Accounting Numbers and Stock Prices in the Nigerian Stock Market (original) (raw)
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This paper has investigated the relationship between earnings and changes in earnings to stock returns in the Nigerian stock market from 2007 to 2011. An ex-post facto research design was adopted, and the population of the study was made up of all the 198 companies listed on the Nigerian Stock Exchange as at 2011, using Purposive sampling 40 companies were selected. The data was collected from financial statements of the companies and from the NSE. Regression analysis was used as a tool of analysis, while other tests namely Correlation Analysis, Durbin-Watson Statistics (DW) and Variance Inflationary Factor (VIF) were conducted to validate the result of the study. The results indicated that there is a significant relationship between accounting information and stock prices in the NSE. The conclusion drawn is that there is a significant relationship between earnings and stock returns in the Nigerian stock market, hence earnings are related to both price and return in the Nigerian stock market, while change in earnings is not significantly related to stock return. It is recommended that since stock returns are related to earnings, companies listed on the Nigerian stock market should work towards increasing their earnings at the end of every financial year and current and potential investors should critically examine the earnings figure of companies while making investment decisions in Nigeria. Keywords: Accounting information, Stock returns, Stock Prices, Earnings, Bookvalues, Nigerian Stock market
Value relevance of financial statements and share price: a study of listed banks in Nigeria
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International Journal of Innovative Finance and Economics Research, 2025
This study investigated the relationship between the value relevance of accounting information and investment decisions in the context of the Nigeria Capital Market. The value relevance of accounting information is crucial for investors as it provides vital data about a company’s financial status, aiding in strategic decision-making. However, the quality and relevance of this information can significantly impact its usefulness. This research aimed to assess the value relevance of accounting information and its influence on investment decisions, providing evidence from the Nigerian Capital Market. The study adopted a cross-sectional survey design. The population for this study consisted of all quoted commercial banks in Nigeria. Available data from the Port Harcourt branch of the Nigerian Stock Exchange (NSE) revealed that there are 15 listed commercial banks in Nigeria. This study utilized primary and secondary sources of data. The findings of this study could offer valuable insights for investors, financial analysts, and other users of financial statements. It was concluded that there is no significant relationship between the reliability of accounting information and dividend per share. Comparability of accounting information does not significantly affect earnings per share while timeliness of accounting information does not significantly affect net assets value per share. The study recommended amongst others that all quoted companies on the Nigerian Stock Exchange must as a matter of urgency comply with the preparation of Simplified Investor’s Summary Accounts (SISA) with emphasis on accounting information on earnings, book value, dividends and cash flows aside from the mandatory detailed financial statements. This will remove information overload, particularly for nonaccountants and non-financial analysts.
Impact of Accounting Information on Market Value of Equity in Nigeria
Ambrose Alli University (AAU) Journal of Management Sciences, 2016
This paper examines the impacts of accounting information on the market value of shares in Nigeria. The study relied on pooled panel data extracted from Nigeria Stock Exchange and annual report and account of 59 listed companies in the Nigeria Stock Exchange over the period 2008-2014. The study found that; fixed-effect model is more appropriate over random-effect model in Hausman's test for appropriate model, Pesaran test of cross sectional dependence show no serial correlation in the residual across entities. Assets' tangibility, EPS, P/E ratio and firm size were positive and statistically significant to explain market value of equity. The study recommends large tangible assets for attracting investors while management should maintain activities that will lead to higher earnings and at the same time result to growth of the firm.
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The study assessed the value-relevance of accounting information on share prices of listed banks in Nigeria with a view to determining whether accounting information has the ability to influence the prices and demand for shares of banks listed on the Nigeria Stock Exchange. A sample of 12 listed banks on the Nigeria Stock Exchange was used for the study. This study used data mainly from secondary sources; this is because the estimation of the models adopted in the study require the use of financial statements, The analysis of data was done using descriptive and inferential statistics. The descriptive statistics include mean, standard deviation, kurtosis, Skewness while inferential statistics that was used in testing the hypotheses include panel regression and correlation. The result of the Hausman specification test showed Prob > chi 2 = 0.5304 indicating random effects as p value > 0.05. Therefore, random effect model is the most fitted models for predicting Market Value per ...
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The main objective of the study is to examine whether accounting information is value relevant in both the food and beverage, and the conglomerate subseEtors of the Nigerian Stock Exchange (NSE). The study also compared the value relevance of accounting information for both sectors. A random sample of seven companies was selected from a total population of thirteen companies listed in the Food and Beverage subsector of the NSE. The study also took a random sample of another seven companies in the conglomerate subsector. Data were gathered from these companies for the period 2005 to 2014. Using the Ohlson (1995) model and the multiple regression method, we found that market price per share (MPS) is positively, but insignificantly related to book value per share (BVPS) and earnings per share (EPS) in the conglomerate sub sector. On the other hand, for food and beverage sub sector, MPS is positively and significantly related to BVPS and EPS. Accounting information is more value relevan...
VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN LISTED CONGLOMERATE FIRMS
Nigeria and other foreign countries) produce mixed result regarding which of the variables most affect stock prices of different sectors of the economy. Therefore, this study examines the extent to which share price of the Nigerian listed conglomerate firms are associated with fundamental accounting variables (that is, Book value per share, earnings per share, and change in earnings per share). The paper investigates the value relevance of accounting information in the Nigerian listed conglomerate firms using data obtained from the Nigerian Stock Exchange (N S E) fact book 2011, annual report of the firms for the period 2007-2011, and daily price list on the Cash Craft website. The study is based on the Ohlson model and multiple regression is employed as a tool of analysis. The population of the study consists of eight firms that are listed on the Nigerian stock exchange under conglomerate sector of the economy and census sampling is used to study all the firms. The result reveals that all the explanatory variables statistically and significantly influence the explained variable. This implies that accounting information published by listed conglomerate firms in Nigeria has high value relevance to the investors in making their investment decision on the firms. Specifically, earnings has more value relevance than book value. It is therefore recommended that the management of Nigerian conglomerate firms should maintain stability and consistency in their earnings, which will go a long way in increasing market value of the firms. The accounting standards setters should also enhance the quality of the financial reporting in order to increase the value relevance of financial statements.
Accounting, 2018
The objective of this paper is to determine the effect of International Financial Reporting Standards (IFRS) as a new accounting reporting among Nigerian listed firms. This study uses book value, earnings and dividends to fill in the gap using a sample of 126 Nigerian listed firms in the stock market from 2009 to 2013 (pre and Post-IFRS adoption). Data was collected from Thompson Reuters, Bank scope DataStreams and annual reports. The study adopted Ohlson (1995) [Ohlson, J. (1995). Earnings, book-value, and dividends in equity valuation. Contemporary Accounting Research, 11(2), 661-687.] price model that has been frequently used in determining the quality of accounting information studies. The study finds that combined book value, earnings and dividends do not provide statistical significance effects on IFRS after adoption on the quality of accounting information. This could be possible, as dividends do not provide a significant effect in the presence of earnings. Furthermore, the audit big 4 quality provided an effect on the quality of accounting information because of IFRS adoption. Therefore, findings of this study provide additional literature on the decreasing quality of accounting information in an emerging market setting like Nigeria. The study implication is to the policy makers, regulators, and government that accounting information do not provide value relevance among Nigerian listed firms after IFRS adoption.
The objective of the study is to examine the nexus between accounting information and stock price of quoted consumer goods manufacturing firms in Nigeria. The study adopts an ex post facto research design; and, the sample drawn from quoted consumer goods manufacturing firms on the Nigerian Stock Exchange (NSE). The study employs a combination of descriptive and inferential statistical technique to analyse the data. The panel data from 2011 to 2019 was retrieved from annual financial reports and empirically analysed using the pooled OLS procedure. The results showed a non-significant negative effect of earnings per share and sales growth ratio on the stock price indicator; while, the operating cashflow ratio had a significant positive effect. The profitability ratio, i.e., return on assets had a non-significant positive effect on stock price indicator. Based on this, the study recommended that investors pay closer attention to information from the statement of cashflows as they tend to portray the true state of affairs in most companies. The futility of using only the profitability indicators as a yardstick for stock purchase decision. In addition, the use of supporting documents such as the corporate governance report to reveal otherwise information not obtained from the quantitative counterpart and vital for investment decisions.