How much is the Business Worth?

Consciously or unconsciously we all make business and investment decisions based on the accounting information available to us, or atleast based on our understanding of that information.

Business managers; owners of businesses or company management use accounting information to judge the business performance and make more effective strategies.

Consulting firms use the information to work out solutions for businesses. Investment banks will assess the value of the business or company based on accounting information presented to them. Fund managers & Securities firms will make evaluations based on accounting information as well.

• Read also: CAP Plc Reports 9% Drop in Profit – Posts N456.27 Million PAT in Q1 2020
• N30.10 Billion Profit in Q1 2020 – UBA

If we, all people from all business sectors use financial information to make decisions, how much then do we understand this information when presented to us in the form of financial statements?

Big or small businesses/companies, local/national or multinationals, the basis of financial statements are the same. You don’t need any accounting background or managerial experiences to understand this information and make good decisions.

In this series, that will be published every Saturday night, Investogist will lead you, the reader through the process of understanding financial statements and what is behind them.

Whether you a business owner or someone looking to invest in a business in the form of equity or debt, not understanding financial statements could seriously damage your prospects of success.

Stay tuned on Saturdays as we take you through this series of teachings, which is an MBA course in several universities, on Financial Analysis and Decision Making.

Written by:

Basil Maduakor

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