Abstract

<p>Investments are made by individuals with the aim of getting returns, hence individuals directly or indirectly (through stockbrokers) invest in companies that have good records of financial performance. As a result, the study attempts to find the influence of financial performance on investment decision from the perspectives of investors and stockbrokers. The study having anchored on the positivist paradigm applied the survey design using questionnaires for collection of data. Since the study population is infinite, the non-probability method known as the purposive sampling technique was adopted in selecting the sample size of the study. One hundred and seventy-two (172) respondents responded to the questionnaire which was then used for the study analysis. The Pearson correlation was selected and used for the analysis. The study results found ROI, ROE, ROA and NPM to have significant influence on investment decision after showing 0.004, 0.000, 0.000 and 0.002 respectively as significant values. The result further showed that ROI, ROE, ROA, and NPM are positively correlated with investment decision, though ROI and ROE have very strong correlation with investment decision, ROA and NPM have strong correlation with investment decision with the correlation values of 0.868, 0.822, 0.780 and 0.644 respectively. The recommendations made were that managers at all levels and policy makers of business entities should ensure high return on investment and keep improving on it yearly; high and consistent increase of ROE should be a priority to policy makers of business entities knowing that it will result to increase investment by investors; effective management of resources (assets) at the disposal of business enterprises should be done consciously; and ensure cost effectiveness when incurring expenses in order to keep a good record of NPM. The study came to the conclusion that financial performance has influence that is significant on investment decision and a correlation that is very strong and positive with investment decision.</p>