Accounting Information and Share Prices in the Food and Beverage, and Conglomerate sub-sectors of the Nigerian Stock Exchange (original) (raw)
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VALUE RELEVANCE OF ACCOUNTING INFORMATION IN THE NIGERIAN LISTED CONGLOMERATE FIRMS
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Association between Accounting Numbers and Value of Food and Beverages Firms in Nigeria
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The degree of statistical relationship between the contents of financial statements and market price of equity is what is termed Value relevance of accounting information. It explains stock market measures using financial information variables and it is a very useful guide to investors in pricing of shares. This study examines the extent of association between accounting information variables of earnings, dividend and book value of equity and market value of listed Food and Beverages firms in Nigeria. Data were collected from the published annual reports of the sampled firms and their market values obtained from the official daily list of the Nigerian Stock Exchange (NSE) over a period of 10 years (2001-2010). Using multivariate regression as technique for data analysis, the study established that accounting information of Food & Beverages companies in Nigeria is value relevant. Accordingly, the study recommends the use of financial statements figures of Food and Beverages firms for investment decision.
Value Relevance of Accounting Information and Share Price in Financial Service Industry
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We investigate the value relevance of book value, earnings and dividends among financial and non-financial companies listed on the Ghana Stock Exchange from 2005 to 2014. For the sample of non-financial companies, book value and earnings are found to be value relevant. Dividends are only value relevant when earnings are split into dividends and retained earnings. For the sample of financial companies, only dividends and earnings are found to be value relevant. Book value is not value relevant. Largely, accounting information has greater value relevance for the sample of non-financial companies than the sample of financial companies. There is no difference in the explanatory power of the Ohlson (1995) model as compared to the two alternative models under investigation. Largely, IFRS adoptions have a significant effect on the value relevance of accounting information. The results have implications for both policy makers and investors.
Accounting Numbers and Stock Prices in the Nigerian Stock Market
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The information content of accounting numbers in ascertaining security prices/ returns has gained considerable attention in the finance and accounting literature recently. Consequently, value relevance (VR) research evolved to generate empirical evidence of statistical relationship between accounting numbers and corporate value. This study investigates the VR of accounting information of listed Deposit Money Banks (DMBs) in Nigeria. Accounting information data were collected from the published financial statements of the sampled DMBs and the market value data were gathered through official daily list of the Nigerian Stock Exchange (NSE) over a period of nine years (2004 – 2012). The study used descriptive statistics to bring out the salient features of both the dependent and the independent variables of the study. Multivariate regression was used as the technique for data analysis. The study established that accounting information of DMBs in Nigeria is value relevant with adjusted R...
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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.
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