ANALYSIS OF FINANCIAL STATEMENT AND DECISION MAKING OF MANUFACTURING COMPANIES IN RWANDA CASE STUDY: BRALIRWA PLC PERIOD: 2019-2023

Abstract

The purpose of the study is to analyse financial statement on decision making of manufacturing companies in Rwanda with a case study of Bralirwa Plc (2019-2023). The specific objectives of the study are to examine the effectiveness of financial statements in Bralirwa Plc and to describe the contribution of financial statements on decision making of Bralirwa Plc. The data collection techiques are interview and documentation while the methods of data analyzing are historical, Analytical and Statistical methods. The results of the findings shows that from 2019-2023 shows some significant trend on the side of the assets for example Property, plant and equipment increased to 102% from 2020 compared to the basic year and become 99% in 2021 and increased to 119 in 2022 compared to the basic year and total assets were 105% in 2020, 96% in 2021, 128% in 2022 compared to the basic year and this also shows the growth on the part of Assets. In the year ended 31st December 2019 the trend statement of financial position reveals the growth of the BRALIRWA PLC in general because of some change occurred on the part of loans and borrowings ST compared to base year increased at 67% in 2020, 48% in 2021 and 104 in 2022. Despite the increase in cost of sales, the company‟s gross profit has shown a positive trend, growing from Rwf 34,877,062 in 2019 to Rwf 84,020,000 in 2023. This indicates that the company has been able to maintain healthy margins and effectively manage its production costs. Total expenses have also increased over the years but at a slower pace compared to revenue growth. This indicates that the company has been able to control its operating expenses efficiently. The contribution of Financial statements analysis to the net profit margin, the use of EOQ has been contribute significantly to the decision making of Bralirwa Plc, EOQ help to minimize cost of goods sold and others relevant costs associated with inventory parts, EOQ help to control cost. Debt reduction remains a priority at Bralirwa. Due to repayment, the USD denominated long-term IFC loan is now Rwf 14.6 billion, this follows the repayment of the BPR loan in 2018. As a result our net debt position decreased to Rwf 41.3 billion (2018: Rwf 47.7 billion), despite the reclassification of the Bramin long-term loan to investments. Net finance cost decreased to Rwf 7.8 billion (2018: Rwf 8.1 billion). Bralirwa PLC should look for the means of disclosing company‟s Financial statements to the professional accountants in order to get advices and suggestions from these experts to get the fully disclosed Financial statements on which financial analysis could be conducted in decision making.