Abstract

Stock exchange investment in Tanzania is growing fast, and many people of different varieties of income are participating in the purchase of shares commonly known as stock exchange. However, there is seemingly little concern on the use of financial analysis on the part of local individual investors when purchasing the shares. Hence, this paper presents the findings of the study on financial analysis as a consideration for stock exchange investment decision making in Tanzania. The study was conducted for four months from July to October 2006. It adopted a survey study incorporating all six registered brokers in Tanzania located in Dar es Salaam. First, the introduction was given, which provided the essentials and the need for financial statements analysis as far as decisions regarding investment is concerned, after which the literature review was done. This was followed by a presentation of the role of Dares salaam stock exchange. Subsequently, the methodology of the study was given, followed by data analysis and discussion of findings. Finally, conclusions and recommendations were given. The paper concluded that most of investors in Tanzania do not depend on the financial statements analysis of the firms when investing mainly because most of these investors have not acquired knowledge on the importance of financial statements in making decisions regarding the investment. However, big investors such as   financial institutions and firms do consider financial statement analysis when investing. 

Key words: Financial analysis, stock exchange, investment decisions, Tanzania.