informed decisions to maximise returns. He opined that financial advisers would guide investors on fundamental stocks in which to invest and get maximimum returns on their investments.
He stated: “As an investor, investing in financial market is not gamble or betting, you need financial adviser for investment decision. You should invest money you don’t need now, invest for medium and long-term, also invest in stocks that have good fundamentals for capital gains.”
On the theme of the Webinay:“Understanding Financial Statement for Business Reporting”, he enumerated values inherent in company financial statement, which include: reliable source of information about company`s operations and business performance; cash position of the company over a specific period of time and overview of revenue, expenses and profit or loss for a period of time.
He added: “Financial statement is prepared by following certain logical and consistent accounting principles; and it is usually audited to ensure accuracy for tax, financing, or investing purposes. For the management, it is used for planning, controlling and decision-making process, to evaluate the organisational performance and position, so that the necessary measures are taken for improvement.
“For shareholders and investors, financial statement can be used to analyse the viability and profitability of their investments and to assess the ability of the business/organisation to pay dividends and determine any future course of action.
“While employees and trade union can used it to evaluate the financial health of the business with a view to determining their job security, the possibility of future remuneration, retirement benefits and employment opportunities.”
Ariyibi said financial statements also helps in ensuring that the business operate in accordance with laid down rules and regulations aimed at protecting the interests of the stakeholders, adding that regulatory authorities/agencies rely on company financial statement, while bankers and creditors assess the financial capacity/capability of the company.