HOW ACCOUTING RATIOS AFFECTING AN INVESTOR’S DECISION, SOME CASES OF CONSTRUCTION COMPANIES

Abstract

Accounting ratios are values of the relationships between 2 related accounts that appear in the financial statements such as: income statement, balance sheet, cash flows statement, and changes in equity. They present a company condition in the previous time, and predict by how the company will operate in the future. This research works to evaluate the values of accounting ratios to make investment decisions. By conducting of standard financial statements, calculating of accounting ratios and comparing these ratios in variety of companies are a burning issue and crucial mission to investors. As Vietnam is a developing and urbanizing country, it is a benefit condition for construction industry to grow. This project aims to discover definitions of accounting or financing ratios also the calculations of these accounting, and then it shows how of accounting ratios affect on investor’s decision making. The results of the study provide evidence to measure ratios and lastly it show out some recommendations and suggestions in applying accounting ratios in investment decisions to investors.