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Introduction Investment in stocks is aimed at taking advantage of eliminating risks and making profits off opportunities in the stock market. It is essential to take into consideration financial accounting when making investment decisions. For this reason, Investors need to have a basic understanding of the critical financial statements of a business and how each project affects the statement. This helps improve communication and cooperation between the financial entities and the investors. This also helps in making better investment decisions. Stock investment is founded on risk elimination and increasing stock earnings in the face of ever-increasing money velocity. Stock investment is housed as a business on government-supported legal entities. Tax payment is one of the legal requirements that governments demand of businesses which is only made possible when money is earned and profits made. This implies that money-making and risk elimination is the primary goal of any business. The government requires businesses to provide financial insights for the protection of their legal status of businesses. In light of these, businesses adhere to generally accepted accounting principles to meet their tax payment obligations. Investors and the government use the three primary financial statements: the balance sheet, the cash flow statement, and the income statement made from the same accounting data, including the general ledger. Investors pay attention to and use these documents to make their investment decisions. This paper approaches an overview and explanation of investment risk management, portfolio investment, and the importance of financial knowledge and portfolio diversification in a bid to make a fortune in the stock trade. |
