Investors in the nation’s Capital Market have been urged to seek financial advice when making decisions if they are to maximize returns in their investments.
The Chief Financial Officer, FBNH, Oyewale Ariyibi was speaking at the June Edition of the Capital Market Correspondents Association of Nigeria (CAMCAN) knowledge sharing session.
Ariyibi said financial advisers would guide investors on fundamental stocks to invest in as they would take informed decisions to maximise returns on investment rather than gamble.
“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 have need for immediate use, invest for medium and long-term, also invest in stocks that have good fundamentals for capital gains,” Ariyibi said.
Speaking on the theme: “Understanding Financial Statement for Business Reporting,” he raised awareness on the value derived from financial statement of a company.
Ariyibi said: “A financial statement represents a formal record of the financial activities of an entity; it reflects the financial effects of business transactions and events on an entity.
“It is prepared by following certain logical and consistent accounting principles; and it is usually audited to ensure accuracy for tax, financing, or investing purposes.”
Explaining relevance of financial statement to user, he said “For 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 it helps in ensuring that the business operate in accordance with laid down rules and regulations aimed at protecting the interests of the stakeholders.
He added that regulatory authorities/agencies rely on company financial statement, while bankers and creditors assess the financial capacity/capability of the company, its creditworthiness and going concern with the financial statement.
On the adoption of the IFRS, Ariyibi said it has brought some level of transparency.
“It has improved transparency and I feel is a good thing to financial world,” he said.
