EMPIRICAL INSIGHT ON FINANCIAL STATEMENT ANALYSIS AND INVESTMENT DECISIONS MAKING OF LISTED CONSUMER GOODS COMPANIES IN NIGERIA

Abstract

This study examined the relationship between financial statement analysis and investment decision making among listed consumer goods companies in Nigeria. Panel data from twenty-two firms quoted on the Nigerian Exchange Group covering the period 2005 to 2023 were analyzed using descriptive statistics, correlation analysis, panel unit root tests, and the Estimated Generalized Least Squares (EGLS) regression technique, with diagnostic tests conducted in EViews 13. Investment decision served as the dependent variable, while profitability (ROA), liquidity (LIQ), and leverage (LEV) were employed as explanatory variables. The empirical results indicate that profitability exerts a positive and significant influence on investment decision making, whereas liquidity and leverage show negative but significant relationships. These findings imply that enhanced profitability strengthens investment decisions, while excessive liquidity and leverage may constrain them. The study contributes to corporate finance literature by providing robust empirical evidence from Nigeria’s consumer goods sector and offers practical insights for managers, investors, and policymakers seeking to optimize capital allocation and improve investment efficiency.